The utility industry's pursuit of digital business transformation
Paul J. Yarka
Vice President and Chief Digital Strategist
Convergent Group, 6399 South Fiddler's Green Circle, Suite 600
Greenwood Village, CO 80111
Introduction
Business transformation is on the radar screen of many utility industry
executives. Their expectations are high for the redesign of their businesses and
leveraging technology to support revitalized processes, thereby wringing cost
from operations and creating new revenue opportunities. Beyond cost-cutting,
industry executives are anticipating that utilities can leverage business
transformation to better address competitive and regulatory pressures and
prepare for customer, constituent, and business partner interactions with their
day-to-day business processes.
Digital Business Transformation
Digital business transformation is an ongoing process, which is enabled by
redefining business strategies, new technologies, and the growth of the Internet,
that can convert old economy utilities to digital enterprises. Digital business
transformation touches business architecture, business strategies, strategic
business processes, market drivers, customer interaction, management
principles, systems, systems integration, and organizational knowledge and
information management and flow.
Utilities interested in gaining maximum benefit from digital business
transformation can use the following approach as a high-level transformation
methodology. Overall, it is important to champion the digital business
transformation process from the top down. First, the methodology starts with
taking inventory of strategic and tactical processes; systems and technology;
people and their skills; and knowledge, information, and data owned by the
enterprise. In the inventorying step, it is crucial to consider strengths and
weaknesses of an organization's existing processes, how well or how poorly
technology and systems support or define current business processes, process
and technology optimization opportunities, and degree and quality of knowledge
and information integration and flow.
The inventorying process should lead to the definition of an integrated strategic
business and IT plan. It is crucial that the plan be developed on an
eBusiness-based business transformation platform. In this context, eBusiness is
an enabling strategic business platform and not yet another IT initiative.
Components of the strategic business agenda should also include company goals,
target markets, and ideas on how the Internet will potentially create clear
competitive advantage.
Utilities are increasingly learning that leveraging the Internet requires quick and
decisive actions. To take advantage of digital business transformation
opportunities, utilities should consider partnering, buying, and lastly building as
the order of their systems-related priorities. Preparing business processes and
systems for exposing business processes to others, as well as optimal process
and system integration, are extremely important. Critical time can be wasted by
taking a "wait and see" attitude and looking for "tried and true" approaches to
digital business transformation.
Once business and technology strategies are planned, utilities should focus first
on creative streamlining of major internal business processes, as they now will
become more widely and externally accessible. In the case of retail utility
business initiatives, customer-facing processes should be prioritized first, as their
optimization can bring greatest value to utilities and their customers. If an
organization needs to reduce a process now requiring weeks or months to one
operating at Internet speed, the organizational impacts of process redesign and
operational impacts of opening new customer interaction channels must be
understood well in advance.
The next step in a digital business transformation process is to leverage
integration platforms, such as Enterprise Application Integration (EAI) and
B2C/B2B integration platforms. EAI and B2C/B2B integration are currently viewed
as a significant key to adapting a business, its processes, systems, and their
integration quickly. A service-oriented architecture, such as that enabled by
modern integration platforms, is needed so that a business may adapt and
morph as quickly as an organization will need to in the digital economy.
Scalability, reliability, and security are also important considerations. In recently
merged companies, system consolidation and renewal can also provide
substantial reductions in process duration and complexity.
The next step in the digital business transformation process is for the utility to
better understand its customers. Detailed customer and customer process
understanding are required to provide better service and end-to-end fulfillment.
In addition, it is important to provide personalized customer interaction, which
can be provided through the use of personalization and content management
technologies. Depending on the utility's business model, a utility's customers may
provide services to one or several of the following: residential customers,
commercial and industrial customers, contractors, developers, constituents,
business partners, and even other utilities. As a digital business strategy and
enabling processes evolve, it is quite possible that the information about a
utility's customers may prove even more valuable than the commodity they are
selling.
Regardless of the types of customers a utility serves, externalizing
well-thought-out processes will breed increasing levels of interaction. Customer
interaction tools, such as eContact tools and blended media systems, will enable
utilities to provide more customer communication channels, more integrated
customer information, and better customer service. The better the processes and
the customer interaction capabilities, the more users the utility will draw. As
processes and systems improve, expectations will continue to grow making 24/7
access compulsory and downtime not a viable option. Staff must be ready to
interact with customers on their terms using their favorite channel (e.g.,
telephone, web-chat, and email). To support a successful transition to a digital
business enterprise and redesigned customer interaction, the implementation of
organizational change management programs is a must.
