In the fast-evolving power utility markets, a new breed of players has emerged – the Digital Dragons. These highly digitised companies potentially pose a significant competitive threat to small and mid-size companies in the utility market. Among them, you’ll find technological behemoths, massive cloud services, potent ecosystems, and seamless payment and logistics services.
By leveraging the power of data and technology, digital dragons provide a superior customer experience with innovative, game-changing solutions that challenge legacy power services. As an example, a utility in the UK is now providing smart home solutions by leveraging Google’s Virtual Assistant, solving heating and hot water issues with ease.
Will digital dragons define the E&U digital future? Can traditional players effectively compete with the technological prowess of these industry giants? What innovative strategies can utilities employ to not only survive but also attract demand from end consumers amidst this E&U digital transformation?
Let’s dive in to find the answers and gain valuable insights into this digital disruption in utilities.
What are Digital Dragons?
The most comprehensive definition ever was provided by Gartner, saying, these are “companies that are embracing digital disruption and using it to enter, take over, and dominate markets they often didn’t even play in before.” This way, such giants as Amazon and Alphabet (Google) have already kept an eye out for opportunities in the retail energy market.
What kind of competitive threats might power utilities be facing?
Equipped with powerful IT infrastructure, cutting-edge data analytics tools, and advanced technology, digital dragons present pivotal challenges for Energy and Utility (E&U) organisations. Foremost among them lies the delivery of an entirely novel and vastly enhanced customer experience, which is hard to compete with. Other pressing obstacles also include:
- Innovative energy deals and plans.
- Customer-centric platform experiences.
- Beneficial pricing strategies.
- Cutting-edge energy solutions and energy storage, like home automation systems and advanced grid technologies for energy storage.
Power Utilities’ Digital Resilience: Two Pillars of Thriving in the Rise of Tech Giants
When suggesting strategies to cope with the rise of digital dragons in utilities, Gartner states, “There’s no safe place for the competitive enterprise. To deny, obfuscate, hide, or retreat may end in disaster.” Therefore, their emergence into power markets should not be ignored but rather factored in.
Rather than restating the six scenarios that contextualize utilities’ responses to digital dragons, our focus lies in exploring actionable steps to assist organisations promptly. For Utility CIOs, the key lies in transforming their company’s business model to effectively tackle the impact of E&U digital trends while strategically creating tangible value.
One of the ways to achieve this is by equipping a power utility business with robust adaptive capabilities and leveraging disruptive technologies and concepts to outperform competitors. Even if a utility company cannot transform into a full-fledged digital dragon, they have the opportunity to acquire potent ‘dragon-class capabilities’ that can significantly impact customer experience and the company’s overall bottom line. Among the most vital capabilities for business success are:
- Integrating Third-Party Offers to Forge New Energy Solutions, Products, and Services.
- Designing commercial offers that customise billing, financing, and payment terms to match each new product and service; creating diverse pricing schemes.
- Adopting bundled deals and combining multiple commercial offers and discounts into a unified package.
- Leveraging a business process management technology to eliminate complexity when interacting with multiple third parties and platforms. This empowers utilities to utilise preconfigured workflows or create custom ones to define processes for every engaged party.
In the Face of Digital Disruption: Opportunities for Energy and Utility Future
Utilities have two paths to explore: digitalising specific business areas and acquiring modernized capabilities, or fully embracing the digital transformation. To ensure power utilities’ resilience to emerging megatrends and new participants, the following common strategies can be implemented:
- Forging partnerships with tech giants. In the case of digital dragons, utilities have the opportunity to integrate their smart home solutions with utility services, tapping into the expertise and customer base of tech giants to offer advanced energy management solutions.
- Harnessing a diverse and agile talent pool as the catalyst for change. In the energy and utility realm, visionary leaders blend diverse perspectives, creating an unstoppable force that transcends individual contributions, propelling the industry towards unprecedented heights of success.
- Defining business-critical metrics for unveiling success. In the realm of business, defining key performance indicators (KPIs) that precisely gauge the impact of digital endeavors forms an integral component of a winning digital strategy.
- Participating in demand response programs. By partnering to implement demand response programs utilising smart home devices, energy suppliers can efficiently manage and optimise energy demand during peak periods.
- Elevating the customer experience. Working out a robust digital customer engagement strategy is crucial (e.g., Implementing a First-in-Class Customer Portal).
- Embracing technology through smart meters, home automation, and energy management systems. These digital solutions enable utilities to provide value-added services and empower customers to optimise their energy consumption.
- Distinguishing from digital dragons through green energy solutions, carbon neutrality, and environmental initiatives; attracting environmentally conscious customers who value sustainable practices.
- Delivering added value by harnessing smart home device data to offer personalized services. Utilities can provide customers with tailored energy usage recommendations, real-time energy consumption tracking, and automated energy-saving suggestions, all based on insightful smart home data.
- Raising more awareness about energy efficiency. Energy and utility companies can deliver comprehensive insights into their energy consumption patterns. These valuable insights enable customers to identify areas for energy efficiency improvements, resulting in cost savings and a reduced environmental impact.
Choosing the right partner to embark on the digital journey
MaxBill empowers utilities to stand out and gain digital resilience to emerging and future trends by helping implement new business lines, accelerate time-to-market, and enhance the customer experience. Our solution operates under a continuous delivery approach, ensuring utilities have the necessary functionalities to support emerging utility and digital services with confidence. Stand out in the face of any market shifts with MaxBill by your side.
Get in touch with our professionals to help you gain ‘dragon-class’ capabilities, or let us embark with you on a full digital transformation journey.