by Joerg Ferchow and Bernd Keller
Digitization is currently occurring in many sectors and is completely changing every aspect of core utility business from customer relationship and experience to the management of energy networks.
Driven by climate change or by government regulations, the energy sector has already started the transformation process towards decarbonized, decentralized energy production. Decarbonization in turn has also led to an increasing electrification of many sectors. Within the industry, this has led to the combination of many sectors, which has in turn led to the creation of new business models. These business models are increasingly focused on services associated with autonomous electricity, energy management and mobility.
Customer expectations have dramatically changed and this in turn has changed their consumption of products and services on the Internet. To better address the changing needs of the customer, utilities are challenged on how to best use the additional overflow of data to their advantage.
Digitization also affects virtually all devices. Existing non-digital electricity meters are being replaced by digital devices, and fridges or even toothbrushes now have an IP address. This connectivity has meant that both devices that are distributed decentrally, but current customers are also now connected directly to the producer or provider.
In terms of network infrastructure, not just meters are getting smart. The complete infrastructure is staffed with sensors that can deliver data to drive machine learning and artificial intelligence algorithms to detect issues before they even occur. However, at the same time taking the right operational decisions for example on infrastructure investments now also requires you to take advantage of any data available in both your operational and business systems.
Digitization, smart devices, and connectivity generate a massive amount of data. This data from various sources must be combined, so that you see an overview of current business transactions and can create tailormade offers for customers that are of direct benefit to them.
To make better decisions it is important to know your business. For this purpose, all necessary information must be made available from the most diverse sources. Correlations show the ‘health’ of a business area or a single process. Both current and new business models for energy providers can be divided into four broad transformation areas:
Assets, energy, customer and service business.
In each of these transformation areas, business owners require all necessary information available to understand the current health of their business.
The asset transformation area covers information and key figures for the current situation of assets and the associated costs for maintenance and renewal.
The energy sector is concerned with consumptions for each consumer type, the total value of the billed energy quantities or the numbers of profitable customers on the energy supply map.
The customer and service business area is concerned with the effectiveness of the marketing campaigns, locations of customers who refuse to pay and the conversion of standard to premium customers and other most frequently asked questions across all company channels.
The basis for displaying current business in these areas is the data that energy companies currently store in both SAP systems and other systems.
It is now necessary to combine this data effectively to identify valuable insights about the business in the current transformation areas.
Furthermore, activities can be derived from it, such as new opportunities or more individual offers for customers.
The data sources can be connected using live connections in the SAP Analytics Cloud (SAC).
In the Digital Boardroom, this is an app, which is based on the SAC, where these key figures and other key information can be displayed in a story.
The other new business models mentioned above require new key figures that provide information about whether business in these areas is actually booming.
We are happy to advise companies on which data should be used to calculate a customer lifetime value or to combine the current data available to create a more detailed customer profile.
This procedure enables both inconsistences and business success to be identified and displayed immediately.
Important key figures and data can also be displayed on maps to identify the regions in which business in a specific transformation area is running successfully and those areas where there are problems (business on a map).
The drilldown function can also be used to access an existing backend system to view additional information (root-cause analysis).
The intelligence available in the cloud software can be used to highlight inconsistencies. The individuals responsible for the respective business areas can use the forecasting function to decide on ad hoc measures to direct business in the right direction. The effects of this on costs and revenue are immediately visible. Promising measures can be added to future business planning as soon as they are decided on. Measures can then be implemented as of a date that is decided in advance, and the effectiveness of these measures can then be evaluated after a certain period.
The powerful nature of this type of software application is only visible if you access huge volumes of data from various transformation areas.
Some of our customers are already showing a huge interest in this application and are prepared to provide us with their data, naturally in an anonymous manner.
We are currently working on incorporating the knowledge we have obtained as part of this collaboration in a demo.
We are happy to share the results of this at any time.
It is obvious that the customer and service provider transformation areas are at very different stages of their transition to becoming an energy provider.
We are looking for other customers who are happy to collaborate with us on these exciting topics.