Customer Experience in Energy and Utilities
Customer relationship management (CRM), the process a customer goes through when considering a process or service, is something every company needs to implement. However,few companies define Customer experience (CX / CEM) as the sum of all experiences at various touch-points a customer has with the business over the duration of their relationship. (Including various stages like awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy). How can we change from traditional CRM (Customer Relationship Management) into a more robust experience for our customers?
The primary challenge is at the approach where-in organizations focus on how they see the customer whereas it should be focused on how the customer sees the business. This obviously gets compounded with the arrival of new engagement channels like social media, messaging platforms, IoT, etc. Let’s not forget to add challenges posed by the newest customer segment (i.e. Gen X, Millennials, etc.) expect & thrive on instant gratification, irrespective of content or product.
Given the fact in most of organizations CEM / CX/ CLM (Customer LifeCycle Management) / CRM is a CEO level initiative yet many enterprises are struggling to deliver meaningful, sustained, positive customer experiences. I would like to focus on the Energy and Utility providers and share my thoughts on how Energy & Utility (E&U) organizations could focus on this aspect. Let’s begin by looking at the immediate changes impacting the E&U industry
Change # 1 – As we all know policy changes are at a very different direction from last few decades of deregulation and privatization, they are primarily aimed at spurring competition and lowering energy prices in North America and Europe. Due to this deregulation as well as technological innovation many new suppliers can enter or have entered the utilities sector. For Example, Apple Inc. and Alphabet Inc., have invested in renewables to power their operations and sell the surplus energy
Change # 2 – Utilities have always relied heavily on coal to generate electricity and heat which have increased carbon emissions globally by 50% between 2000 and 2013. Given the push and awareness about renewable and clean energy Utilities are being forced to look at alternatives. Utilities in the U.S. generated 13% of their electricity from renewable sources in 2015, up from 9% in 2000 and for Utilities in Europe, renewable sources accounted for more than 28% electricity generation in 2015. This has also has resulted net new energy providers that are using Solar and Wind energy for generation. In the future, this local generation will give rise to fully functional microgrids where the participating consumers are self-sufficient and not connected to a bigger network (or connected on need basis). We should also not forget companies like Tesla with their Powerwall which give a new dimension to this discussion. Hence anyone can be a utility now.
Change # 3 – Rise of intelligent machines: Smart Grids and Smart Meters – In the early 90’s engineers would need to make phone call to understand how much power was being produced, if a power station failed, etc. Utilities are investing in varied grade of intelligent software and hardware that will allow communication between customers and utilities.
Change # 4 – Home automation and energy efficient appliances. With the availability of smart appliances that interact and learn from surroundings, homes have started consuming less energy while providing the ability to monitor and control usage and derive behavior. Part of this is also related to consumer behavior towards energy conservation and awareness.
Change # 5 – Last but not the least is the influence of Electronic Vehicles (EV) market. The number of EV’s hitting the road crossed 1M mark in 2015 and their sales are growing fast. An EV uses approximately 0.3 kWh of electricity per mile. Average EV mileage was approx. 8900 miles per year in 2015 and going to rise to approx. 18000 miles per year within the next decade. With states and local authorities approving proposals to invest in charging infrastructure to improve adoption, this can be one of the changes which would be slow and steady, an adverse impact on the infrastructure, and giving rise to a new kind of consumers.
This list could go endless and it definitely gets more complicated for Utilities when consumers are interacting with the Utilities with disparate needs but want to have the same experience irrespective of their needs.
At the core Utilities are being challenged in terms of ability to keep up with these changes (including the innovations required) and at the same time ensuring business as usual. Their core issues around Asset Maintenance & Aging Infrastructure, Regulatory compliance (Both existing and new), Grid Reliability, Workforce, Billing, Revenue & Loss Management, Cyber Security, etc still exist and are very specific to this industry.
Utilities have started looking at different approaches to solve this problem from a technology & business stand point.
- Utilities want to ensure the Core stays intact and delivers the day to day needs of the business and at the same time the Outer Layer (Innovation) is flexible enough to deliver new innovations at a rapid pace.
- Both in the near and long term the Innovation Layer and Core Layer need to communicate with each other but at the same time be loosely coupled to allow each of them to change, scale and work independent of each other.
- Utilities want to ensure that irrespective of the change they are able to maintain one version of the truth.
- Utilities have to ensure TECHNOLOGY and IT work as ONE team.
In short if Utilities need to start their Digital Transformation they need a platform that allows bridging the stable & legacy systems, bringing them into a modern world that drives innovation across experience, across connectivity, etc. This is very critical to ensure Digital Dinosaurs (which most of the utilities closely relate) transform to Digital Immigrants and avoid becoming instinct or run over by Digital Native.
There are many ways to approach digital transformation, however, it boils down to two options modernize or build something new. Most digital transformation is accomplished using a combination of these; modernizing processes while redesigning others to take advantage of new technologies and techniques.
Companies like SAP have seen this coming and have designed a new platform that will meet the needs of both customers & partners and help drive innovation.
SAP also understood that there was a need for a platform which is more than just an IaaS (Infrastructure as a Service) offering, with components that can be used in a plug and play fashion by developers and IT teams to create new applications and / or enhance existing one. Flexibility to use and deploy only the components required by the business / applications and at the same time can be used by existing teams without the need of a complete skill overhaul. Provide all the tools required from a Dev Ops perspective including debugging, monitoring, life cycle management etc. Ability to integrate with SAP and non-SAP applications, exchange data on-premise or cloud irrespective of the backend.
SAP Cloud Platform (SAP CP) is an open standards-based, in-memory cloud platform designed for today’s increasingly networked, mobile, social and data-driven world.
SAP CP is Platform-as-a-Service (PaaS) offering that allows you to focus on developing your software and use an enterprise-ready pre-installed environment in the SAP Cloud to deploy and run your applications in a secure and reliable way. These modern, feature-rich applications can be easily created with SAP CP using skills already available within an organization
SAP Cloud Platform leverages the powerful in-memory computing technology and analytics of the SAP HANA. Having a tightly integrated stack allows SAP CP’s different application services, such as integration, mobile, security, etc., to talk to each other in a unified manner. This allows developers to create a function or capability once and reuse it across the different services—resulting in significantly reduced design time.
SAP has also created new services like Business Services for YaaS. The core design principle behind YaaS is a microservice architecture, which enables you to build a flexible and scalable platform. A business service is simply a microservice that provides a specific business functionality, such as products, loyalty, or orders. In technical terms business service is a Web application with a RESTful API that exposes the resources and functions of the service. The service implementation follows the guidelines for microservices so that the service has a clearly defined scope, is highly scalable, resilient against failures, and self-contained. The approach is to develop a single application as a suite of small services, each running in its own process and communicating with lightweight mechanisms, often an HTTP resource API. These services are built around business capabilities and are independently deployable by fully automated deployment machinery.
So all these features & functionality will help partners and customers easily build beautiful, modern applications that are simple and intuitive to use.
Example : Using SAP CP Services, developers can access or “call” other companies’ software functions, capabilities and data as services which greatly simplifies the creation of an application built on SAP CP. It’s much quicker and easier to provide functionality or access to data within an application using API calls than it is to build your own connections or functions. An application built on SAP CP can also be consumed by others via API, potentially opening new revenue or increasing brand awareness for organizations.
SAP truly believes “It’s crucial for our broad ecosystem of customers and partners to drive transformation and innovation in the cloud”. SAP has established an extensive ecosystem of over 400 partners building apps for SAP Cloud Platform and features close to 1,000 ready-to-deploy apps available on the SAP HANA App Center.
From a Utilities perspective, faster time to market from requirements to prototype and then final rollout to end consumers with minimum changes to core applications but still integrating with them.
Partners like Smart Utility Systems (SUS) have worked with SAP closely in this journey and created SaaS solutions for Customer Engagement, Workforce Mobility, and Big Data Intelligence and Analytics for Utilities and Energy. Smart Customer Mobile (SCM) offering from SUS improves customer engagement for Utilities across web and mobile channels and also provide other capabilities like self-service, real time two way communication between utility and its consumers.
This empowers customers based upon their needs, preferences and behavioral trends, at the same time track usage and avoid any surprises in their bills and motivate them to save more by comparing their consumption across varied demographics. It also provides customers about current and future outages so that they can plan accordingly.
Utilities in turn get better call center inefficiencies including reduction in calls, increased adoption in e-billing, improved payment discipline through mobile and reminders, last but not least an end to end view of the customer.
SUS could develop these applications in couple of months in SAP Cloud Platform and subsequently deploy them to their Utility customers.
OEM and ISV Partners are really benefiting from this approach where-in they get access to an agile and dynamic application environment—using a consistent framework—to quickly innovate, differentiate, and run an organization’s digital core and agility layer in tandem, whilst being future proofed.
Marrying a partner’s specific capabilities, business insights and experience with SAP CP as an agile development platform gives both partners and customers more choice, rapid innovation and an application landscape that reflects their business needs today and in the future.