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Utilities and The Customer Connection

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The Economist Intelligence Unit conducted in August 2013 a global survey of 50 executives in utilities industries. The report explores how the revolution in consumer mobile communications is changing …

The Economist Intelligence Unit conducted in August 2013 a global survey of 50 executives in utilities industries. The report explores how the revolution in consumer mobile communications is changing how utilities serve customers, encouraging them to become more responsive and engaged and to pursue strategies that make customers allies in more efficient and sustainable operations.

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  • 1. A report from the Economist Intelligence Unit How mobile is transforming the energy and natural-resources sector Utilities and the customer connection
  • 2. © The Economist Intelligence Unit Limited 20141 Utilities and the customer connection Preface 2 Introduction 3 Utilities and the new era of demanding, mobile-empowered customers 5 Meet the new entrants eyeing utilities’ customers 7 Controlling the gateways to customers 9 Staying out in front of demand-response 9 Tapping big data 10 Conclusion: Preparing for the future 11 Appendix: survey results 12 Contents 1 2 3 4
  • 3. © The Economist Intelligence Unit Limited 20142 Utilities and the customer connection Preface Utilities and the customer connection is one of three reports in a series that examines how mobile technologies are transforming the energy and natural-resources sector. It explores how the revolution in consumer mobile communications is changing how utilities serve customers, encouraging them to become more responsive and engaged and to pursue strategies that make customers allies in more efficient and sustainable operations. As the basis for this research, The Economist Intelligence Unit conducted in August 2013 a global survey of 150 energy and natural-resources executives, comprising 50 in each of the mining, utilities, and oil and gas industries. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. The author was Mark Svenvold. Riva Richmond edited the report and Mike Kenny was responsible for the layout. We would like to thank all of the executives who participated, whether on record or anonymously, for their valuable insights. Interviewees Jesse Berst, editor of the SmartGrid News Erich Gunther, chairman and chief technology officer at EnerNex Val Jensen, senior vice president of customer operations at ComEd Ian McCaig, chief executive of First Utility Brewster McCracken, president and chief executive of Pecan Street Research Rob Pratt, scientist at the Pacific Northwest National Laboratory Steve Raschke, CEO of Candi Controls Doug Scheller, vice president of business intelligence at BRIDGE Energy Group John J. Simmins, technical executive at the Electric Power Research Institute Michael Valocchi, a global energy and utilities industry analyst at IBM Business Services Bill Wilkins, chief information officer of First Utility The survey drew on 150 responses from energy and natural-resources executives around the world, comprising 50 in each of the mining, utilities, and oil and gas industries. Equal numbers were from North America (30%), Asia-Pacific (30%) and Western Europe (30%). Of the 30 countries represented, the most responses came from the US, India, Australia, Spain and the UK. Half of respondents are C-level executives or equivalent, 17% are vice-presidents or equivalent and 22% are senior managers. About two-fifths (41%) represent very large companies, with annual revenues of US$1bn or more. Please see the appendix for full survey demographics. Who took the survey?
  • 4. © The Economist Intelligence Unit Limited 20143 Utilities and the customer connection Introduction The explosive growth of mobile communications— and the rise of apps and highly mobile social media, in particular—are radically changing how businesses serve consumers. Even utilities, not known for consumer savvy, are finding that they must embrace these popular new communication tools or face the competitive pressures from companies that do. This digital embrace will forever alter the utility-customer relationship, making utilities more responsive and engaged— and leading them to increasingly view customers not as “captive rate payers” but as partners who enable more efficient and sustainable operations. This may be especially true for power companies, which are operating strained grids and looking to move into the smart-grid era. Powerful mobile devices continue to proliferate and alter consumer behaviour. Between 2011 and 2013, smartphone use grew 46% and tablet use grew 98%, according to Deloitte Research. And consumers are increasingly using their mobile devices to do business with companies; Juniper Research predicts that the value of mobile commerce transactions globally will top $3.2trn in 2017, up from $1.5trn in 2013—driven by a surge in mobile bill payments. How will these trends affect utilities? According to an August 2013 global survey of 50 utilities executives by the Economist Intelligence Unit, which also polled 50 mining and 50 oil and gas executives, mobile strategies are having the greatest impact on utilities’ efforts to improve field-force efficiencies and outage management. But a third, and perhaps more important, aspect— improving customer engagement—is what has utility executives really talking, but not always agreeing. Most utilities executives acknowledge that mobile strategies can play an important role in The opportunity to use mobile strategies to engage customers has utilities executives talking, but not always agreeing. To what extent can mobility strategies help improve your company’s response to enhancing customer engagement? % of respondents in the mining industry Strongly Moderately Minimally Not at all Source: Economist Intelligence Unit survey, November 2013. 33% 45% 8% 14%
  • 5. © The Economist Intelligence Unit Limited 20144 Utilities and the customer connection customer engagement by providing storm and outage information, helping customers manage energy use and offering them advice and incentives to conserve energy—and can generally build customer loyalty. But how much utilities are willing to invest in mobile technologies remains an open question—one that is currently “rippling across the industry”, says John J. Simmins, technical executive at the Electric Power Research Institute (EPRI), an industry-funded research organisation. Executives are divided over whether their companies will dedicate funds in the near term to boosting mobile customer engagement. While 46% of utility executives surveyed by the EIU see a critical need to engage customers, only 36% say their companies have near-term investment plans. This gap suggests that, while mobile customer engagement sounds good to many utilities executives, the value proposition is still unclear. This may be especially true for those who must win regulatory approval to make large-scale investment that might lead to rate hikes. Utilities executives should look deeper. While sceptics have valid concerns, utilities cannot afford to miss the strategic opportunities that mobile technologies offer to reduce long-term market risks and fortify customer relationships. Utilities face a difficult challenge: growing demand must be served by an ageing infrastructure. Much of the world’s basic infrastructure has exceeded its design lifetime, says Erich Gunther, chairman and chief technology officer at EnerNex, a utilities consultancy. “Replacing basic infrastructure globally would cost more than $1.5trn by 2030.” Of course, inaction hurts, too. A crumbling grid is a costly grid—EPRI estimates that US power outages cost between $104bn and $164bn a year. Most utilities are opting to make the grids that are already in place smarter, more connected and more efficient—and mobile technologies will play a key role, Mr Gunther says. Emerging risks that mobile strategies could help mitigate include those from new market entrants looking to own and leverage those relationships; “demand-response” programs, which offer electricity customers incentives to reduce usage during times of peak demand or stress; and micro-grids and self-generation systems that could pull large customers off the electricity grid altogether. Meanwhile, the expanded deployment of smart grids is affording energy companies opportunities to harness a vast new universe of data—the big data revolution—to improve customer satisfaction, realise operational cost savings and develop new sources of revenue.
  • 6. © The Economist Intelligence Unit Limited 20145 Utilities and the customer connection Utilities and the new era of demanding, mobile-empowered customers1 After Hurricane Sandy slammed into America’s East Coast, millions of people turned to the Internet, often using smartphones, for information about power and gas outages. Some utilities saw a nearly ten-fold increase in followers on Twitter and Facebook. According to Mr Simmins of EPRI, three employees huddled in a room at one north-eastern utility sent out 9,000 tweets and received 90,000 incoming messages. The barrage was a wake-up call for executives, he says. With tens of thousands of new Twitter followers, many utilities began to ask themselves what to do with all these newfound connections. In most of the US and Europe, customer engagement is king, and mobile devices and social networks are increasingly the best means of reaching customers. In the UK electricity market, acquiring a customer costs about three-quarters of his first year of utility bills, says Bill Wilkins, chief ❛❛ Utilities are faced with a decision. They either need to embrace the vision of being a consumer-facing business, offering consumers value and convenience, or they are destined to become a ‘wires’ company—and they’ll do only that. ❜❜ Rob Pratt, scientist at the Pacific Northwest National Laboratory To what extent can mobile communication (eg, alerts and apps) help improve the following areas of customer engagement? % of 41 respondents in the utilities and oil & gas industries that describe themselves as retail, integrated, downstream or services businesses. Providing customers with advice on consumption Providing customers with targeted offers Facilitating smart-grid deployment Notifying customers about potential or actual outages and recommending actions Receiving customer reports on potential causes and actual causes of outages Incentivising customers to reduce consumption during high demand periods Recapturing customer loyalty and engagement Facilitating and managing increasing eCar2Grid loads Source: Economist Intelligence Unit survey, November 2013. 34% 54% 50%54% 35%37% 20% 38%
  • 7. © The Economist Intelligence Unit Limited 20146 Utilities and the customer connection information officer at First Utility. To boost loyalty—and, thus, the bottom line—First Utility partnered with Opower to let customers monitor and track electricity use with their mobile devices, making information about kilowatt hours used more meaningful and actionable. “If you don’t have something other than a transactional relationship with the customer,” says First Utility’s CEO, Ian McCaig, “then your brand has no relevance or meaning to the daily lives of customers.” Indeed, Jesse Berst, editor of the SmartGrid News and long-time observer of electricity markets, argues that a new era of customer engagement is at hand. “Every business—and this absolutely includes utilities—now needs to reach out proactively to its customers whenever, wherever customers want it,” he says. “It’s very important that you find your customers where they are. It’s about knowing what each individual customer’s preferences are, what programmes they’re signed up for and giving them that tailored experience. That’s what we mean by customer engagement.” At a time when banks and many other businesses offer mobile services to consumers, should utilities to do the same? They certainly have challenges that better, quicker customer engagement could help address. Mobile alerts could help electricity companies encourage consumers to curb electricity use during times of peak demand. Utilities of all kinds could distribute information and coupons that might build customer loyalty. Utilities also face critical long-term risks should they fail to engage customers effectively, says Rob Pratt, a lead scientist studying smart-grid deployment, communications architecture and electricity markets at the Pacific Northwest National Laboratory (PNNL) in Richland, Washington. “Utilities are faced with a decision,” Mr Pratt says. “They either need to embrace the vision of being a consumer-facing business, offering consumers value and convenience, or they are destined to become a ‘wires’ company—and they’ll do only that. They will be ‘dis-intermediated’, in other words, from their customers by other entities that offer these customer-facing services.”
  • 8. © The Economist Intelligence Unit Limited 20147 Utilities and the customer connection Many utilities are diving into the customer- engagement waters by partnering with energy consulting companies and consumer-app developers, mostly in an effort to boost brand loyalty and build services that help customers manage their energy consumption. ComEd, a unit of Chicago-based Exelon, recently partnered with energy app developer Opower to build a platform that puts “control back into our customers’ hands”, says Val Jensen, ComEd’s senior vice president of customer operations. Baltimore-based utility BGE is also handing over control with its Peak Time Rebate Program, which uses emails, tweets and other prompts to help participating customers save on their electricity bills if they reduce their electricity use during peak periods. All this is great for utilities—unless platform developers like Opower and other new entrants into electricity markets become the go-to player for customers. As customers become more actively engaged in their electricity delivery, such companies are increasingly offering products and services once exclusively under the purview of utilities. For instance, companies like Calico Energy of Bellevue, Washington, are offering an array of analytics, demand-management, load-control and smart-grid management services that utilities need but increasingly are unable to handle on their own. “The danger,” says Mr Berst, “is that what happened to telecom companies might happen to utilities. When rate-paying customers begin to have a relationship with some other party—energy management becoming just a piece of that relationship—and customers don’t really care who the utility is, that could have some long-term negative implications for utilities.” But others argue that the risk to utilities of dis-intermediation by third parties is overblown. “Mobile apps and mobile computing are transforming just about every industry on the planet,” says Brewster McCracken, president and chief executive of Pecan Street Research, a smart-grid and electricity markets research consortium based in Austin, Texas. But he doesn’t see apps taking off like wildfire. “Utilities apps are things that people are, generally, at best sporadically, interested in, but they’re not transformative. They’re not useless; it’s just not transformative.” But soon things could be quite different, according to Michael Valocchi, a global energy and utilities industry analyst at IBM Business Services. At a recent SAP utilities conference, Mr Valoccchi predicted that, within 10 years, threats to utilities’ revenue streams from new entrants and demand- response programs will force utilities to develop new business models and alliances. Already, electricity-rate aggregators are offering middleman services; they will handle energy- efficiency issues for businesses, find ways to save them money and negotiate better power deals for them with utilities companies. Some municipalities are realising that their aggregated electricity Meet the new entrants eyeing utilities’ customers2 ❛❛ The danger is that what happened to telecom companies might happen to utilities. ❜❜ Jesse Berst, editor of the SmartGrid News
  • 9. © The Economist Intelligence Unit Limited 20148 Utilities and the customer connection demand has become a key leverage point for negotiating better rates on the open market. Hospitals, universities, military bases and others are exploring the idea of using cheap natural gas for self-generation of power with micro-turbines and other means, leaving the traditional grid behind in a trend called “grid divorce”. “That would be a disaster for utilities,” says Mr McCracken, “because utilities make all their money selling base-load electricity, and they make most of their money from large commercial customers. Micro-grids could take all the meat of utility profits, leaving only the gristle.” So while utilities might appreciate the reduced pressure on their stressed grids today, they should beware of too much of a good thing. “As new entrants reach out directly to consumers and bypass energy providers,” Mr Valocchi says, “the unspoken mandate will be innovate, partner or die.”
  • 10. © The Economist Intelligence Unit Limited 20149 Utilities and the customer connection With increased deployment of smart-grid systems and “smart” appliances, experts expect that demand-response programmes will become a long-term feature of the shifting electricity marketplace—and customer engagement, facilitated by social media and mobile apps, will become important gateways for utilities. Why? Because residential- and commercial- customer loyalty will increasingly be won or lost on the quality of utility-app dashboards. Take the PowerTools app, a platform developed by Candi Controls of San Francisco in partnership with San Diego Gas & Electric. Like others of its kind, the PowerTools dashboard offers customers a way to visualise cost and usage information and make consumption decisions. It provides a history of customers’ electricity savings and lets them set usage goals and track progress in achieving those goals. It also provides alerts, coupons and bill- paying services. Most important for utilities, the platform will eventually be a kind of Rosetta Stone for building utility relationships “beyond the meter”, according to Steve Raschke, CEO of Candi Controls. If utilities can connect to any smart-grid device that a customer happens to buy, no matter what language that device uses, then utilities will own the customer’s energy environment. The utility app becomes a strategic-control point—a gateway—to all systems and smart-grid-enabled devices. “But if utilities don’t position themselves correctly, they’ll end up paying for that position later,” Mr Raschke says. Staying ahead of demand-response More than 38m advanced smart-grid meters have now been installed in the US, with that number expected to nearly double by 2015, when 50% of households in 22 states will have advanced smart-grid meters, according to the Institute for Electric Efficiency (IEE). A more mature smart-grid will increase customers’ expectation of choices in how and when—and with what devices—they interact with the grid. And when customers exercise this choice, utilities will feel the imperative to respond. Add to the equation commercial and industrial smart-building systems—systems that control and monitor electricity use in offices and factories via two-way smart-grid connections. Such systems enable utilities to find extra capacity when it is needed during demand peaks, drawing extra supply from buildings that have supply to offer. When smart buildings band together—they can be connected as a suite of aggregated buildings or smart communities— that aggregated electricity demand and supply creates an entirely new partnership between utilities and their customers. Indeed, a recent EPRI study foresees a new landscape in which “commercial buildings are increasingly able to provide a range of grid- support functions.” In exchange for this new demand-response service, commercial-building owners will expect tailored or adjustable electricity rates. Controlling the gateways to customers3 Aggregated electricity demand and supply will create an entirely new partnership between utilities and their customers.
  • 11. © The Economist Intelligence Unit Limited 201410 Utilities and the customer connection Tapping big data The expansion of the smart-grid will usher in a new age of massive data inflows. These data will bring enormous new opportunities for utilities, says Mr Valocchi of IBM, including cost savings from improved efficiencies in smart-grid markets, reduced electricity theft and the ability to predict system failures and vulnerabilities. They will also let utilities identify customer segments—for example, groups based on energy-use patterns— and offer them specialised products and services. However, utilities have taken a cautious, albeit inquisitive, stance towards big data analysis amid uncertainty about the return on investment. They should not be so timid. Small improvements in efficiency can provide significant returns. For instance, a 1% improvement in efficiency across natural-gas-fired power plants globally would yield $66bn in fuel savings, according to a study commissioned by General Electric. Bigger returns will come from improved ability to predict customer needs, says Doug Scheller, vice president of business intelligence at BRIDGE Energy Group, a utilities energy consultancy based in Marlborough, Massachusetts. “As smart-grid data becomes richer, there is the prospect of some significant income opportunities emerging from data unrelated to electricity use,” says Mr McCracken of Pecan Street. These data have never been available to product makers before but will be valuable to them. “Utilities will charge rents for access to their digital infrastructure, the same way that cable and mobile telecom [companies] charge rents for access to their digital infrastructure,” he says.
  • 12. © The Economist Intelligence Unit Limited 201411 Utilities and the customer connection For many, the key benefits of mobile technologies are of the blocking-and-tackling sort: field-force improvements and operational savings from more efficient maintenance, meter readings, response to outages and the like. Much more could be done in this regard; a 2012 EPRI study shows little has yet been done to improve the efficiency of interactions between utilities operations centres and field-force workers. To demonstrate the opportunities, EPRI used a souped-up iPad 2 to help workers “see” electrical networks out in the field in real time using augmented reality. Field workers were able to visualise important network-asset information, create work requests while on site, access maintenance manuals, obtain real-time analysis of systems status and visualise problems in the field. For example, electricity grid diagrams can be superimposed on satellite imagery of a parking lot to show workers exactly where important lines are buried. Such tools offer the potential to greatly reduce work cycles, reduce dangerous accidents and shorten outage times, among other benefits. Most utilities executives quickly grasp the potential benefits to the industry, including lower services costs and capital expenditures, reduced risks and regulator fines and increased revenue. Indeed, an overwhelming majority (80%) of the 50 utilities executives surveyed by the EIU believe that mobile strategies can improve field-force efficiency, productivity and capacity. Following Hurricane Sandy, some electric utility regulators began pushing utilities to implement alternative ways to managing outages effectively and prepare for a world in which severe storms increase in number and intensity. In an electricity environment where uncertainty reigns, investing in innovation will not always bring certain returns, says IBM’s Mr Valocchi. “Where variables abound,” utilities should view investments as “buying an option for potential control points”. The mobile devices in tucked customers’ pockets are key control points that utilities can ill-afford to ignore. With time, mobile control points will apply to new markets. E-car connections to the grid will be by definition mobile, and these “auto-mobile” connections will be made through applications accessed via handsets or built into e-cars themselves. “You may or may not agree on the rate of uptake of e-cars,” Mr Valocchi says. “But what if they arrive? What control point do you want to have in that eventuality?” Other revenue opportunities are likely to emerge from the Internet of Things revolution and the data these machines produce as well as from strong customer relationships established via social media and mobile applications. In this changing environment, those utilities that act now to grab opportunities to bolster their market positions and gain new revenue sources will find themselves with the strategic advantage in the electricity marketplace of the future. Conclusion: Preparing for the future 4
  • 13. © The Economist Intelligence Unit Limited 201412 Utilities and the customer connection Appendix: survey results Percentages may not add to 100% owing to rounding or the ability of respondents to choose multiple responses. Well above average Somewhat above average Average/on par with peers Somewhat below average Well below average Don’t know Profitability Revenue growth Market share Customer loyalty Innovation Productivity Safety Regulatory compliance In your opinion, how effective is your organisation in each of the following performance indicators compared with its peers? Please rate on a scale from ‘Well above average’ to Well below average’. (% respondents) UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING 18 40 30 10 2 18 40 36 2 4 26 46 26 2 14 30 46 10 18 32 32 14 4 24 52 20 2 2 24 36 28 6 6 16 24 40 18 2 20 40 32 4 2 2 26 38 30 6 18 48 28 2 4 22 46 28 4 24 30 34 12 14 42 22 16 4 2 28 38 28 2 4 22 40 32 6 20 32 36 10 2 10 68 20 2 34 40 24 2 26 42 24 2 4 2 28 50 20 2 30 34 34 2 30 44 24 2 24 54 20 2
  • 14. © The Economist Intelligence Unit Limited 201413 Utilities and the customer connection How do your employees access information in the field today? Please select top two. (% respondents) Laptops Smartphones Radios Tablets Paper Machine-to-machine communication outputs Handheld computers Other Utilities Oil and gas Mining 62 64 52 22 38 40 24 20 42 18 26 16 22 18 12 20 14 16 20 14 10 2 0 0
  • 15. © The Economist Intelligence Unit Limited 201414 Utilities and the customer connection How do you expect your employees to access information in the field 5 years from now? Please select top two. (% respondents) Tablets Smartphones Laptops Handheld computers Machine-to-machine communication outputs Radios Paper Other Utilities Oil and gas Mining 66 56 66 38 62 48 38 28 30 16 28 16 12 14 18 10 6 12 4 0 4 4 2 0
  • 16. © The Economist Intelligence Unit Limited 201415 Utilities and the customer connection Excellent Very good Fair Somewhat poor Very poor Don’t know The workload and status of field workers Conditions in the field that affect productivity (ie, assets, infrastructure and people) Conditions in the field hazardous to health and safety Market trends and events Customer trends and events How do you rate the ability of key experts or decision-makers at your company to understand and respond appropriately in real-time to the following conditions using mobile data and communications? Please select a response in each row on a scale from ‘Excellent’ to ‘Very poor’. (% respondents) UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING 6 46 46 2 14 42 34 8 2 14 60 24 2 26 34 36 4 22 34 34 10 32 20 42 6 10 48 38 2 2 20 44 26 8 2 24 50 26 12 44 30 12 2 10 46 32 10 2 18 46 34 2 10 46 38 6 6 36 50 6 2 12 58 24 4 2 What are the main constraints you face in getting access to timely field data in general? Please select top three. (% respondents) Approvals cause lag-time Wireless connections are not available or sufficiently reliable Our data collection capabilities in the field are inadequate (eg, for inspections, surveys, audits) Paperwork causes lag-time Our data communication capabilities to and in the field are inadequate (eg, for coordination, collaboration, support, intelligence) Mobile devices are not sufficiently reliable or safe Other None of the above Utilities Oil and gas Mining 36 50 20 38 34 34 28 30 38 34 34 26 26 22 28 22 28 12 0 4 0 24 14 36
  • 17. © The Economist Intelligence Unit Limited 201416 Utilities and the customer connection What are the main constraints you face in remote or hazardous locations, specifically? Please select top three. (% respondents) Wireless connections are not available or sufficiently reliable Our data collection capabilities in the field are inadequate (eg, for inspections, surveys, audits) Mobile devices are not sufficiently reliable or safe Approvals cause lag-time Our data communication capabilities to and in the field are inadequate (eg, for coordination, collaboration, support, intelligence) Paperwork causes lag-time Other None of the above Utilities Oil and gas Mining 46 46 40 34 38 36 34 42 18 28 34 16 22 20 30 22 20 14 0 2 2 24 14 36 Highly Moderately Minimally Not at all Paperwork causes lag-time Approvals cause lag-time Wireless connections are not available or sufficiently reliable Mobile devices are not sufficiently reliable or safe Our data collection capabilities in the field are inadequate (eg, for inspections, surveys, audits) Our data communication capabilities to and in the field are inadequate (eg, for coordination, collaboration, support, intelligence) To what extent do these constraints affect your ability to make good decisions quickly? Please select a response in each row on a scale from ‘Highly’ to ‘Not at all’. (% respondents) UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING 26 58 11 5 35 55 10 43 36 14 7 35 55 10 48 41 11 39 54 8 23 62 12 4 15 62 19 4 39 57 4 16 63 16 5 26 61 13 40 50 10 20 45 30 5 38 46 8 8 27 55 18 7 64 29 33 53 13 59 41
  • 18. © The Economist Intelligence Unit Limited 201417 Utilities and the customer connection Appendix: consumer survey results Which of the following are obstacles to your company expanding its use of mobile? Please select all that apply. (% respondents) My company is concerned about the security of mobile data My company is concerned about the cost of expanding its use of mobile My company is concerned that mobile unreliability will put critical processes at risk My company is concerned that mobile unreliability will require costly redundant communication systems Cultural obstacles in my workforce (eg, discomfort with new technologies) limit our adoption of mobile technologies My company sees other communications options (eg, fixed-line, radio) as preferable to mobile communications Other My company does not face obstacles to expanding its use of mobile Utilities Oil and gas Mining 49 49 41 39 42 53 36 30 28 33 37 16 18 26 38 23 7 16 5 5 6 18 7 13 Do customer mobile apps aid your smart-grid management? (% of respondents in the utilities industries) Yes No 62 38
  • 19. © The Economist Intelligence Unit Limited 201418 Utilities and the customer connection Appendix: consumer survey results Strongly Moderately Minimally Not at all Don’t know/ Not applicable Reducing paperwork Reducing approval lag-time Scheduling and crew management Crisis or emergency management Preventing failures Environmental safety and sustainability Achieving high productivity and capacity (eg, reducing downtime) Assuring regulatory compliance Enhancing customer engagement Taking customer meter readings Peak-load management and demand response Smart-grid management Assuring product quality To what extent can mobility strategies help improve your company’s response to the following operational challenges? Please select a response in each row on a scale from ‘Strongly’ to ‘Not at all’. (% respondents) UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES UTILITIES UTILITIES OIL AND GAS 34 56 8 2 32 48 18 2 24 62 14 33 51 14 2 38 44 16 2 26 50 24 25 49 22 2 2 22 54 22 2 20 42 36 2 46 44 6 2 2 40 42 16 2 14 67 16 2 31 35 31 2 2 25 41 18 12 4 20 54 24 2 16 55 25 4 20 36 34 8 2 14 59 27 28 56 14 2 28 52 16 2 2 16 61 22 16 35 37 8 4 14 41 39 4 2 22 46 32 33 45 14 8 33 39 25 4 18 46 34 2 38 38 18 4 2 34 44 18 4 34 42 10 10 4 10 51 31 6 2
  • 20. © The Economist Intelligence Unit Limited 201419 Utilities and the customer connection In which areas of mobility do you think your company most needs to improve to enhance its performance today? Please select top three. (% respondents) Mobile data security Mobile connectivity (eg, wireless telecom network, Wi-Fi networking) Data collection in the field Big data analysis 4D (3D space and time) and visual display of geophysical data Data delivery to offsite to headquarters or other sites where decision-makers are located Mobile devices and platforms (ie, hardware and software) Customer engagement None of the above Utilities Oil and gas Mining 48 52 32 46 40 34 34 32 36 40 28 32 34 28 38 30 22 36 32 32 16 16 8 16 2 0 12
  • 21. © The Economist Intelligence Unit Limited 201420 Utilities and the customer connection In which areas of mobility is your company most likely to invest over the next five years? Please select top three. (% respondents) Mobile data security 4D (3D space and time) and visual display of geophysical data Big data analysis Mobile connectivity (eg, wireless telecom network, Wi-Fi networking) Data collection in the field Data delivery to offsite to headquarters or other sites where decision-makers are located Mobile devices and platforms (ie, hardware and software) Customer engagement None of the above Utilities Oil and gas Mining 46 58 32 46 30 50 36 46 34 36 34 28 26 24 42 26 28 34 28 30 14 22 8 10 0 0 10
  • 22. © The Economist Intelligence Unit Limited 201421 Utilities and the customer connection What mobile technology do you use to enhance health and safety? Please select all that apply. (% respondents) Laptops Smartphones GPS/GIS for mapping sites and locating resources Radios Tablets Mobile telemetry (ie, for collection and transmission of data to surface sensors and software systems) Handheld computers Augmented reality (ie, for interactive 3D visualisation) Robotics for reaching difficult or hazardous areas Other We don’t use mobile technologies to enhance health and safety None of the above Utilities Oil and gas Mining 62 64 50 56 64 50 50 54 56 40 34 44 36 42 30 24 34 32 30 20 34 8 20 28 8 18 28 2 0 0 2 4 8 4 0 0
  • 23. © The Economist Intelligence Unit Limited 201422 Utilities and the customer connection How do you use mobile technologies to improve worker health and safety? Please select all that apply. (% respondents) Workers have devices that improve their communication while in the field Workers have devices that improve their communication while underground or in remote or hazardous locations Mobile devices collect data on employee performance that we use to prevent incidents or put in place evidence-based health and safety improvements Mobile devices guide workers in order to prevent incidents Mobile devices detect and communicate hazardous conditions (eg, buildups of underground gases in mines) Mobile communication facilitates quicker repairs and better maintenance of assets Other We don't use mobile technologies to improve worker health and safety None of the above Utilities Oil and gas Mining 62 72 46 38 44 48 48 32 48 38 26 36 24 32 40 32 30 26 0 0 0 0 6 12 4 2 0 Strong improvement Moderately improvement Weak improvement No improvement Don’t know We have detected hazards (eg, buildups of underground gases) or prevented explosions and other incidents We have prevented worker incidents and accidents We have responded more quickly to worker incidents and accidents and unplanned outages We have reduced worker incidents and accidents and related costs We have saved workers’ lives How much have mobile technologies helped you to improve on the following health and safety measures? Please select a response in each row on a scale from ‘Strong improvement’ to ‘No improvement’. (% respondents) UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING UTILITIES OIL AND GAS MINING 4 56 8 6 25 17 38 25 6 15 18 66 6 6 4 25 33 23 4 15 19 44 19 6 13 30 40 22 6 2 27 42 15 4 13 30 40 13 4 13 30 46 18 4 2 22 49 10 6 12 23 38 23 4 13 42 28 22 6 2 15 46 13 8 19 15 38 19 9 19 26 48 18 2 6
  • 24. © The Economist Intelligence Unit Limited 201423 Utilities and the customer connection Strongly Moderately Minimally Not at all Don’t know Recapturing customer loyalty and engagement (ie, from competing service providers, rate aggregators, utility intermediaries, etc) Providing customers with advice on consumption Providing customers with targeted offers Facilitating smart-grid deployment Incentivising customers to reduce consumption during high demand periods (ie, through time-of-day variable rates) Receiving customer reports on potential causes and actual causes of outages (eg, storm damage, leaning poles) Notifying customers about potential or actual outages and recommending actions Facilitating and managing increasing eCar2Grid loads To what extent can mobile communication (eg, alerts and apps) help improve the following areas of customer engagement? Please select a response in each row on a scale from ‘Strongly’ to ‘Not at all’. (% respondents) UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS 17 44 22 6 11 17 50 21 8 4 29 47 6 6 12 25 42 17 13 4 33 39 11 6 11 21 42 25 8 4 29 35 12 12 12 21 25 29 21 4 22 44 11 11 11 13 42 21 17 8 24 24 24 12 18 13 50 13 13 13 17 44 22 6 11 21 42 17 17 4 12 29 18 18 24 8 38 17 17 21 0-3 years 4-6 years More than 6 years Don’t know Recapturing customer loyalty and engagement (ie, from competing service providers, rate aggregators, utility intermediaries, etc.) Providing customers with advice on consumption Providing customers with targeted offers Facilitating smart-grid deployment Incentivising customers to reduce consumption during high demand periods (ie, through time-of-day variable rates) Receiving customer reports on potential causes or actual causes of outages (eg, storm damage, leaning poles) Notifying customers about potential or actual outages and recommending actions Facilitating and managing increasing eCar2Grid loads How long do you expect it to take for your company to rollout mobile capabilities to customers to enhance engagement in these areas? (% respondents) UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS UTILITIES OIL AND GAS 64 21 7 7 60 35 5 57 36 7 55 35 10 57 36 7 80 15 5 62 31 8 50 33 6 11 71 21 7 47 47 6 58 42 44 44 6 6 60 27 13 59 35 6 50 40 10 40 40 7 13
  • 25. © The Economist Intelligence Unit Limited 201424 Utilities and the customer connection United States of America India Australia, Spain, United Kingdom Canada, Germany China, Singapore, South Africa, Sweden Thailand Argentina, Austria, Colombia, Denmark, France, Nigeria, Switzerland, Chile, Cyprus, Greece, Hong Kong, Lebanon, Malaysia, Mexico, Norway, Pakistan, Poland, Saudi Arabia In which country are you personally located? (% respondents) 25 12 7 5 3 2 1 Asia-Pacific North America Western Europe Middle East and Africa Latin America Eastern Europe In which region are you personally located? (% respondents) 30 30 30 6 4 0 Less than $100m $100m-$500m $500m-$999m $1bn-$4.9bn $5bn-$9.9bn $10bn or more What are your organisation’s global annual revenue in US dollars? (% respondents) 15 35 9 22 4 15 Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director Other C-level executive SVP/VP/Director Head of business unit Head of department Manager Other Which of the following best describes your title? (% respondents) 2 7 8 9 24 17 5 17 11 0 General management Finance Operations and production IT Marketing and sales Risk Legal Procurement Supply-chain management Information and research R&D Customer service Human resources Other What is your main functional role? (% respondents) 21 16 15 13 11 6 5 5 3 2 2 1 0 0
  • 26. © The Economist Intelligence Unit Limited 201425 Utilities and the customer connection Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor the sponsor of this report can accept any responsibility or liability for reliance by any person on this white paper or any of the information, opinions or conclusions set out in the white paper. About our Sponsor As the world’s leading provider of enterprise application software, SAP delivers products and services that help accelerate business innovation for its more than 183,000 customers in more than 120 countries. See more related to this report at sap.com/mobile-powerutilities Cover:NASA
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