digital transformation in the energy industry · white paper \ utilities digital transformation \\...

$: Digital Transformation in the Energy Industry · White Paper \ Utilities Digital Transformation \\ March 2012 3 Executive Summary Energy companies are facing a time of accelerated$
Improving the customer experience, customer retention and reducing the cost to serve through digital transformation

Digital Transformation in

the Energy Industry

March 2012

© SMS Management & Technology

White Paper \ Utilities Digital Transformation \\ March 2012 2

Contents

1. Introduction 5

2. Customer Values, Expectations and Behaviours 6

3. Digital Transformation: Leading Utilities Examples 8

3.1. Leading Practice Examples 8

3.1.1. Self Service & Mobility 8

3.1.2. Social Media 10

3.1.3. Design and Navigation 10

3.1.4. Information Services 11

3.1.5. Do top ranked websites translate to improved customer satisfaction? 12

4. Critical Success Factors: Framework and Principles 14

4.1. Transformation Framework for Implementation 14

4.2. Guiding principles 15

4.2.1. Understand Customer Behaviours and Entice Changes 15

4.2.2. Balancing the Customer Interface with Internal Operations 15

4.2.2.1. Technology 17

4.2.2.2. Processes 17

4.2.2.3. People 17

4.2.3. Matching Ambition with Capability 18

4.3. Readiness Reviews 19

5. Why Engage SMS 20

6. Recommendations 21

Appendix 22

I. About SMS 22

II. Strategic Partnerships 23

III. Further Information 24


Executive Summary

Energy companies are facing a time of accelerated change: changing customer expectations and

behaviours regarding service and value, increased competition from existing and emerging energy

players, increased regulatory oversight particularly around pricing and underlying costs, legislative

changes around carbon management and increased stakeholder engagement. As part of their

response to these changes, most energy companies are working to differentiate and improve their

customer experience and deliver an effective online experience for customers. Given the number of

companies that have had false starts in this area and the rapid changes in customer behaviour

(e.g. social media) and technology, most companies are looking for advice on how to successfully

implement their digital transformation.

In response to this need, SMS completed a three stage review of selected global and Australian

energy companies‟ digital transformations and also reviewed leading practice transformation

approaches based on our experience working with major listed and government organisations in

Australia and Asia over the past 25 years.

Firstly, we reviewed twelve global and Australian Utilities company websites to assess

performance, usability and customer satisfaction. Secondly we sourced international benchmarking

studies to further assess performance. Thirdly, we have presented how the successful

transformation program methodology that SMS has developed and applied over 25 years should

be successfully applied in the evolving online environment.

We found that global energy companies are making some progress in implementation of their

digital transformation programs. Many are making good progress in providing features and usability

required by customers. A number are recognising the importance of mobile internet and social

media. US utilities companies are less mature in being able to link website performance with

overall customer satisfaction and net promoter scores. This means that many are not achieving

their targeted customer and business benefits despite investing in digital transformations.

To reflect the accelerating changes in customer values and expectations, the specific requirements

of the energy sectors and the changes in online technology environment, we believe that the

successful digital transformation framework needs to incorporate the following four stages:

Figure 1: Four stages combine the delivery of successful digital transformation programs1

While implementing these four stages, our review has identified the importance of applying three

principles throughout the program:

1 SMS Management & Technology: Customer Facing Technology, Apr 11


Understand customers‟ changing expectations and develop and implement tactics to entice

customers to change their behaviour

Be aware of the impact of both internal operations and external customer touch points on the

customer experience and address both in an integrated plan

Match your ambition with your capability when developing, assessing and implementing a

digital transformation program

Based on our review and experience with assisting major utilities and ASX100 companies complete

successful transformation programs, SMS makes six recommendations that are designed to

strengthen energy utilities digital transformation programs and better manage risk.

1 Customer facing interface and design must be anchored around customer needs and

expectations and the design anticipates future customer behaviour and access choices

(particularly mobility and social media)

2 The transformation program should adopt and rigorously apply the four transformation

stages: Strategy, Customer Experience, Development and Operations

3 Ensure deep understanding of customer behaviour and how to entice customers to change

their behaviour to ensure achievement of business targets

4 Tight and reliable integration of the customer interface with enterprise core systems,

processes and staff to make these new applications and experiences work

5 Organisations need to assess and match their digital transformation ambitions with their

capability

6 To assess the readiness of the organisation to undertake its proposed transformation

program and to assess progress and risk status, SMS recommends that energy companies

undertake a readiness assessment and periodic health checks of their program (details

under page 19, 4.3 Readiness Reviews)

For enquiries regarding this white paper, including where SMS can assist you to successfully

implement your digital transformation program, please contact the author or your Account Director:

Sue O’Connor

Industry Director Utilities

SMS Management & Technology


1. Introduction

Energy companies are in a time of significant change which presents both opportunities and

threats. These changes include:

Changing customer expectations and behaviours on how they engage and what they value

from their utilities service providers

Significant increases in energy prices which is leading some consumer segments to be much

more actively engaged in assessing their energy suppliers and energy usage

Increased regulatory scrutiny of pricing models which is significantly increasing the focus on

reducing the cost to serve customers

Increased competition from both incumbent and emerging energy retailers

Constant technology innovation that presents opportunities for new service delivery models

and new products and services for consumers

These changes are resulting in a number of present and emerging behaviours: increasing churn

rates amongst consumers, increasing service expectations being written into procurement

contracts by business customers, increasing competition from existing and emerging competitors

some of whom have new business models with markedly cheaper cost structures, and increasing

community and government engagement and involvement in energy market policy.

To thrive in this new world, companies need to simultaneously respond to changing customer

expectations and to differentiate themselves in the markets to provide higher perceived customer

value. At the same time there is the need to find the right balance between investing in projects to

attract and retain customers, while simultaneously reducing their cost to serve.

To respond to this environment, many energy companies are now looking to transform their digital

customer channels for their customers. How successfully they are achieving their goals depends

on their strategic market position, their understanding of their customers and what they value, an

understanding of the evolving service solutions including social media and whether they adopt

leading practice models for their digital transformation program.

SMS completed a three part review of selected global and Australian energy company‟s digital

transformations and assessed what needs to be included in transformation programs to

successfully implement these programs. Firstly, we reviewed twelve global and Australian Utilities

websites to assess performance, usability and customer satisfaction. Secondly we sourced

international benchmarking studies to further assess performance. Finally we reviewed the

successful transformation program methodology that SMS has developed and applied over 25

years of involvement with Australian and Asian customers. We identified which parts of this

framework should be applied to digital transformations and what additional actions should be

adopted to reflect the customer experience, organisational and technology requirements of the

digital environment.


2. Customer Values, Expectations and Behaviours

Until about three years ago, utilities relied almost entirely upon their retail outlets, contact centres

and advertising as the primary channels to engage customers. Company websites were used

primarily as a relatively static one way information source.

Using their digital devices, and surrounded by fast networks, many customer groups now show a

preference to interact with organisations including utilities in a multitude of ways. When Australians

need information about a product, or to find out what others think about it, or to tell others about it,

they now prefer to use their computers and smart devices first.

Figure 2: Customer engagement preferences by media type2

There has been a big shift in how customers are accessing the internet. The rapid increase in

market penetration of smart devices and social media has been dramatic and mobile devices are

expected to surpass desktop access in the next three to five years.

Figure 3: Mobile internet access will pass desktop access3

2 The Nielsen Company: The Australian Internet and Technology Report, Edition 12., Feb 10

3 ibid

http://gigaom.files.wordpress.com/2010/04/mobile-chart2.png

http://gigaom.files.wordpress.com/2010/04/mobile-chart2.png


Customers are now using the internet for a wide range of purposes: information, social networking

and conducting transactions. Online Banking is the most regularly used internet function according

to The Australian Internet and Technology Report. Bill payment is a close second.

Figure 4: Use of interactive features online4

Different industries have responded differently to this change in customer behaviour. The Banking

and Finance industry has been particularly forward thinking in their approach to online services.

They have also invested heavily in understanding customer needs and preferences in order to

improve customer engagement. Another key feature in terms of investment, the banking industry

focuses on continuous improvement and innovation towards the development of solutions.

An Australian example for the Banking and Finance industry adaption to changing customer

behaviour is the heavily promoted ANZ‟s goMoney. SMS project managed this development and

implementation.

Figure 4: Use of interactive features online5

4 The Nielsen company: The Australian Internet and Technology Report, Edition 12, Feb 10

5 ANZ website: http://www.anz.com/gomoney, Nov 11

76%

71%

59%

51%

45%

39%

37%

31%

31%

31%

29%

28%

27%

23%

8%

9%

15%

22%

23%

32%

33%

29%

24%

34%

27%

27%

26%

31%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Banking

Bill payment

News sport or weather updates

Maps or directions

Online social networking

Airline ticket purchase

Accommodation bookings

Auctions

Subscribe to email newsletters

Submit information to government

Local or community information

Payment for government services

Education or study sites

Health and medicine sites

Use regularly

Used, but not regularly


3. Digital Transformation: Leading Utilities Examples

In the past, the biggest use of technology has been “enterprise focused”. By this, we mean that the

technology was commissioned to enhance the enterprise through more efficient processes. If the

technology made the enterprise more efficient, the project was a success. More recently, an

increasing share of technology is intended to be used by customers instead of staff.

Enterprises compete for the most engaging customer experience by building the best application

and interfaces to connect customers directly with enterprise core systems.

3.1. Leading Practice Examples

Improving customer engagement at the customer interface layer means more:

a. Dynamic navigation

b. Customised and personalised content

c. Social media

d. Targeted promotion and

e. Web 2.0 services

Energy industry leaders, as well as some smaller utility companies, have invested in developing

these features to provide an engaging and valuable user experience.

3.1.1. Self Service & Mobility

A new product or service promotion on a website, with detailed information and the ability to

purchase, is a good use of customer facing technology. This option makes the experience of

choosing and buying products easier, supports the increasingly popular self-service approach and

reduces the cost of sale.

This experience will change customer behaviour, because customers who have used this

technology are more informed about which products suit their needs. These newly informed

customers are more likely to buy from an enterprise which has engaged their interest.

British Gas is a good example of a utility behemoth starting to unravel the potential of self-service

via digital channels. Amongst its online services, customers can:

Check account balances online

Submit meter readings electronically

Access and edit account information such as contact details

Make a payment online

Inform British Gas of a home move

Find information on energy saving and other products & services


Figure 5: British Gas website promoting repair services and boiler installations6

The latest addition to the British Gas eCommerce capability is an iPhone app enabling customers

to send meter readings, view online accounts, and view energy usage. Mobile and digital have

been integrated into the British Gas core customer service framework.

Figure 6: The user friendly British Gas mobile App7.

6 British Gas website: http://www.britishgas.co.uk, Nov 11

7 ibid


3.1.2. Social Media

Social networking is one aspect of the online experience that has evolved in terms of utility website

capability and service offering. In a 2011 review of 100 North American electric and gas company

websites, 43 included links to social media sites on their home pages.

The review, conducted by the independent utilities research, advisory and information services

organisation E Source, assessed the websites between December 2010 and April 2011. A team of

residential customers accessed and used the top 29 web and mobiles features (both informational

and self-service tasks) as identified by E Source market research.

"Social networking now accounts for the highest percentage of online activities," says Stephanie

Spalding, E Source research manager and report co-author. "Utilities are responding by listening to

and communicating with their customers in that space. Including links to social media sites is one

of the most prominent additions to utility websites since our last review - one that was well received

by our reviewers."8

Figure 7: Social networking links feature prominently on the Entergy home page9

Entergy is the second-largest nuclear generator in the United States, delivering electricity to 2.7

million utility customers in Arkansas, Louisiana, Mississippi, New Orleans and Texas. The Entergy

website was ranked Number 3 of the top 100 utility websites benchmarked by E Source. Features

links to Facebook, Twitter, YouTube, Flickr and an RSS feed option.

3.1.3. Design and Navigation

In September 2009, AGL Energy relaunched its website with design focused on helping customers

and other users locate information and transact online more quickly and easily.

8 E Source Announces Top Utility websites:

http://www.prnewswire.com/news-releases/e-source-announces-top-utility-websites-128263383.html, Nov 11 9 Entergy website: http://www.entergy.com, Nov 11


AGL General Manager Marketing, David Hamilton said “Our customers told us they wanted easier

navigation and simplicity in managing core online functions – so we have reorganised core content

to suit their need.”

“This involved sophisticated analytics tools, reducing the steps to locating information and moving

popular pages to the forefront on the homepage.”

The new navigation carried throughout the entire site, means visitors can access information

around joining AGL, moving home, booking a tradesperson and make account enquiries, wherever

they are on the site. The layout of AGL‟s Energy Plans page has also been redefined to make it

easier for people to choose the plan that‟s right for them.10

Figure 8: The AGL site clearly delivers and promotes useful online services11

The AGL website redesign delivers:

Dynamic navigation that supports direct access as well as browsing

Clear and simple page designs

Good use of promotional space to create awareness of services

3.1.4. Information Services

Meaningful content that is kept up-to-date and provides valuable information to potential or existing

customers adds significant value to any website. For example, advice on energy saving products

and cost saving measures that can be taken around the home in order to reduce monthly bills and

our impact on the environment are powerful tools for engaging the customer.

10 AGL Revamps website: http://www.agl.com.au/about/media/Pages/AGL-revamps-website.aspx, Nov 11

11 AGL website: http://www.agl.com.au/, Nov 11


The US energy company Avista provides a great deal of useful information, including a suite of

options for understanding and saving energy usage. The customised „Online Home Energy

Analyser‟ can „perform a free home energy analysis and help you get the most out of your energy

dollars‟.

Figure 9: The WPS site delivers content that adds real value12

3.1.5. Do top ranked websites translate to improved customer satisfaction?

According to the previously mentioned 2011 E Source review, Wisconsin Public Service (WPS) has

the top rated US utility organisation website. Although the home page does not contain a single

social media link, what the site does offer includes useful online services enabling meaningful

customer interaction, clear and simple navigation, good content and targeted promotions.

However, having the best website does not necessarily mean delivery of the best overall customer

experience. The American Customer Satisfaction Index (ACSI) is a national economic indicator of

customer evaluations of the quality of products and services available to household consumers in

the United States. Data from interviews with approximately 70,000 customers annually are used as

inputs into an econometric model to measure satisfaction with more than 225 companies in 47

industries and 10 economic sectors, along with over 200 services, programs, and websites of

approximately 130 federal government agencies. According to ACSI scores, WPS does not rank in

the Top 30 energy companies in the United States.13

In fact, none of the Top 10 companies as ranked by ACSI, appear in the E Source Top 10 listing,

with the first cross over appearing at Number 11 (Dominion Resources – its website is ranked

Number 10!).

12 Avista Utilities website: http://www.avistautilities.com/residential/Pages/default.aspx, Nov 11

13 American Customer Satisfaction Index:

http://www.theacsi.org/index.php?option=com_content&view=article&id=149&catid=&Itemid=214&c=FirstEnergy+&i=Investo

r-Owned+Utilities, Nov 11


In order to deliver excellent customer service, even the most appealing customer interface must be

supported by efficient processes, helpful staff and well integrated supporting technologies.

Figure 10: The WPS website was ranked #1 in a recent review of the top 100 utilities sites14

14 Wisconsin Public Service website: www.wisconsinpublicservice.com, Nov 11


4. Critical Success Factors: Framework and Principles

To be successful, the planning, development and implementation must follow a simple four-staged

approach (framework) and constantly reference four critical success factors:

1. Adopt a leading practice transformation framework that reflects the particular requirements on

the online environment and changing customer expectations

2. To ensure the delivery of new online services or changes to an interface will convince

customers to change their behaviour, the business therefore must understand the customer

3. To make these new applications and experiences work, the customer interface needs to be

tightly and reliably integrated with enterprise core systems, processes and staff

4. Assess whether the delivery ambition matches or is aligned with the organisation‟s capability

and what is needed to uplift that capability

4.1. Transformation Framework for Implementation

To reflect the customer experience, organisational and technology requirements of the online

environment, we have outlined how the successful transformation program methodology that SMS

has developed and applied over 25 years of involvement with Australian and Asian customers

should be successfully applied in the evolving online environment.

To implement a customer experience transformation in an organisation, SMS recommends that the

organisations follow the SMS Digital transformation Framework which encompasses: Strategy,

Customer Experience, Solution Development and Operations Management.

SMS‟s practices cover all four elements, which means the whole project is delivered through a

single process.

Figure 11: Four stages combined to deliver a successful digital transformation15



4.2. Guiding Principles

The following guiding principles should be incorporated to deliver successful digital transformation

programs.

4.2.1. Understand Customer Behaviours and Entice Changes

There was a time when customers could be coerced into changing their behaviour with “take it or

leave it” contracts or confusing product ranges. Deregulation, competition and the reversal of

information asymmetry in the customer‟s favour, has given customers choice.

Choice means that customers need to be enticed into changing their behaviour. Customers will

only choose, use, and be influenced by a customer facing technology that captures their attention

and gives them value.

Figure 13: Technology must create value to change customer behaviour16

Value, and the degree of value, is the difference between the pain and gain the customer believes

they will experience while using a technology. The more value created by a technology, the more

inclined customers are to change their behaviour by using it, the more likely the business is to get a

return on its investment.

Any online strategy or business case that is based on assumptions of change in customer

behaviour must invest time and resources into understanding and delivering what customers value.

4.2.2. Balancing the Customer Interface with Internal Operations

When an enterprise is aiming to increase customer retention through improved customer

experience, the focus of improvement is not only on the front end customer touch points and

customer facing interfaces, but also on the enterprise processes and structures invisible to the

customer. In fact, the internal operations play such an important part in serving the customer that

SMS recommends putting 70% of all efforts in becoming a customer centric enterprise into internal

operations of the enterprise.


To change customer behaviour, technology must create value

Pain(The value of the things that a customer

needs to give to get a service)

Gain(The value a customer believes they will

get from using a service)

Attractive concepts

Valuable features

Usable interfaces

Mental Effort

Cost

Time

Physical Effort

Customer’s perception of value


Figure 14: The 70/30 ratio on customer experience transformations 17

The weighting depicted in the diagram above arises from the number of elements that need to be

considered to ensure that the promise made through enticing customer facing technology is

supported by systems and processes at all customer touch points. Depending upon the

enterprise‟s IT systems maturity and interoperability, the level of work required on the back end will

vary. In SMS‟ experience, danger arises when this analysis is underestimated and appropriate

planning and design is not factored into back end support systems. The table below outlines all the

elements that need to be assessed in conjunction with the customer facing factors.

Figure 15: Technology, Processes, People requirements overview on Customer Experience Transformations

18

17 SMS Management and Technology, Oct 2011

18 ibid


4.2.2.1. Technology

To implement new customer facing applications and technology integrated into the backend, the

backend core systems must be robust and be able to carry additional transactions and have the

capabilities to deliver the required outcomes.

Single views of customers, customer data management and quality are critical in becoming a

customer centric enterprise. Duplicate customer accounts, out of date or even missing customer

information will work against the best customer centric intentions. Accurate customer data and a

single customer view is also the input for all customer analytics and reporting.

Having the capacity to integrate new technologies to existing backend systems is essential in the

age of Social Media and one on one customer communications, if you would like to make the

customer engagement with your organisation truly relevant.

A content management system (CMS) manages the collaborative content of an enterprise and web

portal. Content may include product offerings, news releases or customer communications. A CMS

may also provide tools for one-to-one marketing, communications or channel management. It also

has the potential to tailor a web portal‟s content and advertising to a user's specific characteristics

using information provided by the user or gathered by the site.

4.2.2.2. Processes

When transforming to a customer centric enterprise, efficient and effective processes are the

starting point. Nowadays improved efficiency is often not enough to delight customers. They

already expect their issues to be dealt with in a timely and trusted manner. However, inefficiency

can lead to customer dissatisfaction. An annual survey conducted last year points to a dramatic

change in consumer behaviour: 80% of consumers will never go back to an organization or

company after a negative experience, up from 68% in the previous year19

. The cumulative effect of

bad customer experiences can cause significant and lasting brand damage.

If business process management is done well, it ensures a positive and consistent customer

experience across all channels. Customer experience solutions address the cross-channel (contact

centre, Internet, self service, mobile devices, brick and mortar stores), cross-touch point (phone,

chat, email, Web, in-person), and cross-lifecycle (ordering, fulfilment, billing, support, etc.) nature of

the customer experience process.

Optimized processes also allow the organisation to create real time information and become truly

proactive. Cross and up sales opportunities, reduced cost of sales, and reduced customer handling

costs are just some potential results of well managed processes.

When transforming to a customer centric organisation, overall governance of all customer

experience impacting technology, process, and people needs to be in place. This includes portal,

data and processes governance to assign roles and responsibilities, measure, analyse and

improve the quality of the overall program and setting objectives ensures future improvement.

4.2.2.3. People

People make the wheel move. Employees who are excited about their products and believe in their

company will pass on their excitement to the customers. Staff morale can be an indicator of an

organization's progress towards developing a customer centric culture.

19 source: www.ebiz.net, Nov 11


Training plays a key part in not only teaching the staff in how to use the new tools and processes,

but also changing an organisation‟s culture to put the customer in the centre.

Becoming customer centric is not only a matter of implementing a new solution, but also shifting

staff‟s behaviour. Therefore it is important that professional change management is involved early

in the project to avoid potential miss perceptions and minimize employees‟ resistance to change,

reduce fear and get their buy in and excitement to what is coming.

To measure transformation success, clear objectives must be defined, analysed, and measured to

ensure the program is performing against its objectives.

4.2.3. Matching Ambition with Capability

Developing clarity about the future is an important initial first step. However, that ambition must be

matched with the capability of the organisation to deliver that vision. Often organisations will jump

into action planning around a vision without first assessing if the ambition matches or is aligned

with the organisation‟s capability. A structured assessment of all the elements in an digital

transformation plan enables to plot its current position on the grid below and therefore determine

how far from the “zone of effective intent” they are. Once this is known and acknowledged, the

enterprise can chart a course to ensure the capability matches the ambition. Depending upon the

degree of change required, there may be a significant amount of preparatory work required in

terms of acquiring the necessary skills, infrastructure, leadership support, capital etc. before any

serious planning can commence.

Figure 16: The Ambition vs. Capability Maturity Matrix20

20 Corpus Rios (Christopher Tipler), published 2010


4.3. Readiness Reviews

To maximise the business and customer outcomes from an organisation‟s digital transformation

program to better manage risk, SMS recommends that organisations should regularly assess their

readiness and progress using a structured review process.

Readiness Overview

Check points Examples

Knowing what winning looks like

Knowing what your business should be able to do in 2016 Knowing what your customers should be able to do in 2016 Being clear about differentiation from major competitors

Knowing who your customers are

Single customer view Up-to-date customer segmentation End-to-end customer communication

Understanding the customer needs

Knowing what your customers want now Understanding why customers are churning Understanding customers' experience value chain

Having clear business objectives

Clearly defined business KPIs (e.g. decreased cost of sales, increased customer retention) Transformation roadmap to address those KPIs Measurement and control functions to ensure the KPIs are being met

Having a strategy and a roadmap

Short term and long term strategy in place Initiative roadmap determined with prioritized projects Focus on early ROI with roadmap to future

Having the business case approved

All financials sorted, approved and allocated Project sponsor in place Steering Committee decided

Determined the transformation governance structure

Knowing transformation roles and responsibilities Having a professional Change Management team in place Knowing the scope and impact to the business

Professional Project and Program Management

Engaging a partner who has proven experience in managing digital transformations Securing in house project resources to be available for the transformation Having a thorough project and resource plan in place

Ensuring IT readiness Ensuring a match between your IT capability and your online and digital transformation aspirations Having a robust IT infrastructure to allow integration of new applications

Ensure Operational Readiness

Organisational design, processes and skills are appropriate Level of integration with existing customer sales and service structures has been agreed and is implemented Lean and effective business processes in place Effective change management program in place


5. Why Engage SMS

SMS has successfully assisted organisations to complete successful transformations for over 25

years. These programs have required significant changes in customer behaviour, organisational

change and technology understanding and implementation capability. We have been able to

achieve these outcomes because of:

Energy Industry experience and expertise

We understand the energy industry drivers and regulatory requirements that need to be

incorporated into a successful energy company digital transformation. We can do this

because 12% of our 1,700+ consultants have utilities expertise with energy clients across the

value chain from generation to distribution to retail.

We have deep expertise in the existing and emerging digital transformation and CRM

technologies

We have global and niche technology partners such as Oracle, IBM and Salesforce, who

recognise SMS as a leading implementation partner. These partnerships have been proven

and tested in previous client engagements. Our vendor independence also means that we

recommend the solution that best fits the clients‟ needs. Our vendor partners are listed in the

Appendix.

End to end capability

Successful digital transformations require an integrated end to end program. SMS‟ practices

cover all four stages of an Organisations Digital transformation journey. We have assisted

clients in a number of ways including taking on responsibility for delivery of outcomes and

capability, program readiness reviews and health checks, strategy advice and business plan

development.

Figure 18: SMS capabilities in a digital transformation21

21 SMS Management and Technology: Nov 11


6. Recommendations

Changing customer behaviours and expectations in evolving market environments means that

energy utilities are looking to transform their online customer experience to assist in the

achievement of improved customer retention and growth, improved stakeholder and community

engagement and a reduced cost to serve customers. Based on our review and experience with

assisting major utilities and ASX100 companies completing successful transformation programs,

SMS makes six recommendations that are designed to strengthen energy utilities digital

transformation programs and better manage risk.

1 Customer facing interface and design must be anchored around customer needs and

expectations and the design anticipates future customer behaviour and access choices

(particularly mobility and social media)

2 The transformation program should adopt and rigorously apply the four transformation

stages: Strategy, Customer Experience, Development and Operations

3 Ensure deep understanding of customer behaviour and how to entice customers to change

their behaviour to ensure achievement of business targets

4 To make these new applications and experiences work, the customer interface needs to be

tightly and reliably integrated with enterprise core systems, processes and staff

5 Organisations need to assess and match their digital transformation ambitions with their

capability

6 To assess the readiness of the organisation to undertake its proposed transformation

program and to assess progress and risk status, SMS recommends that energy companies

undertake a readiness assessment and periodic health checks of their program (details

under page 19, 4.3 Readiness Reviews)

SMS is well positioned to assist energy utilities to achieve the challenging customer and business

goals that they have set themselves in their digital transformations. We are able to do this because

of our experience working with major organisations undertaking major customer transformation

programs, track record of improving the end to end customer experience, independence from and

experience in leading and working with all the major technology vendors and a current

understanding of the rapidly changing online world

To maximise the business and customer outcomes from an organisation‟s digital transformation

program to better manage risk, SMS recommends that organisations should regularly assess their

readiness and progress using a structured review process. SMS can advise or assist with this

review process.

If you would like to discuss this white paper further please contact the Author or your Account

Director.

Sue O’Connor

Industry Director

Water & Utilities

SMS Management & Technology


Appendix

I. About SMS

SMS Management & Technology [ASX:SMX] („SMS‟) is Australia‟s largest publicly listed

management and technology services firm.

SMS was founded in 1986 on the basis of three core values; add value, maintain unity and

enhance reputation. More than 25 years on, these values remain central to our business and

characterise our service to Australian and international governments and corporations. Since

inception, SMS has expanded and employs over 1,700 professionals and has offices in Adelaide,

Melbourne, Sydney, Brisbane, Perth, Canberra, Hong Kong, Vietnam and Singapore. SMS Office

Locations:

Renowned for our innovative approach to solving complex business problems, SMS has an

enviable reputation for delivering results that clients can attest to though improved business

performance. Our approach is to:

Provide services that focus on Implementation and Project Delivery

Provide targeted, end-to-end management and technology services

Offer „Delivery Excellence‟ and services designed to improve business performance

Provide the scale of international firms, while operating with flexibility and responsiveness only

seen in local provider

Offer a comprehensive range of services, breadth of resources, intellectual capital,

infrastructure and financial strengths not typically seen in a local firm

Maintain vendor independence, while supporting a client‟s technology preferences

Work collaboratively with our clients to deliver outcomes and practical results

Employing experienced and multi-disciplined professionals working within a culture which

focuses on client success

By engaging SMS, our clients can access knowledge, expertise and energy, with a single-minded

focus on producing results. Our business partnerships extend across major industry sectors and

our clients include multiple government departments, large financial institutions, not-for-profit

organisations and blue chip corporations.


II. Strategic Partnerships

SMS is proud to be an implementation and systems integration partner of some of the world‟s

leading technology companies.

We acknowledge that often great business solutions are driven by great technology partners. We

work with the following organisations to ensure that we can deliver a complete end-to-end solution

in order to meet our client‟s business objectives.


III. Further Information

Sue O’Connor Industry Director Utilities Office: +613 9674 3376 Mobile: +61 418 992 863 Email: [email protected] James Thouas Industry Account Director ICT & Utilities - VIC Office: +613 9674 3363 Mobile: +61 419 335 185

Email: [email protected] Paul Garabedian Account Director - Utilities - NSW Office: +612 9259 8705 Mobile: +61 447 040 011 Email: [email protected] Stewart Hollingdrake Account Director - Utilities - QLD Office: +617 3215 7200 Mobile: +61 404 392 580 Email: [email protected] Benjamin Cowling Account Director - Utilities - SA Office: +618 8343 8423 Mobile: +61 431 641 032 Email: [email protected]

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