According to the Institute of Management and Development (IMD), 90% of top management teams now view digital transformation as a priority — up from 68% before the global pandemic. A 2021 Deloitte study shows that the share of global leaders planning to increase their financial commitments to digital transformation over the next 12 months is significant, with an average investment of $12.6 million.
Digital transformation strategy goes beyond digitalization. Digitalization is simply automating an organization's analog data into digital formats. Implementing solutions such as Oracle Utilities, IBM Maximo, and SAP would constitute digitalization. However, digital transformation requires a more sophisticated strategy. An organization begins the transition to digital transformation when it invests in sensor technologies, applications, and platforms that generate and utilize data to create new value.
In this article, I present how electric utilities (EU) can implement digital transformation by leveraging the IMD Digital Transformation Strategies framework created by Professor Misiek Piskorski of IMD. His framework offers a comprehensive end-to-end digital transformation approach, detailing how to apply three distinct strategies to create digital experiences, transform internal functions, and ultimately transform business models. Specifically, the framework calls for incorporating sensors that generate data to help the organization understand its consumers and customers; using this data to power applications that allow consumers or customers to run their businesses more effectively; and allowing the company to charge consumers or customers directly for the value created by these applications.
Now let us look at how these strategies apply to EU, and specifically to its Work and Asset Management (WAM) division.
Digital Experience Strategy
As noted, the framework focuses on enhancing digital experiences, transforming operational functions, and reimagining business models. Each strategy relies on the interplay between sensors, applications, and platforms to deliver value and operational efficiency.
The first approach is the Digital Experience Strategy. This strategy focuses on enhancing end-user interactions through sensor-generated data, intuitive applications, and collaborative platforms. This approach creates more engaging interactions than traditional digitization by leveraging real-time and predictive data. For example, key WAM sensors would include GPS and strain gauges. GPS sensors enable real-time tracking of field crews and mobile assets, aiding operational planning and historical performance analysis. Strain gauges can monitor stress and deformation in infrastructure such as power lines and towers, providing alerts to potential failures resulting from environmental conditions or material fatigue. Additionally, external sensor data sources, such as weather feeds from the National Weather Service, could complement internal sensors by contextualizing risks related to storms, ice, and temperature fluctuations.
Within this strategy, an application needs to be deployed to process sensor data into actionable insights. A Software-as-a-Service (SaaS) application, (for the purposes of this paper let’s call it the eWAM app), could be built to deliver these insights. Descriptive analytics within the app would provide alerts, such as weather warnings and infrastructure strain levels. Predictive analytics would estimate failure probabilities, while prescriptive tools would recommend interventions, such as replacing specific poles or proactively deploying field crews to vulnerable areas.
To complete this framework, a platform must be created. For the eWAM application, a one-sided platform would initially connect EU personnel, including grid operators, field crews, and contractors, to streamline communication and response. Over time, this platform could evolve into a two-sided platform by integrating external partners such as insurers and regulators, facilitating data exchange and collaborative action. This business-to-business (B2B) environment would improve responsiveness and enhance customer experience.
The strategic value of the Digital Experience Strategy will include real-time situational awareness for WAM operations, optimized crew deployment, and reduced service interruptions, leading to greater operational efficiency and increased customer satisfaction.
Digital Transformation of Functions Strategy
The next strategy of the IMD framework is the Digital Transformation of Functions. This strategy redefines internal processes such as supply chain management, research and development (R&D), and marketing through the use of sensor-driven insights and intelligent applications.
The eWAM app will provide predictive maintenance data that enables a shift from traditional "push" supply chains to "pull" supply chains. By forecasting equipment failures, utilities can procure needed parts just-in-time, significantly reducing inventory costs. Workforce visibility data will allow utilities to reassign nearby field workers to emergent outages, eliminating scheduling delays and improving response times. Additionally, data from the eWAM platform will enable data-driven R&D efforts, allowing utilities to develop grid-enhancing technologies and advanced conductors based on operational trends and performance insights.
In marketing, utilities can transition from mass marketing campaigns to highly personalized outreach, offering tailored services and incentives to large customers or specialized industries such as data centers, based on user-specific operational data. From a platform perspective, this strategy could involve deploying a hybrid model that supports internal communication while also connecting with external partners for supply chain coordination and customer engagement. It would allow seamless collaboration among procurement teams, developers, and marketers, leveraging a shared data environment across departments.
The strategic value of the Digital Transformation of Functions strategy lies in improving work order automation, enabling predictive maintenance, and refining marketing precision. EU will benefit from reduced operational downtime, optimized inventory management, enhanced R&D insights, and more cost-effective workforce deployment—factors that are especially important given the aging workforce across the energy industry.
Digital Transformation of Business Strategy
The third and final strategy of the IMD framework is the Digital Transformation of Business. This strategy envisions a fundamental reimagining of the organization's business model by transitioning from a traditional utility service provider to a technology and insights provider, thereby creating new revenue streams.
The same GPS and strain sensors used for internal optimization can be leveraged externally through a commercialized, AI-powered version of the eWAM platform. This platform would offer external users—such as contractors, municipalities, and insurance firms—real-time monitoring, failure prediction, and maintenance recommendations. AI models embedded within the platform would optimize crew routing, analyze structural health, and assist external service providers with infrastructure planning and resilience strategies.
The platform in this strategy becomes a fully two-sided B2B system. It would serve multiple stakeholders who subscribe for access to actionable infrastructure insights. This marketplace model transforms utility services into sellable digital products, extending the utility’s value proposition far beyond traditional power delivery.
It is important to note that creating a developer platform allowing third-party plug-ins is not advisable for EU due to stringent regulatory constraints within the industry. Therefore, EU’s approach would center on delivering packaged data services rather than opening the platform to external developers.
The economic value of this strategy will come from scaling up platform adoption, increasing revenue with each additional external user. By expanding the platform across different segments of the energy and infrastructure sectors, EU could deploy diverse revenue strategies such as subscription models and data licensing. In doing so, EU will become a data-centric enterprise, improve infrastructure reliability, reduce downtime, and support regulatory compliance. External partners, such as insurance companies, could benefit significantly from risk data, while municipalities could leverage platform insights for resilience and disaster planning.
Recommendations
A digital transformation strategy for an energy and utility organization should prioritize operational efficiency, enhanced customer engagement, and grid reliability. Given the industry's complex infrastructure, stringent regulatory requirements, and environmental sustainability goals, any strategy must carefully balance technology adoption with the broader mission of environmental stewardship.
The three digital transformation strategies—Digital Experience, Digital Transformation of Functions, and Digital Transformation of Business—offer a comprehensive and practical roadmap for EU. It is recommended that organizations implement these strategies sequentially, starting with enhancing the digital experience, followed by transforming internal operational functions, and culminating in transforming the overall business model.
However, a solid foundation of digitization must already be in place before embarking on digital transformation. Enterprise systems such as SAP, Oracle Utilities, and IBM Maximo should be fully operational, providing the necessary digital baseline upon which true transformation can be built.
Regardless of the specific path chosen, the three digital transformation strategies outlined here offer substantial benefits in efficiency, cost savings, resilience, and long-term value creation for Electric Utilities.