Powering Asia’s energy sector with data and analytics

Asia’s utilities should be prepared for the transformation that digital is having on consumer engagement.
Published: Fri 20 May 2016

Worldwide, utilities have to operate in a constantly changing environment and the consumer is at the centre of many of the emerging challenges and opportunities in the sector. Asia, specifically, is now one of the world’s most dynamic consumer markets.

Sean Lim, managing director of Accenture, who will be attending Asian Utility Week 2016, told Engerati in an exclusive interview that Asia’s utilities are now in a position where they should make decisions and investments to build the foundational capabilities required to address the new energy consumer. He explains: “While traditional utility companies will remain the major force in the future energy marketplace, they face new market competitors who have the potential to disrupt the industry as they begin to drain value. Utilities that move to a more consumer-centric model will be well positioned to face these new challengers and also have a foundation from which they can extend the utility business model in the future.”

Lim describes Accenture’s New Energy Consumer and cross-industry research which points to four consumer-related trends crucial to improving customer satisfaction while also containing costs and improving profitability:

  • Instant. Time-strapped consumers want on-demand experiences that simplify their lives.

  • Relevant. Consumers want personalized interactions and value-curated experiences. Some will even pay more for them.

  • Meaningful. For certain consumers, what they buy has become an expression of who they are—a way of highlighting their values and beliefs.

  • Sharing. In this era of open and collective business models, consumers welcome new approaches to sharing energy products and services—which deliver benefits without the burden of ownership.

Lim adds: “An important point here is that we believe digital is changing the nature of consumer engagement across the customer life cycle. Whether to educate consumers, sell new products, encourage self-service or create value with new services, digital must be considered as part of every initiative.

Asia’s digitally enabled energy ecosystem

Asia still has a significantly regulated energy market but utilities are now facing an inflection point where changes to business models are increasingly being driven by customer expectations as opposed to regulatory changes.

Lim says that, coupled with the expansion of renewable energy solutions and the internet of things, a digitally enabled energy ecosystem has been created which allows non-utility players to provide non-commodity energy-related services such as solar, home storage and EV.

He explains: “In this new environment, we are starting to see utilities at the beginning of their digital journeys with the intention to derive as much value from their existing investments as possible, while also looking for opportunities to leapfrog with new technologies.”

While there are a number of opportunities, Lim points out that there are a number of challenges that utilities face such as leveraging legacy architecture alongside new technologies, obtaining and retaining new digitally savvy talent, and balancing the need to expand into new business models while still performing their role as a commodity provider.

Smart analytic platforms improving operations

With the expansion of data sources from consumers, assets and third party data, coupled with the adoption of advanced metering infrastructure (AMI) and other asset sensors, utilities have ever- increasing amounts of data, to which they can apply analytics to gain business insights.

According to Accenture’s digitally-enabled grid research, most executives working in transmission and distribution view data management as a key organizational capability to develop by 2020.

But, according to Lim, for Asian companies the challenge lies in how to transform from an organization that uses analytics, including predictive analytics, on an ad-hoc basis into an organization that is powered by data and analytics.

To elevate and evolve their “mastery of data” and to become real analytical leaders, Lim lists Accenture’s five recommendations for utilities:

  • Clearly articulate business priorities and design for analytics outcomes

  • Complete an assessment of existing capabilities: from data and technology to talent, culture and performance management

  • Consider process redesign and data quality and governance improvements in light of leading utility practices powered by analytics

  • Develop an analytics roadmap rooted in executive priorities and value-based outcomes

  • Promote a cultural shift to an analytically astute, insight-driven utility.

Lim says that with the right smart analytic platform strategy, Asian utilities can look forward to improved customer-centric decision making and overall business effectiveness.

Lim advises Asia’s utilities: “Asia is a very diverse market. There is no ‘one size fits all’ solution. The key is to have a clear strategic intent as to what business model makes sense. Subsequently, it’s important to define a clear roadmap around that new model such as investing in strategic assets, grid trials/pilots and corporate ventures. At the same time ‘no regrets’ initiatives to remove customer dissatisfaction, improve operational performance and transparency, and digitize customer experiences can build a foundation for success, regardless of the future business model that a utility moves towards. All this must be done with a view to bringing in the necessary technology, partnerships and talent to achieve the long-term strategic goal.”