7 ways utilities can build a digital future that’s better than normal

Annually, we meet face to face with client executives to get their views on the trends affecting their organizations and industries. This year, we met with 1,447 business and IT leaders, of which 97 were in the electricity, water and waste management, and downstream gas sectors. These conversations were held before and after the pandemic declaration, providing unique insights into evolving priorities. We summarize the findings from these discussions on our CGI Voice of Our Clients page.

In response to the pandemic, utilities proved they could speed up both the adoption and application of new technologies. They now must reinvent ways of working to harden those temporary measures and adapt to new realities. In this blog, I offer recommendations to help utilities build a digital future that’s better than the old normal.

1. Increase business agility to drive innovation that meets customer needs

Improving agility is a top IT priority for utilities this year, but legacy systems and the people aspects of change are hindering their progress. Interestingly, 29% of digital leaders across all industries who say they have highly agile business models also say they are producing results from digital strategies. The relationship is clear: an agile organization drives digital results across the enterprise—proving that agile business models require much more than new technologies. Approaches must encompass the needs of both end customers and internal users. 

2. Accelerate your digital journey with a clear roadmap

Only a fraction of the utilities executives we interviewed say they have implemented their digital strategy across the enterprise and just 10% say they are producing results from digital strategies. Many have disparate digital strategies without a clear line of sight to business imperatives. What’s needed is an end-to-end roadmap for their digital journey that guides their teams, investments and suppliers toward this future vision. Also imperative is measuring the ROI of all investments against this digital roadmap. Additionally, many in the industry require a structured measurement and reporting process that takes into account stakeholders’ interests and includes a holistic view of their data.

3. Bake cybersecurity into everything you do

Cybersecurity is among the top trends, business priorities and IT priorities of utilities this year. The impact of cybersecurity as a trend rose 19% following post-pandemic interviews. Notably, many operational technologies (OTs) are not part of the integrated IT strategy of utilities. Yet, these assets often have open connections with the outside world. Security and privacy need to begin at the design and implementation stages and continue into the operational and support stages. Utilities also must align IT and OT security, reflecting a clear understanding of the risks. The human factor is equally important. Any security practice should include repeated training that combines practical challenges and threat assessments.

4. Capitalize on culture changes and new ways of working already underway

Paradoxically, the pandemic has shown that, in a crisis, both business and IT can align on common goals, and that agility is not necessarily about structure. Utilities should embrace this change and make it the new “better than” normal practice. Year after year, executives cite culture change and change management as a key blocker to implementing digital strategies. Overcoming these challenges requires a clear “corporate purpose” and a solid culture. Digital leaders invest heavily in their people and working environment. They also are more likely to use collaboration capabilities to respond to challenges and innovation management to reinvent at pace and scale.

5. Unlock valuable insights from disparate data

Harnessing the power of data continues to be among utilities’ top business and IT priorities. Competing successfully requires operational excellence in managing the valuable legacy business and faster delivery of profitable revenue streams for the energy transition. Most new value propositions require access to operational quality network data in addition to customer data, especially in the distribution and generation sector. What’s needed is a utility-specific network data model that reflects all assets. This model should be coupled with tools and processes to validate, verify and correct data as required. The result is a proper foundation on which to layer new business applications that integrate technologies like intelligent automation, data analytics and artificial intelligence.

6. Maximize ROI from innovation investment

Only 10% of utilities executives rate their satisfaction with innovation investment ROI as high. A major challenge in an increasingly competitive market is building strong innovation capabilities while achieving the agility to get proofs-of-concept out of the lab and into the business. Utilities need proven ways to improve innovation ROI. Ensuring innovation provides sustained results at scale and is aligned with the roadmap requires establishing clear KPIs. Also needed is a proven framework to ensure those KPIs are measured and tracked, with regular reviews at all levels of the organization. Utilities also must invest in employee skills to drive innovation as a team.

7. Create a more resilient technology supply chain

The pandemic crisis gave many utilities a taste of working in more agile and elastic ways, but also exposed the fragility and dependency of the vendor and technology ecosystem. Utilities will need to reinvent their technology supply chains to be more resilient and support new value chains. As a result, they should accelerate their pre-pandemic plans of integrating core systems with front-end channels. They also should move toward greater adoption of automation, chatbots and AI to improve the customer experience at a lower cost. In addition, they can turn to more managed services to achieve cost savings, free up resources and improve business agility.

Utilities have a great opportunity to build upon the innovative and collaborative progress already achieved in response to the pandemic. Get in touch to learn more about our 2020 insights for utilities, as well as our knowledge base from five years of interviews, representing more than one million answers across industries and geographies.