Utility companies at the ready: Time to embrace the age of change

Over the past decade digital technologies have transformed every industry they touch. We have seen sectors such as retail, transport and financial services all having to react and adjust to the new digital way of both living and working, and utilities must follow suit.

The utilities sector is one with a long-term perspective. In its initial conception, it was built and operated with future generations in mind. The benefit therefore of this is that customer-facing utilities companies, such as energy suppliers, are stable businesses. However, the downside is that they can sometimes find it hard to adapt quickly to changing circumstances.

This is a problem in today’s era of change, which is being caused by unprecedented factors. The first, the rise of digital technologies, which are up-ending every business sector – such as Uber in transport, Nest in energy, Airbnb in leisure, Amazon in retail and Facebook in media. The second is major shifts in regulatory regimes such as Ofwat’s AMP6, which are introducing new competition and transforming old ways of working.

Over the past couple of decades, utilities companies have tried to update their infrastructure, their processes and their business models to get abreast of this wave of change, often however without success. But as the impact of digital becomes ever-more profound, utilities companies have to get it right this time, otherwise they will be overtaken by new providers who by definition are more agile, more digitally savvy and are therefore able to better serve the digitally-led consumer.

Through digital services, and improved data accuracy, utility companies would benefit by increasing their interaction with their customers. This would increase their understanding of them, and enable them to improve services and as a result, boost customer loyalty. However, according to our report, only 48 per cent of customers feel satisfied with the level of digital services provided by utility companies.

This is somewhat low when compared with financial services and the retail sector. In fact, the utilities sector came third when looking into where consumers want to see an improvement in their digital offering, placing behind only local, and central government. What’s more, the research highlighted a need for digital from employees within the sector; 74 cent of utility employees want to see more investment in digital services that will enable them to work more efficiently and remotely.

This shows both internally and externally, a growing demand for utility companies to make more digital progress faster. This call to action comes not only from customers but from employees, who believe that digital will help drive future success of the business. Digital channels provide a way of driving engagement with the consumer and gaining insights into their habits. Ultimately, it will help improve the overall service.

Whether a company is a 50-year-old, long-term leader or a five-year-old digitally-native new entrant, utility companies will need to harness digital technology to keep up with demand and, ultimately, deliver the best service. Organisations need to embrace digital technologies and services in the right way, so as to help them become more operationally efficient, drive customer satisfaction and retention.