Innovation in the Energy Industry and its Impact on Service
- Dec 20, 2017 4:00 am GMT
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As technology innovators like Amazon and Netflix consistently redefine customer experience, the expectation today is an unprecedented level of service across all industries, including the utilities space. New and emerging technology like virtual assistants have redefined “on-demand” service and all industries must adapt to compete.
Utilities are traditionally a highly regulated industry and often risk averse as a result. This can make the adoption of new technologies slow, even if the change supports a customer-centric approach. But for utilities companies to thrive under changing regulation conditions, they must incorporate innovative technologies that allow for faster responses to problems, including a preemptive strategy to avoid problems as much as possible.
Before the deregulation of energy began in the U.S. in 1980, consumers had no control over which utility powered their home or business. Laws dictated where companies could distribute energy and controlled the prices available in the market. Now, as more and more states move toward at least a partial deregulation of energy utilities, the industry is becoming more competitive, which leaves energy utilities more vulnerable to customer attrition. In 2016, a staggering 82 percent of customers stopped doing business with a company after a bad experience—up from 76 percent in 2014, according to Mary Meeker’s Internet Trends 2017 report.
States including California, Texas and New York have at least partially deregulated electricity markets and many other states aren’t far behind. Combine this change with disruptor companies taking immediacy to a whole new level and the question is—how can utilities keep pace? Innovation has proven to drive improvements in customer service, and energy utilities must be prepared to take advantage of technology and incorporate it into its overall business strategy to stay competitive.
Internet of Things
It is estimated that 20.8 billion connected “things” will be in use worldwide in 2020, providing various new opportunities for energy utilities. Signals sent to and from connected devices are growing in volume as more connected devices emerge. The use of big data, machine learning, artificial intelligence (AI) and cloud storage together deliver valuable insights from an abundance of data. Internet of Things (IoT) and machine-to-machine (M2M) communication enable a level of automating decisions, and taking action with little or no human intervention. The benefits for organizations are numerous. Remote monitoring applications can save billions in transport and workforce management costs for power companies. With the potential positive effects on customer experience and its associated business value, the need to keep up with innovation is clear.
Power plants, for example, can use IoT-enabled equipment to support a grid, sending performance details to big data facilities which can then flag problems to a control center. Combined with tech-fueled field service management tools, problems are less of a hindrance: when an issue is flagged, the most appropriate technician can be dispatched to handle it with the right tools and knowledge, providing a solution quickly and strategically in just one visit. Outages and other problems that cause major headaches for customers can be solved more swiftly with embedded sensors, which brings all equipment maintenance online and offers visibility into their health. Instead of a customer spotting a major problem, the sensor can provide real-time updates that predict when equipment may fail. This saves the customer time and pain and positions the utility’s brand in a positive manner
Artificial intelligence (AI) is defined as “simulation of human intelligence processes by machines, especially computer systems.” The term also includes technologies like robotics and processes like automation. Andy Peart of Artificial Solutions said, “By 2020 artificial intelligence (AI) will be as critical to business and customer service as the website was 20 years ago, or the mobile app was [five] years ago.” AI can process large amounts of data much faster than humans can. For energy utilities, this means that automated processes can handle the repetitive and time-consuming tasks, boosting efficiency, while employees focus on the work and customer service that requires a human element.
Energy companies must adopt artificial intelligence to enhance scheduling, adjusting dispatches of transporters automatically to changes in the environment, including weather and traffic conditions. Based on factors like customer demographics, customer history and task type, the technology can also predict the probability of appointment cancellation and automate reminders for higher risk appointments and prepare the technician for this possibility.
Innovation and the Human Element
No matter where the energy industry lands in terms of deregulation, it’s inherently a service provider. Despite significant opportunities for energy utilities to catch up with the standards for service that customers have come to expect, the real secret is in strategically combining the capabilities of the technologies with the skills of the technician. What enables the excellent service is not the technology itself, but rather the tasks that technology can accomplish to free up a human technician or engineer—or to boost human capabilities. Talk of automation, artificial intelligence and IoT can cause workers to fear being replaced by a machine, but the reality is that innovation works best as hybrid of technology and human work. Energy utilities that strategically combine their skilled workers with innovative technologies to produce exceptional service will enhance their brand image, their competitive edge and at least as significant—their bottom line.