Beware the siloed approach to data

With inflation and falling real incomes upping the pressure on consumer finances, households have become more engaged with their domestic bill data than ever before. Although data can be used as a tool to help consumers, there are concerns that it is still seen by some as a commodity needing to be closely guarded. Writing for Utility Week Duncan McCombie, chair of National Grid Electricity Distribution’s customer engagement group and chief executive of YES Energy Solutions, stresses the importance of a whole system approach to data and the need to avoid silos.

As a nation we often latch onto the all-encompassing need to meet net zero as the singular transition we must undertake. However, there are subsets, such as the move away from internal combustion engines and the reliance on fossil fuels; a digital society, future smart cities. Such progressions require taking customers along on the journey.

These transitions cannot simply be addressed by focusing on physical infrastructure on a sector-by-sector basis. Whole system thinking (and more recently, activity) is moving to the forefront of accepted approaches to meet infrastructure and consumer need.

To inform actions, there is a need for good data governance at a whole system level. This will avoid bill-payers being committed to larger bills as sector specific approaches are ill-disposed to efficient and effective solutions.

Data and the information derived from it, is still seen by some across sectors as a commodity; needing to be closely guarded, potentially for fear of ‘missing out’ or maximising a future benefit. This must be robustly challenged internally and externally.

Conventionally, research provided data, which was analysed and interpreted to form conclusions, would lead to recommendations, decisions and ultimately action. This linear process has historically been done on a silo basis, leading to unrepresentative and often misaligned responses.

The background of increased dependence on essential services, inflation, falling ‘real’ incomes, further consequences of Covid and the far greater frequency of extreme weather events means issues of vulnerability, including transient vulnerability, are at the forefront of policy and regulatory thinking in the utility and infrastructure sectors. It also means a substantial number of householders are currently far more engaged with data about their domestic bills than ever before.

This can be seen in responses to customers in vulnerable situations. For example, with challenges to customers’ pockets with the cost-of-living crisis and drop in real wages over the last two years, financial arrears have increased by 30%. This impacts all the services purchased (or provided) to this customer: financial, water, energy, telecoms, etc. Yet the response is at a company level, based on the data they hold, not a more holistic or customer centric solution. For example, maybe helping a customer access funding to reduce their energy bills due to a poorly insulated home would allow them to keep up their water bill payments – not a frequent conversation without the customer being referred to a third party.

We seem to be letting customers down who need a bit more help because organisational silos have been a constant of the modern enterprise. Unsurprisingly, data silos followed suit.

Maybe now is the time the silos need to be seen as barriers to great customer service and not a commercial advantage, supporting the net zero journey for customers, companies and communities.

To improve responses, in a drive to directly improve customer satisfaction, data is required from multiple sources. Maybe the answer is to look outside to the ever-expanding data aggregators. With dozens of customer architypes now in their vast and growing databases, these ‘data insight and analysis’ companies may be able to provide a more vivid customer picture across sectors for companies to develop their responses. Job done!

But hold on, customers want trust and transparency! They know who provides their water and who they pay for their energy. They may not know that sometime in the past they agreed to some T&Cs without really reading them and allowed their information to be sold on as a service. How sectors use this data service could make customers more wary about other future engagement.

Smart energy meters were to provide real time information on energy use across the 26 million homes in GB. These are the same homes that will need to be assessed for retrofit energy efficiency measures before 2050. Can the energy consumption data be separated from the customer data to allow better targeting of activity on the most energy inefficient homes? To achieve this, the whole system approach will need to be working effectively and relevant data available outside of the current custodians.

The importance of big data doesn’t simply revolve around how much data you have. The value lies in how you use it. By taking data from multiple sources and analysing them, you can find answers that improve operational efficiencies, improving outcomes for customers and enable smart decision making, but you need to be doing things with the customer, not to them.

Since data silos can’t be eliminated altogether, one key to unlocking the value they hold is to establish a strong data architecture — a collection of rules, policies, and procedures that govern how data is stored, integrated and shared. This is where the regulators need to focus their efforts in delivering their duty to protect customer interests, while having transparency of their performance against this duty.

Is it therefore not true the more data we have the better, particularly if it is sector specific and not customer specific? Breaking data silos is essential to turn data into evidence in a complex whole system context.  This will allow the delivery of efficient and effective services to customers, reducing the impact on billpayers through better sharing of data in an appropriate way.

Customers need to trust their data is being used for their benefit, in ways they highly value.  If this happens, they will be eager to share more about themselves to receive even more value.