Expert view: Adapt and thrive

Utility Week asks Fergal Burke, senior sales director, Oracle Utilities EMEA, about the changing UK energy landscape.

What is the biggest challenge facing UK utilities this year?

Utility retailers in the UK continue to struggle to find a balance between increasing customer demands and dissatisfaction with needing to greatly reduce their operational costs.

When you factor in the upcoming implementation of a price cap in the UK, some utilities will find it challenging to thrive – or survive – without finding symmetry between the two. Retailers need a next-generation technology platform to not only address the challenges of today but to prepare for the challenges of tomorrow.

For example, with the rise of new distributed energy sources, such as solar, customers are becoming both consumers and producers of energy. This means distribution is no longer a linear equation and consumers will have much more control of their energy footprint. So whether they are trying to improve operational efficiency or leverage data to deliver better service and engage customers, many retailers today remain hamstrung by their current outdated technology, which makes it difficult, if not impossible, to move toward the customer-centric grid model of the future.

How can utilities improve the public’s perception of them?

Many would think lower prices is the panacea for a struggling UK utility retailer, but pricing is not the number one factor in how customers view their utilities.

Customers want to feel valued, and the best way for retailers to address this with their customers is through personalised communications, as well as reliability and safety of service. Retailers must continue to provide operational transparency in their businesses and tailor their communications to each individual customer. And as the energy business continues to evolve, customers will be looking to their utility to provide them with more services that add value to their lives – be it set pricing for a particular outcome, to working with them to give special pricing or incentives to charge their electric vehicle at non-peak times. Retailers can become that trusted adviser in this new energy journey, but the window to seize that opportunity is shrinking and they need to act quickly.

How can utilities rebuild trust?

An Accenture survey showed that more than 80 per cent of customers want to see their energy retailer as this trusted adviser, with the retailer providing the latest technologies, easy-to-understand pricing and advice on how to save energy.

The easiest way for retailers to move from vendor to trusted adviser is to personalise their services and communications at the individual customer level. For example, what can they tell you about your individual household and how to tailor your day to both reduce your energy footprint and costs leveraging your home appliances – an electric car, smart thermostat, washer and dryer, etc. This is the value customers will be looking for moving forward.

How should utilities be using technology to increase customer engagement?

Historically, UK utility retailers have had to focus their IT spend on systems of record, usually maintenance, integration costs, and routine tasks. Moving forward to meet rising customer expectations, retailers will need to shift their IT spend from these systems of record to systems of innovation. These systems will need to securely leverage the vast amounts of customer data being generated in today’s growing smart meter world, and yield near-real-time, personalised interactions with customers.

How are utilities coping with a demanding political and regulatory environment?

Retailers need to cope with increasingly demanding political and regulatory environments through operational efficiency and transparency. With robust, scalable systems of innovation and systems of record, retailers can provide the business intelligence and reporting necessary to meet growing political needs and increasing regulatory compliance mandates, alongside increasing customer demands. This path for retailers is best traveled by strategic investments in scalable, cost-effective billing, reporting and analytics, and customer engagement platforms.