I was recently asked by a retail utility executive how SAP can be used to establish a sustainable competitive advantage. Regardless of whether you are in a regulated monopoly or a competitive deregulated market, there are 4 things that every utility can work on today to improve the way they meet the needs of Utility consumers.
1. Be easy to do business with
What does it mean to be easy to do business with?
Let’s consider a money transfer. I sit on the couch at home, watching the TV over my laptop and if I need to pay a bill I will grab my phone to transfer funds using my banks’ app. Not because accessing the website via the PC on my lap is hard, but because the mobile app is ridiculously easy. The old days of phone banking, mailing checks or lining up at the branch to speak to a clerk have been eclipsed by today’s technology. It’s a better customer experience with a lower cost to serve. Not surprisingly many Utilities look to financial services as a guiding light to improve digital customer experience, and utilities need to.
SAP released The Australian Digital Experience Report drawing insights from exclusive primary research based on nearly 7,000 digital interactions from 3,000 consumers across six industries. This research found that Utilities fared the worst with the lowest digital experience score. This is a great competitive opportunity for energy retailers in a deregulated market with customer churn rates of 25%. The business case is typically built on both revenue upside and well as lower cost to serve. However digital experience is also important for regulated monopoly utilities because customer’s expectations are calibrated by their experiences beyond the Utility sector “We are being compared with anyone in the service industry, and we are under pressure to interact differently with our customers,” said Mark Doyle, MUD’s senior vice president and chief information officer. His motto is “If Amazon can do it, the district should be able to”. Most regulated monopoly utilities have customer satisfaction targets as well as pressures to reduced cost to serve.
Every Utility running SAP for billing and customer service should consider how SAP Multi-Channel Foundation for Utilities can support the rapid deployment of mobile and web self-service functions. While SAP provides an out-of-the box solution including native apps and responsive UI the real value of this solution is the services repository and framework that allows Utilities to rapidly build new customer apps or augment their existing apps. The digital customer experience is a journey not a destination and the SAP Multi-Channel Foundation allows you to make a fast start and continue to evolve to meet changing customer demands.
Taking the digital customer experience to the next level means going beyond self service to embrace 1:1 omnichannel customer engagement which is where SAP Hybris Commerce takes center stage. This is particularly of interest for Utilities embracing a full service provider model with a wide range of products and services across the value chain such as home energy (solar, battery, EV charging), home services (repair, plumbing, warranties) and smart meter installation, to develop new revenue streams. Hybris Commerce provides the end-to-end digital customer engagement platform to provide a personalised consumer-grade experience. This is not just for utilities’ consumers. Utilities are increasingly digitizing a wide range of interactions with property developers, plumbers, installers and other service providers.
2. Make every interaction intelligent
A personalised customer experience requires intelligence. Utilities typically have mountains of historical data on customer usage, billing, payments, credit actions, interactions etc. However Utilities can be pretty poor at harnessing this data to enrich the customer experience. There are some notable high achievers. AGL’s myAGL IQ based on SAP HANA uses meter data to enable customers to benchmark their consumption, view their current and projected consumption and set up bill shock alerts. CenterPoint Energy is using predictive analytics to provide more intelligent information via the IVR resulting in a 50% in customer self service. When a customer does need to speak with an agent SAP HANA automatically predicts the customer’s issue with a suggested resolution and has reduce call center Average Handle Time by 30 seconds.
All Utilities should be looking at SAP Hybris Marketing to provide the intelligence for digital customer experience. Don’t let the branding fool you, Hybris Marketing is a native SAP HANA solution that empowers marketers with advanced analytics on big data (e.g. demographic, transactional, spatial, consumption, social media, sentiment analysis etc). SAP Hybris Marketing provides an intelligent messaging hub with audience targeting and segmentation driving campaign execution and trigger based marketing via facebook, SMS, email, web landing pages, call centre, leads and dynamic digital commerce personalisation. There is a series of demos on the SAP Hybris Marketing Best Practices Youtube channel.
You can start today with a free trial.
3. Nail new product introduction
A key source of sustainable competitive advantage is the ability of Utilities to release new products and prices to market. An excellent example is the experience of British Gas. Once British Gas announced a price change it used to take them 3 months to implement the change in their legacy systems, allowing plenty of time for smaller more nimble competitors to undercut them. Since consolidating on SAP they reduced this to 3 weeks, reversing the trend and allowing them to dynamically respond and undercut competitors. This was a key contributor to British Gas achieving their lowest ever, industry leading customer churn rates.
Utilities that are interested in bringing down the time and effort to release new products to market must look at SAP Product Modelling for Utilities. This great video demonstrates the functionality. The solution allows you to search, compare, configure and sell products via the call center and publish offers directly online for customers to configure and buy themselves on their PC or mobile device. Utilities using SAP Product Modelling for Utilities have virtually eliminated new product introduction time to market from 6 weeks down to less than an hour. This is possible because the product modelling in CRM 7 provides a library of tested, integrated product components that business people can model into any number of different combinations to create new products.But it is not just about reduced time to market SAP Product Modelling allows you to bundle any product or service, so you can offer integrated packages such as an electricity plan, with solar panels, installation service, optional maintenance plan, optional warranty extension, optional lease arrangements etc. The pricing is dynamic so you can reward the customer with deeper discounts the bigger the bundle.
SAP even provides three comprehensive pre-configured example demos that you can activate in your system.
4. Develop a split personality
One of the major frustrations that Utilities face is the ability to deliver innovation in the context of monolithic systems. Many Utilities have adopted an “internal start-up” approach where they hive off new businesses and initiatives and grant them free rein to operate independently of their core billing, CRM and corporate systems. This freedom often leads to frustrations of different kind as these “start-ups” scale and seek to re-integrate with the business. So you now want call center agents to cross sell or handle customer inquiries as part of a single face to the customer for your new products and services (solar panels, storage, warranty services, EV charging, hot water, water tanks, broadband, loyalty programs…) but these are all managed in their own systems and it starts to resemble a dog’s breakfast. What can you do?
Right now all Utilities should be looking to effectively support innovation by developing a split personality between operations and innovation.
A key inhibitor for Utilities is that the same IT governance that works effectively to ensure robust, reliable and predictable operations often stifles innovation. A real world example from a customer years ago was that they needed to raise a business case to have a new marketing campaign created in SAP because this followed the governance process which was originally designed for managing changes to core corporate data like General Ledger accounts. Clearly a more appropriate governance model is required for innovation. SAP has been advocating for a while now that organisations develop a 2 speed approach to their internal SAP Customer Centre of Expertise with the creation of and Innovation Control Centre (ICC) to compliment their Operations Control Centre (OCC). SAP has a comprehensive approach to supporting an ICC for premium support customers. All Utilities should strongly consider developing this split personality for supporting operations with highly automated, proactive monitoring and maintenance and delivering agile innovation using core systems.
Game changing innovation can be delivered on core systems, as illustrated in the SAP Product Modelling for Utilities example above, however Utilities should not be limited by the scope of core systems. SAP has embraced post modern ERP and is expanding pre-integrated cloud based solutions to augment core systems in a non-disruptive way. SAP has delivered SAP cloud for customer utilities industry solutions for commercial and industrial customer sales as well as for call center and customer service.
Jemena have successfully augmented their core ERP solutions with SAP cloud for Customer due to ease of deployment, functionality, scalability and usability. This delivered a innovative solution rapidly to the business and reflected very positively on the Jemena IT team.
What should retail Utilities be looking at right now?
In a nutshell:
- Be easy to do business with. Enable self service functionality with SAP Multichannel foundation. Deliver a personalised omnichannel digital experience with Hybris Commerce.
- Make every Interaction Intelligent. Hybris Marketing drives multi-channel campaigns and personalised interactions based on big data segmentation.
- Nail new product introduction. SAP Product Modelling for Utilities brings new products to market fast and allows you to bundle complementary products and services.
- Develop a split personality. You can run your core systems to support both agile innovation and robust operations. Exploit cloud solutions to augment your core systems.