Digital Transformation: Fueling Solutions for Today's Energy and Utilities' Challenges

Energy and utilities companies are grappling with unprecedented challenges. With the cost of electricity surging by 28.5% in just five years, the average American now spends nearly $300 a month on utilities, leading to a rise in customer defaults and mounting bad debt. Global energy demand is only set to grow in the coming years amid tighter regulations, price caps and commitments to green transition.

At the same time, companies are expected to invest in smart grids and other technologies, and brace for the growing number of severe weather events. To navigate these complexities, the sector must enhance its digital capabilities to elevate customer service, boost profitability and meet sustainability goals.

COMMENTARY

Addressing Challenges to the Digital Transformation

Despite the promise of technology in addressing these challenges, many companies struggle to leverage their data effectively, owing to outdated legacy systems and fragmented data. This impairs the organization’s ability to make informed decisions in critical areas such as demand forecasting, maintenance planning, grid optimization and customer engagement. Many companies are resolving this issue by partnering with expert third parties for advanced analytics and automation capabilities.

Transforming Critical Functions with Analytics and AI

Advanced data analytics can enhance operational efficiency, reduce costs and streamline resource management. For instance, data models can be employed in the debt collection process to identify customers at risk of late payments or accumulating debt, enabling companies to take proactive measures. By integrating customer risk profiles with external data sources, such as credit agencies and financial institutions, we have seen recovery rates improve by as much as 40%.

Beyond revenue enhancement, digital solutions can significantly impact engineering, infrastructure and field operations. Artificial intelligence (AI) and machine learning (ML) enable predictive maintenance, foreseeing outages and equipment failures before they occur. This proactive approach enhances demand response, optimizes fleet management and bolsters storm preparedness, potentially yielding 20% to 30% operational savings.

Additionally, modern dashboards provide teams with comprehensive real-time insights into business performance. Coupled with robust data warehouses and intelligent reporting systems, they offer visibility into customer service metrics such as satisfaction levels, complaints, outage incidents and task completion rates. Dashboards can thus transform big data into actionable insights.

Customer Retention Through Digital Solutions

In today’s competitive landscape, customers have more options for utility suppliers and are more willing to switch providers. To retain customers, companies must gauge customer sentiment and observe their journeys on websites, phone and digital channels. Self-service portals empower customers to manage their accounts, pay bills and monitor energy usage, reducing operating costs and enhancing service efficiency.

Generative AI (Gen AI) enhances this process by seamlessly analyzing customer interactions across multiple channels, including calls, chatbots, e-mail and WhatsApp. This omnichannel analysis delivers real-time insights into customer preferences, pain points and behaviors, enabling businesses to make data-driven decisions. By leveraging Gen AI, companies can pinpoint areas for improvement and implement targeted strategies to enhance customer satisfaction, fostering loyalty and delight.

Customers can now “self-serve” around the clock through intelligent bots. When issues require escalation, agents are equipped with comprehensive customer information, allowing for faster resolutions. Technology also enables companies to personalize services based on customers usage patterns, preferred payment options, age and location, ensuring that services and communications are highly relevant to individual needs.

Enhancing Sustainability and Compliance

This sector faces mounting pressure to enhance sustainability and meet environmental targets. To surpass regulatory requirements while managing costs, organizations must embrace digital transformation. Streamlining compliance processes ensures companies adeptly navigate the evolving regulatory landscape and prepare for forthcoming directives and guidelines.

Harnessing advanced data analytics enhances the speed and accuracy of sustainability reporting, demonstrating compliance and transparency while mitigating risks of “greenwashing” allegations, fines and reputational harm. Additionally, data analytics facilitate scenario planning, enabling organizations to anticipate the impacts of market price fluctuations and regulatory changes. This proactive approach allows companies to take informed and timely action.

Ultimately, digital transformation equips energy and utility companies to confront current challenges while future-proofing operations to seize emerging opportunities. The time to act is now.

—Chris Lloyd is Business Unit Head, Energy & Utilities, for WNS, a business process management company.