Utility Week

Why Utilities Need to Make the Digital Transformation

Can utility executives, who are used to planning 5, 10 or 20 years out, learn to move at a faster, digital pace?

By Jason Glickman and Arnaud Leroi

Published on February 19, 2016
min read


This article originally appeared in Utility Week. Can utility executives, who are used to planning 5, 10 or 20 years out, learn to move at a faster, digital pace? We think they must – or risk watching others get between them and their electricity customers. Other industries such as banking, retail and media are already a decade into their industries’ digital transformations. Utilities may be getting a late start, but as digital innovations take root in the electricity sector – with online customer engagement, smart sensors and better use of analytics – they are beginning to adopt and adapt, motivated by a range of forces, including digitally savvy competitors, new regulations, innovative business models and evolving consumer preferences. Utility executives are probing for value and identifying areas where new competitors are starting to take bites out of their business. These executives want to know how digital can strengthen relationships with customers and guard against being disintermediated by new competitors. And they want to understand where technology can help them improve operations and develop top line opportunities, including new products and services. Bain & Company research identifies three areas where digital technologies are showing potential. Customer engagement Mobile, social and web interfaces create opportunities for closer communication with customers and for new products and services. Customers get a better view of their energy use and can manage it more effectively. Utilities get a more detailed perspective on how customers use electricity, allowing them to create more tailored rate plans. European energy retailers were among the first to identify these new models, with companies such as NEM in the Netherlands and Lampiris in Belgium and France developing pure online commercial models that provided a lower-cost way to serve customers. In the southeastern US, Entergy launched a service in 2009 allowing customers to text them to report an outage, a service that has helped improve Entergy’s customer satisfaction scores. Read the full article at Utility Week. Jason Glickman and Arnaud Leroi are partners at Bain’s Global Utilities practice.

This article originally appeared in Utility Week.

Can utility executives, who are used to planning 5, 10 or 20 years out, learn to move at a faster, digital pace? We think they must – or risk watching others get between them and their electricity customers.

Other industries such as banking, retail and media are already a decade into their industries’ digital transformations. Utilities may be getting a late start, but as digital innovations take root in the electricity sector – with online customer engagement, smart sensors and better use of analytics – they are beginning to adopt and adapt, motivated by a range of forces, including digitally savvy competitors, new regulations, innovative business models and evolving consumer preferences.

Utility executives are probing for value and identifying areas where new competitors are starting to take bites out of their business. These executives want to know how digital can strengthen relationships with customers and guard against being disintermediated by new competitors. And they want to understand where technology can help them improve operations and develop top line opportunities, including new products and services. Bain & Company research identifies three areas where digital technologies are showing potential.

Customer engagement

Mobile, social and web interfaces create opportunities for closer communication with customers and for new products and services. Customers get a better view of their energy use and can manage it more effectively. Utilities get a more detailed perspective on how customers use electricity, allowing them to create more tailored rate plans.

European energy retailers were among the first to identify these new models, with companies such as NEM in the Netherlands and Lampiris in Belgium and France developing pure online commercial models that provided a lower-cost way to serve customers. In the southeastern US, Entergy launched a service in 2009 allowing customers to text them to report an outage, a service that has helped improve Entergy’s customer satisfaction scores.

Read the full article at Utility Week.

Jason Glickman and Arnaud Leroi are partners at Bain’s Global Utilities practice.