Emergence and transformation of digital utilities in the “smart” era
 

Emergence and transformation of digital utilities in the “smart” era

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By Jonathan D Loretto and Michel van Zutphen

By Jonathan D Loretto and Michel van Zutphen
Oracle Open World 2013

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The Emergence of the Digital Utility
Reinventing the Digital Customer Experience

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Emergence and transformation of digital utilities in the “smart” era Emergence and transformation of digital utilities in the “smart” era Presentation Transcript

  • Emergence and Transformation of Digital Utilities in the “Smart” Era Jonathan D Loretto, Michel van Zutphen Oracle Open World 2013
  • 2Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Agenda  The Emergence of the Digital Utility  Reinventing the Digital Customer Experience  Illustrative CX examples  Oracle CX  Conclusion
  • 3Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Digital transformation of global corporations is driven by outside-in changes where innovation appears faster at the far reaches of the organisation digital, cloud-based services provide new opportunities for agile global platforms through centralised management digital transformation offers a different paradigm for global IT organisations and new prospects to be grasped
  • 4Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 The digital generation is setting expectations on global corporations and driving demand for digital transformation The digital consumer drives outside-in transformation Agile digital platforms exploit federated services The realisation of benefits needs to be weeks not years
  • 5Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 The digital consumer drives a need to transform outside-in versus inside-out, to drive speed-to-benefit and to reduce costs Customer Focus  Consistent customer experience  Multiple channels and devices  Immediate 360 view of customers  Agile response to new demands  Proactive creation of new offers Corporate Focus  Re-use system investments  Align old and new worlds  Consistent processes and data  Central governance & security  Cost efficient operation Inside-Out for stability and integration Outside-In for speed and flexibility Digital Enterprise
  • 6Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Technology-enabled initiatives in: • Customer Experience • Internal Operations • Business models • Core digital capabilities Leadership capabilities including: • Vision • Governance • Engagement • IT-Business Relationships • Change management Digital leaders exhibit two common traits: Digital Intensity and Transformation Management Intensity Digital Intensity Transformation Management Intensity
  • 7Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 This is not for us! Beginners Building the Digital Advantage….Digitalintensity Transformation management intensity
  • 8Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 digital This is not for us! digitaldigital digital digital digital Beginners Fashionistas Building the Digital Advantage….Digitalintensity Transformation management intensity
  • 9Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 digital This is not for us! digitaldigital digital digital digital Analogue Transformation Beginners Fashionistas Conservatives Building the Digital Advantage….Digitalintensity Transformation management intensity
  • 10Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 digital This is not for us! digitaldigital digital digital digital Analogue Transformation Digirati! GROWTH + 9 % PROFIT + 26 % MARKET VALUE + 12 % Beginners Fashionistas Conservatives Building the Digital Advantage….Digitalintensity Transformation management intensity
  • 11Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Every Industry has Digital Leaders “Utilities are in great majority conservatives" “There is a great consensus around the transformative potential of Digital Technologies, although with limited hope for significantly increasing revenue"
  • 12Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Digital Utilities Transformation: Driving value from the smart energy infrastructure SMART RENEWABLESMART CONSUMERSMART GRIDSMART METERING ELECTRIC VEHICLES PHOTO VOLTAIC SMART DEVICES HOME ENERGY MANAGEMENT DIGITAL ASSETS SMART METERS BUSINESS AS USUAL DIGITAL ENABLED BUSINESSDIGITAL UTILITIES TRANSFORMATION CLOUDMOBILITYBPMS BIG DATA Technology Advancement & Consumer pull Energy transition Service Improvement & Cost Saving Pressure
  • 13Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Agenda  The Emergence of the Digital Utility  Reinventing the Digital Customer Experience  Illustrative CX examples  Oracle CX  Conclusion
  • 14Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 With the developments such as smart meters, utility customer‟s needs and expectations are higher than ever Improve Customer Relationship  Better understanding of customers  Billing on actual usage  Better responsiveness for the interventions  Improvement of existing services Diversification of offerings and services  Tariffed offering differentiated according to fixed or variable periods  Be informed when the tariff is higher  Be able to act to generate savings (even thinking about it)  Compensation in case of load shedding without a control system Optimization & Financial gains  Decrease in the volume of claims  Optimization of certain processes  Reduction in the billing cycle  Decrease in the fraud  Reduction in the average cost of supply Smart environment raise the customer expectations with a right balance between comfort and energy savings While People are taking control of their energy consumption and automating their home, Energy suppliers interacting with their customers in new ways  Help them understand how they consume energy  Help them reduce bills, while retaining their desired level of comfort  Provide new services, such as micro-generation, storage and electric vehicle battery management  Receive the request for load shedding by SMS or any other digital channels.  Access to a web portal allowing a view of the load curve and a summary of load shedding
  • 15Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 These changes have led to key business and information challenges faced by Utilities Business Challenges  High cost to serve: phone channel still dominant; high call volumes & low FTR  Lack of Insights: poor data quality & analytics relative to other industries means opportunities are lost  SMART: large & complex requirements that requires focus & investment  Social media: accelerates the impact & frequency of negative customer experiences by going viral  Low NPS: Customers compare Utility experience against banking, TV, mobile & broadband – not other Utilities  Price: Managing customers‟ expectations around the increasing price of electricity  Low Engagement: Customers have been indifferent & disengaged for Utility  Sophisticated buyers: increasingly demanding consumers want more for less  Customers are forcing change and it aggravates Utilities‟ existing challenges and introduces new challenges Information Challenges  Limited Context – Situation: Information is too generic for action – Problem: Not made available in context – Impact: Decline in resolution of issues  Information is required in Real-time – Situation: Information is too late for action – Problem: No method to process events – Impact: Limited operational responsiveness  Actionable Information – Situation: Information has no guidance – Problem: No insight for next steps – Impact: Increased cost to business Consumer behaviour is undergoing on a major shift due to the digital revolution
  • 16Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 The new norm of Customer Experience in Utilities “Utilities have analyzed data for many years, with spreadsheets and custom tools; mere fraction of data generated by smart meters and IEDs have transformed the behavior of customer , which now requires new ways / transformation in analyzing Customer behaviors to provide insights which is delivered using DUT” Multiple Channel Communications Customer Segmentation and Empowerment Customized Product & Service for everyone Smart Meter data Analytics Changing Perception- From Ratepayers to Valued Customers @ How can I provide right service to right customer through right channel? Does he belong to high temperature geography and might buy rooftop Solar PV? Kevin‟s job, work- timings and preferences very different from his neighbors Smart meter, IHD generate huge & variety of data; how can I have actionable insights? How to win the trust of my customers & make them feel special?
  • 17Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Digital transformation offers a different paradigm for global IT organisations and new prospects to be grasped Technology Architecture • Connects omniChannel to existing back office investments • Agile framework e.g. Plug & Play, PAYG services, in line with business need Operating Model • Spans governance, ownership, accountability, organisation structure, new ways of working • Best of breed vendors managed in an integrated service framework • Managed service delivered to agreed SLAs Commercial Model • Utility pricing aligned to business outcomes • Pay as you go to reduce upfront investment Digital Enterprise Technology Architecture Commercial Model Operating Model
  • 18Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 ...and is already adopted by Capgemini; Immediate™ Framework. Industrialisation Costreduction Speed Value Systems of Records Systems of Differentiation Systems of Innovation Overall objective Agile interaction layer Robust application layer Pace-layering distinguishes the robust application layer and the agile interaction. Speed Value Industrialisation Costreduction
  • 19Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Agenda  The Emergence of the Digital Utility  Reinventing the Digital Customer Experience  Illustrative CX examples • Lean energy retailer • Energy efficiency • Self-sufficient energy community  Oracle CX  Conclusion
  • 20Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Lean energy retailer in a competitive market Business context Business issues • Competition and more in particular new entrants, fuel a pressure on retail prices • Cost-to-Serve and cost-to-acquire levels need to be lower to preserve a healthy margin • Differentiating offerings and good customer service are required to win, grow and keep customers Revenues Total Operational Costs OPEX Energy Cost (including costs and charges) Gross Margin Operational Cost to Serve General Marketing Costs Distribution Costs CtA general CtS general Net Margin* Full Cost to Acquire (CtA) Full Marketing Costs Full Cost to Serve (CtS) Operational Cost to Acquire Operational Marketing Cost Transformation program • Transform to a customer-focused energy retailer first focusing on optimizing the operational model:  Standard products and services  Lean & mean processes  Aggressive financial steering & control  Agile IT platform.  And then get, keep and grow profitable customers
  • 21Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Lean energy retailer in a competitive market Business transformation via layered IT-platform Layered IT Platform  Multiple Layers Presentation – Process – Integration – Transaction – Data  Service Oriented Architecture Application functionality shared via services  Combining build to change, build to last Web based portals. BPM for flexible processes. ERP systems in Back-end 1 CRM Campaign management Sales Contracts Employee Portal Other system Datahub Other apps Orchestration layer Web Portal Self Service Portal Datawarehouse BAM Reporting (tac & strat) Marketing intelligence AVAYA CTI IVR Output management document formatting & routing ECM @ Mail E-mail Web Other interfaces Banking General ledger Social services SMS Central registers Billing Billing Credit & Collections mgt Consumption Data Quality Mkt. Fulfillment Meetdata bedrijf UWL Top 10 transactions Integration layer webservicewebservicewebservicewebservicewebservicewebservice
  • 22Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Energy Efficiency for San Diego Gas & Electric - Business context Objective and scope • Provide customers with new insights, convenience and practical support for being more energy conscious • Give SDGE a new channel for interaction with customers through marketing offers, goals and actions – and links with the customer portal, outage management and social media • Future extension for Demand Response, Home Automation, Electric Vehicle Management etc. Home Energy Management is no longer an adjunct to “Smart”, it is a key part of Digital strategy
  • 23Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Energy Efficiency for San Diego Gas & Electric - Solution • Goals and actions • Tips and hints • Compare vs weather • Compare vs previous periods • Customer offers • „Ecoscore‟ Android App iOS App Data Services Transform Layer Applications API Access Control Visualization Layer Gateway Stack AccessControl Browsers 72 Premises Devices Cloud Services Gateway Normalized Data Warehouse Enterprise & 3rd Party Systems Apps  The SDGE PowerTools app has energy consumption as its core information  But the app also provides the opportunity for interaction with the customer... • YouTube videos • Twitter feed • Outage map • Link to customer portal (e.g. for mobile bill payment)
  • 24Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Texel: self-sufficient energy community Context The island of Texel wishes to supply its energy needs entirely from local renewable sources in 2020  Dutch island in the North sea  165 km2 & 6,000 households.  Industries: Recreation, Fishery, Agriculture  Energy needs (year) Elektricity : 80 tWh, Gas 22 mio m3 Road map to a sustainability Texel 2020  Community Energy Management: Cloud Power  Urban solar (PV) projects  Solar-farms  Biogas digesters  Biogas fired CHP (electricity and heating) And in the orientation phase:  Wind turbines  Deep geothermal energy  Tidal TexelEnergie, a local Energy community  Fulfils the community energy needs  Sells, produces and buys renewable energy;  Encourage and assist its members in the reduction of their energy consumption;  Encourage and assist its members in the implementation of domestic power generation - like PV-panels -;  Contribute to the local economy on the Island of Texel.
  • 25Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Control signals Texel: self-sufficient energy community Solution Individual participants CommunityGrid company Collective generation Local generation Metering Home Energy Management Electricity, gas, heating, cold, water Central Energy Management Interval readings Interval readings Interval readings Interval readings Energy advices One-hour-ahead price-signals (Real-time signals) One-day-ahead price-signals Smart Appliances / Equipment Household profiles Control signals • Control appliances, smart plugs and lighting • Inform occupant on the hourly prices (TOU) • Home energy management (Home as a microgrid) • Analyses of volumes  consumption, production,  exchanged energy with the community (grid)  smart appliances, equipment and smart plugs • Budgetary control and analyses Smart Home • Forecasting • Balancing & Scheduling • Execution & monitoring Energy program • Deliver volumes and prices to Billing • Analyses and generate energy advices Virtual Smart GridSmart Metering
  • 26Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Agenda  The Emergence of the Digital Utility  Reinventing the Digital Customer Experience  Illustrative CX examples  Oracle CX  Conclusion
  • 27Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Capgemini‟s H-architecture for Customer Experience MultichannelExperience Insight& Analytics Personalized environment SocialMedia integration CRM – Mark. & Service Autom.DecisioningeCommerce Security Integration and Orchestration Meter Data CC&B EMS HEMS ESR Service Delivery NMS Governance
  • 28Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 The Oracle solution stack against H-model MultichannelExperience Insight& Analytics Personalized environment SocialMedia integration CRM – Mark. & Service Autom.DecisioningeCommerce Security Integration and Orchestration Meter Data CC&B EMS HEMS ESR Service Delivery NMS Governance ACCESS MANAGEMENT REAL TIME DECISIONING CC&BMDM NMS WAM Siebel BPM BAM MWM
  • 29Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Capgemini‟s Customer journeys in Oracle • Social Media monitoring and Churn Management • Focus on new digital channels (social media listening and response) • Shift focus from selling commodity electricity and gas towards energy saving advice and additional services • Retention offers based on the retention budget/customer values • Cross and Upsell additional services and products to existing clients • Inform and update customers about all products and services and is able to sell them • Enhancing the customer service experience • Feature-rich web portal for customer service representatives • Tailored offers and services • Provide Energy Management advice • Real time decision enablement • Sign up for energy alerts services
  • 30Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Agenda  The Emergence of the Digital Utility  Reinventing the Digital Customer Experience  Illustrative CX examples  Oracle CX  Conclusion
  • 31Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 The Key Messages  Your customer’s expectations are changing  Think digital when designing your customer journeys  Digital is not just about customer experience  The Digirati apply an integrated approach to digital  Carefully consider your operating model before embarking  New techniques may be required [that are counter cultural]  Measure, measure, measure
  • 32Copyright © Capgemini 2013. All Rights Reserved Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013 Contact Information Michel van Zutphen Vice President and Global Technology Lead, Digital Utilities Transformation, Capgemini michel.van.zutphen@capgemini.com Jonathan D Loretto Chief Digital Evangelist Digital Services North America Jonathan.Loretto@capgemini.com
  • www.capgemini.com The information contained in this presentation is proprietary. Copyright © 2013 Capgemini. All rights reserved. Rightshore® is a trademark belonging to Capgemini. About Capgemini With more than 125,000 people in 44 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The Group reported 2012 global revenues of EUR 10.3 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience™, and draws on Rightshore®, its worldwide delivery model. Learn more about us at www.capgemini.com.