the future of utilities

1 SEPTEMBER 2017 UTILITY WEEK

654321

A N E X C L U S I V E R E S E A R C H R E P O R T

THE F U T U R E OF UTILITIES


THE F U T U R E OF UTILITIES654321

In the UK, it is clear that utilities companies of all kinds are mobilising rapidly to better understand this relationship between technology and wider business and industry dynamics. This research, conducted by Utility Week in partnership with Wipro, shows significantly increasing appetite for technological innovation as well as ambition to embrace next generation technologies like artificial intelligence and automation.

It is enormously encouraging to see this determination to use all that technology can offer in order to deliver better value for customers, whether through smarter and more efficient infrastructure or via transformed engagement. There is no doubt that those who can successfully adopt and embed such transformative technologies in the next few years, will be positioned for outperformance and competitive advantage in the longer term future.

Doing this will not be without its difficulties however. Again, this research shows that although companies are ambitious, they are also very aware that legacy cultures and a shortage of appropriate skills could hamper their ability to grasp the opportunities in front of them.

Being aware of these challenges is the first step to overcoming them. And so we hope that this research, commissioned by industry leaders, will help utilities better understand the road ahead. We hope that the findings will spark discussion within the industry and prompt new partnerships which can help companies move forward with clarity and confidence, despite all the uncertainty around them.

Arun Krishnamurthi Senior vice president and global head of utilities, Wipro

In 2015, Wipro partnered with Utility Week to establish the Technology and Innovation Council, a group of utilities leaders with responsibility for innovation and technology strategy in their organisations.

This long term partnership between Utility Week

and Wipro aims to foster collaboration across

the sector, in the face of common challenges

and an environment of fast-paced change.

The Council meets regularly to discuss

current themes influencing organisational

approaches to innovation and technology

adoption that can deliver better customer

value and experience. At dinner debates,

workshops and via bespoke research

projects, the Council facilitates idea

sharing, problem solving and planning for a

disruptive future.

To find out about joining the Council or

attending a Council event, contact Elaine

Munn: [email protected]

FOREWORD

Utilities around the world are moving to adapt to manifold challenges and opportunities, arising from shifting approaches to regulation, environmental pressures, and huge changes in consumer expectations. And as utilities seek to respond to these factors, they are finding that their strategies are deeply intertwined with the march of technological innovation



1 Introduction and methodology

2 Executive summary

3 Customer engagement

4 Skills

5 Technologies

6 Conclusion

CONTENTS


THE F U T U R E OF UTILITIES6543211INTRODUCTION AND METHODOLOGY

As this weight of oversight increases, utilities are also being pressed from the consumer side. Customers and their advocacy groups have become increasingly proactive in holding companies to account, capitalising on an expanding body of resources to track and compare performance on everything from the amount of time it takes for grievances to be addressed, to the amount they are being charged.

Such comparisons are no longer limited to the utilities sector itself. Increasingly, consumers are pitting their energy and water services against those they receive from retail, financial services, broadband and telecoms providers. And equally, players in these spaces have begun to eye utilities provision as an opportunity to expand burgeoning smart and connected homes portfolios.

The upshot is that utilities are not only facing rising service expectations, but also find themselves competing with growing ferocity with the elite of Silicon Valley, vying for the best tech development talent.

In this environment, Utility Week partnered with Wipro to gain a greater understanding of how utilities are responding.

The Future of Utilities research project is a product of that partnership. It focuses on three critical areas which companies told us will define their futures: customer engagement, skills and technology.

By surveying senior leaders from across the UK utilities sector, we sought to uncover how companies will tackle the challenges and opportunities each of these areas pose in the next three to five years, creating a picture of the sector’s immediate strategy for tackling a much larger, long term transformation.

M E T H O D O LO GYThis report is based on both quantitative and qualitative research with senior utilities leaders working in the UK.

In May 2017, Utility Week asked senior individuals with responsibility for innovation and technology adoption in energy and water companies to what extent they viewed customer engagement, skills and new technologies as critical elements within their organisation’s transformation goals in the near term. The survey received 36 responses from job titles including (but not limited to): chief technology officer, chief information officer, director of future networks and head of innovation.

In addition to the insights gained via this survey, Utility Week conducted a wide range of industry interviews to receive qualifying views and observations.

The utilities market is undergoing major change. New regulatory regimes are ramping up the pressure for both the energy and the water sectors to deliver new levels of efficiency and customer value, driven in part by political scrutiny which has reached new heights

“ Customers’ and their advocacy groups have become increasingly proactive in holding companies to account, capitalising on an expanding body of resources to track and compare performance"

NB: Due to rounding, some percentages in charts may not add up to 100.


THE F U T U R E OF UTILITIES654321 2EXECUTIVE SUMMARY

K E Y F I N D I N G S1 Customer engagement will be targeted for

improvement with 81 per cent of respondents saying it will become increasingly important to their organisation in the next three to five years

2 Mobile and consumer technologies (such as apps) are expected to deliver the biggest changes to customer experience in the near-term future while enterprise technologies for handling customer contacts are expected to have less impact

3 There is divided opinion about the extent to which skills shortages will undermine individual company plans to transform their businesses in the next three to five years. 59 per cent are confident their workforce strategy is sufficiently robust to deliver planned activities while around a quarter say it is not.

4 Meanwhile, half of respondents warned that they see a skills crisis developing for the sector as a whole over the next three to five years. Data skills were identified as the most critical and hard to find.

5 On technology adoption, respondents’ views suggested the sector is acting to shake off a reputation for being a technology laggard. Over half characterised their organisation as a “fast follower” in terms of its uptake of emerging technology and 79 per cent said their company’s appetite for new technology has increased in recent years.

6 Customer engagement and asset management were identified as the business areas most likely to be affected by the uptake of new technologies in the next three to five years.

However, commentary also exposed lingering doubts about the extent to which all market participants have truly bought in to the importance of customer engagement with some contributors criticising large energy retailers for perpetuating disengagement among core customer groups. Such claims remain a key point of contention in the energy retail market.

With regards to the availability of skills, and the areas where shortfalls are likely to hit utilities hardest, respondents expressed common concerns about the increasing demand for data specialists, as well as more traditional technician and engineering talent. There was a lack of confidence about the ability of companies, and the sector as a whole to compete for these skills, which are also sought after by parallel sectors which in many cases are seen to offer more appealing career prospects.

From developing formal skills strategies, linked to board level business ambitions, to investing in schemes to improve workplace image, respondents made it clear that actions to avert a skills crisis are being taken seriously.

Finally, on the issue of technology and technology adoption, research participants were clear that the utilities sector is undergoing a process of attitude adjustment. There was a sense that leaders with responsibility for innovation and technology are keen to shake off a sector reputation for being risk averse and slow to embrace the unknown.

They suggested that appetite for adopting new technologies is increasing, with nimble, scalable applications being targeted over and above conventional enterprise-level technologies in the future.

Survey and interview insights left little doubt that customer engagement will be critical to the future of utilities. In practice, this enhanced engagement will take a number of different forms, from using smart meter data to develop tailored utility tariffs to exploiting social media platforms more effectively and strategically to both educate and inform customers

“ From developing formal skills strategies, linked to board level business ambitions, to investing in schemes to improve workplace image, respondents made it clear that actions to avert a skills crisis are being taken seriously.


THE F U T U R E OF UTILITIES654321 2EXECUTIVE SUMMARY

OFUTILITIES

THE

SKILLS SHORTAGES

59%50%

79%

81%

are confident their workforce strategy is sufficiently robust to deliver near-term business plans. Around a quarter say it is not

SKILLS CRISIS

CUSTOMER

TECHNOLOGY ADOPTION

ASSET MANAGEMENTENGAGEM

ENT

developing in for the

sector as a whole over the next three to

five years

Data skills were

identified as the most

critical and hard to find

of respondents warned that they see a

will be targeted for improvement with

of respondents saying it will become increasingly important to their organisation in the next three to five years

say their company’s appetite for new

technology has

increased in recent years.

MOBILE AND

CONSUMER

TECHNOLOGIES

are expected to deliver

the biggest changes to

customer experience in

the near-term future

was identified as the business area most likely to be effected by the uptake of new technologies in the next three to five years.

K E Y F I N D I N G S I N F O G R A P H I C


THE F U T U R E OF UTILITIES654321 3CUSTOMER ENGAGEMENT

Our research showed that respondents are more optimistic about their organisation’s current capabilities for engaging customers than public opinion might suggest.

When asked to assess their organisations' current performance in terms of customer engagement, more than two thirds of respondents indicated they are performing effectively in the area, with 17 per cent identifying themselves as “very effective”.

However, at the other end of the scale, 23 per cent admitted themselves to be ineffective at engaging with their customers.

When presented with these findings, Bill Wilkins, chief information officer at First Utility, suggested that those currently struggling with engagement may be hampered by business models which have historically thrived on disengagement: “It’s become pretty clear that the energy

retail market is divided into two basic categories, the engaged consumers and the disengaged consumers,” said Wilkins, referring to the recognised challenge of influencing the large majority of energy customers using expensive standard tariffs to switch to cheaper deals.

Looking beyond this issue however, responses to the research show customer engagement rising up the agenda for almost all participants in the near future. Asked to identify its strategic importance over the next three to five years, a strong majority of more than 80 per cent indicated that improving customer engagement is “very important”.

When asked which technologies are most likely to deliver improvements in customer engagement in the next three to five years, our survey clearly showed that mobile and consumer technologies such as apps are expected to be most influential.

Pressure is mounting from all angles for utilities of all stripes to improve the way in which they engage with customers. Politicians and regulators are bringing new scrutiny to the issue in the interests of fairness and customer value, customers themselves are becoming more demanding and for canny investors, it has become clear that the customer relationship is the key to sustainable business in an age where data is the new oil

Over two-thirds of respondent believe that their orgnisation effectively engages with its customers, while a quarter state that this is

not currently the case

Innefective Neither/Nor Effective Unimportant Neither/Nor Important

Unimportant Neither/Nor Important Don't know

Over 8 in 10 respondents, however, believe improving customer engagement is important to to their company strategy – all of which class this as very important, with less than a fifth considering this unimportant

Mobile technologies

Utility apps for consumers

Social media

The smart meter rollout

The "internet of things" and connected home technologies

A new customer relationship management system

Effectiveness in engaging with customers Importance in improving customer engagement(over the next 3-5 years)

Importance of factors for improving an organisation’s customer engagement

69% 81%

6% 11% 83%

3%

3%

3%58%

19%

8%

19%

14%

14%

78%

69%

67%

64%

19%

14%

22%

25%

23% 17% 3%8%


THE F U T U R E OF UTILITIES654321 3CUSTOMER ENGAGEMENT

Wilikins said this expectation makes sense and suggested it will see companies which have already made strides in the use of mobile technologies, consolidate their engagement lead.

“We know that customers who use our mobile platform are the most engaged, but they also churn less often and have a higher retention level,” he commented.

Sarah Bentley, chief customer officer at Severn Trent, also observed a general trend, across sectors,

toward using consumer technologies, including social media, to achieve customer engagement goals. Overall, she said this has successfully “accelerated the pace of change” in engagement and will likely remain a core strategy in the near term.

Turning to potential barriers to following through on the appetite to increase engagement, the research identified “inadequate investment in engagement technologies” and “lack of appetite for connected home

EXPERT COMMENTIt’s not surprising that such a high proportion of respondents told us that improving customer engagement is an important strategic issue for their business in the next three to five years. For energy and non-domestic water retailers, clearly this is a direct competitive imperative, but for regulated monopolies too there is growing pressure to engage directly with end users, both from regulators and as a result of trends like decentralisation.

The fact that consumer technologies like mobile, apps and social media are seen as the most important technologies for delivering customer engagement, over and above, industry-specific technologies like smart metering is also not surprising. While smart metering will deliver important new insight into consumption patterns, it is less likely to create a step change in engagement than the ubiquitous consumer tech which is integrated into so many elements of an individual’s everyday life.

It is however, interesting to note that gamification might enhance the ability of smart meters to transform customer engagement, sustaining customers interest in usage data and prompting behaviour changes in a way in which the raw data itself is unlikely to.

“ We know that customers who use our mobile platform are the most engaged, but they also churn less often and have a higher retention level"

Kishor Gowdra General Manager & Head of Solutions, Utilities, Wipro

technologies” as the most significant obstacles, with each identified by 39 per cent of respondents. Also posing a challenge is a “poor sector image” (36 per cent) and “lack of strategic focus on customer engagement” which was named as a barrier by 33 per cent.

Perhaps surprisingly, rules and regulations came out as the least significant obstacle, with just 28 per cent of respondents saying these may disrupt their attempts to improve customer engagement.

THE F U T U R E OF UTILITIES654321 4SKILLS


Survey responses showed that the majority is not concerned that skills shortages will undermine organisational strategy in the next three to five years. Over half (57 per cent) said that their organisation has a robust workforce and skills strategy in place. However, a significant minority, just under a quarter (23 per cent), believed that their organisation is currently underprepared for the impact that skills and workforce renewal challenges may have on business plans.

Furthermore, the negative outlook increased as respondents looked ahead. The research found that 49 per cent believe the utilities sector is facing a skills crisis in the next three to five years against just a fifth of respondents who believe there will be no such

As the utilities sector undergoes the significant changes expected in the coming years, so do the demands and expectations placed on its workforce

A well-documented challenge lies ahead in attracting new talent into the utilities sector to replace outgoing expertise. According to Energy and Utility Skills Group around 20 per cent of the current workforce is set to retire before 2027 and this prospect, combined with the natural job churn which will see some individuals move on to new roles in other sectors, means that UK utilities must recruit 221,000 new employees in the coming decade.

At the same time, the nature of the job roles and skills needed in utilities is shifting. The emphasis is moving away from traditional field jobs (though these will still be needed) and towards roles in technology management and data analysis, say our expert commentators.

This has the effect of pitting utilities against a wider cross section of employers as they compete to attract top talent.

Acknowledging this environment, our research participants offered their take on the short to medium term prospects for workforce and skills strategy in utilities, as well as their views on the importance of this issue in relation to wider organisational goals.

crisis. Around a third said they are unsure what the future holds in this area.

Responding to this concern about approaching skills strains for the sector, David Elliot, group strategy and new markets director at Wessex Water, suggested that worries among utilities leaders may have increased in the wake of the Brexit vote as some companies come to realise that underinvestment in home-grown skills may be coming home to roost.

“Perhaps we haven’t been growing those skills in our home markets as rapidly as we perhaps should have done,” said Elliot, “and I think that’s partly because we’ve been so reliant on skills from Europe.”

When asked which specific skill sets are likely to be hard to come by in the next three to five years, data analysis came out top with more than half (53 per cent) of respondents saying that a shortage of data skills could undermine their ability to fulfil organisational goals in the same timeframe.

Unlikely Neither/Nor Likely Don't know

Data analysis

Engineer level STEM skills

Customer engagement and communication skills

Project management

Technician level STEM skills

Specialist STEM skills

Specific organisation UK energy and utilities sector

Likelihood of shortages in specific areas affecting the organisation’s ability to deliver its strategic objectives

Availability of a robust work-force and skills strategy

within organisation

Level of belief that the sector faces a skills crisis in the

next 3-5 years

Yes Not sure No

57%

20% 31%

38%24%

26%41%

32%

26% 53%38%

35%35%

26%21%

6%

6%6%

23% 20%

21%21%44%38%

26%41%

49%

THE F U T U R E OF UTILITIES654321 4SKILLS


Next on the list were so called STEM (science, technology, engineering and maths) skills for engineer-level jobs. STEM skills shortages at this level were a worry for 38 per cent, compared to 26 per cent and 21 per cent respectively for STEM skills relating to technician level or specialist STEM jobs (such as water quality scientists).

After STEM skills, a shortage of customer engagement and communication skills, along with project management skills ranked joint third as a strategic risk, being identified by 35 per cent of respondents each.

When asked what barriers exist for their organisations as they try to improve workforce and skills resilience in the face of sector change, the most significant obstacle (identified by 50 per cent) was the lack of a formal skills strategy which is aligned to wider organisational goals.

This was followed by a lack of collaboration amongst utilities on

Relatively little faith was expressed in government reforms to the education system – such as the introduction of T Levels – as a means to shift industry skills challenges. Just 38 per cent of respondents thought these reforms will be influential.

For James Robbins, chief information officer at Drax, the key to attracting the right people into IT and tech roles is not just about ensuring workplace technologies are appealing, but also about making work processes dynamic and interesting.

“I think what you’ve got to do is make your workplace somewhere that would encourage people to work with you because I think there is more choice than ever. We’re thinking about what could we do to make the environment itself more attractive to new entrants. We’ve been having discussions about innovation labs and design methodologies.”

EXPERT COMMENTThe level of confidence expressed in workforce and skills strategies are uninspiring. Under 6 in ten believe their organisation has a sufficiently robust workforce and skills strategy to deliver its plans in the next three to five years, and half of respondents see a skills crisis looming over the utilities industry in the same period.

Responses and industry comments show that data analysis is likely to become a particularly stressed area for skills demand – companies should think creatively about how they can work around this challenge, by collaborating to make the utilities sector more attractive to up and coming talent and by formalising skills strategies that are tied to their organisational goals. Another way to alleviate data talent issues is to create long term partnerships with companies who have strengths in this area.

Sarat Chand General Manager, Utilities, Wipro

tackling skills challenges, and the sector’s image in the public sphere. These challenges were recognised by 44 per cent and 41 per cent of respondents in each case.

As for how companies might reverse the risks posed by skills shortages and attract the required levels of new talent, respondents said that the adoption of new technologies in the work environment – such as might appeal to “Generation X” and millennial employees – should be a priority. 71 per cent said this could be a key influence in improving their organisation’s skills outlook, followed by 68 per cent who thought that formalising an organisational skills strategy, which ties into wider business objectives, would be effective.

Other ways to overcome skills challenges were: better marketing of career opportunities (recognised by 62 per cent) and increased collaboration with other utilities firms (56 per cent).

Significance of barriers to improving skills and workforce resilience

Lack of clear skills strategy which is aligned to wider organisational goalsLack of collaboration to address skills gaps with other companies in the energy and utilities sector

Sector image in the public sphereChanges to government funding methods for skills investment

Lack of a government-backed sector skills strategyCompany image in the public sphere

Lack of financial investment

50%44%

41%38%

35%35%

32%


THE F U T U R E OF UTILITIES654321 5TECHNOLOGIES

David Elliot, group strategy and new markets director at Wessex Water, confirmed that this reflects his experience, commenting that the sector has made significant progress in shaking off its reputation for risk aversion. However, he added that it needs to go further if it wants to keep pace with the innovation and technology appetite displayed by other sectors, some of whom may try and muscle-in on the utilities market place.

The utilities sector is still “generally a fairly risk averse sector, undoubtedly,” said Elliot. “But I think its adoption of new technology is going to have to accelerate otherwise it’s not going to achieve the outcomes it needs to achieve.” He warned this might mean todays utilities players becoming “uncompetitive” and “less relevant” to consumers.

Turning to the areas of operations that are most open to being transformed through new technologies, respondents identified asset management as most significant with 85 per cent of respondents saying they expected this business area to be radically transformed by technology in the next three to five years.

The utilities sector is no exception to this, and while the pace of change may have been slower than in other sectors to date, momentum is building. The changes brought on by the increasing penetration of smart meters and other smart devices in customers’ homes, as well as the rollout of connected infrastructure technologies are starting to take hold.

From developing new models for tariffs to enhancing reliability via “self-healing” networks, many utilities are seeking to gain an edge on their rivals by exploiting technology more proactively. But some are moving quicker than others.

In our research, just under a fifth (18 per cent) of the respondents characterised themselves as “first adopters” of technology, ready to take on all the risks associated with emerging innovations in order to also reap the rewards of the successful pioneer.

The bulk, however, are more reserved, with 53 per cent characterising themselves as “fast followers” and around a third (29 per cent) admitting that they tend to wait for technologies to become mainstream before looking for applications in their business.

Undoubtedly however, appetite for adopting new technologies and innovating is increasing. 79 per cent of respondents said their organisation has become more proactive about adopting disruptive new technologies in recent years.

From how we buy and receive our weekly shop to how we get to where we need to go, technological advances are rapidly transforming each and every facet of our lives

Little extent Neither/Nor Good extent Don't know

No change More proactive

Extent to which different business areas will be transformed by new technologies in the next 3-5 years

Organisational approach to the adoption of new technologies

Organisational attitude to the adoption of new technologies

in recent years

First adopter Fast follower

Wait for the technology to become

mainstream

None of the respondents considered their organisation’s attitude to the adoption of new technologies as

becoming less proactive in recent years

Asset management

Customer engagement

Field force operations

Procurement

HR

53%

18% 29%

79%21% 12%6%

12%21%

36%

85%79%

70%55% 3%

3%

3%

39%

3%15%

15%21%

21%

THE F U T U R E OF UTILITIES654321 5TECHNOLOGIES


Customer engagement and field force operations followed as the next in line for disruption while procurement and HR were seen as much less likely to experience radical change as a result of new technologies.

Before such transformations are seen however, survey respondents strongly stressed that low risk appetite must be overcome in their organisations. 75 per cent said that low risk appetite could be a barrier to transformation, suggesting that earlier characterisations of companies as either first movers or fast followers on technology adoption may have been overly optimistic.

Other significant barriers to the adoption of new technologies were identified as lack of innovation funding (66 per cent), procurement processes (50 per cent) and a dearth of innovative ideas from trusted suppliers and third parties (50 per cent).

Regulatory price controls were identified by just 38 per cent of respondents. However given the inclusion of unregulated energy suppliers in the respondent pool, this response rate could still be considered significant.

EXPERT COMMENTThe world around utilities is changing rapidly. It’s therefore a little disappointing to see almost one third of respondents saying they believe their company’s approach to the adoption of new technologies is to wait for them to become mainstream – though it is encouraging to see that organisational appetite for technology adoption is generally increasing.

In terms of the barriers to adoption, while low risk appetite stood out in the survey, it’s notable that respondents identified fairly strongly with a wide set of barriers. This suggests that becoming more innovative and proactive in technology adoption is far from straightforward for utilities. There are many different dimensions to the challenge, from working more closely with third parties to updating procurement processes and tackling funding/incentive issues with the regulators.

We were pleased to see artificial intelligence come out strongly in comments as a technology to watch. Though it was placed behind more established technologies such as cloud computing and the internet of things for its transformative influence in the near term, further investigation showed that AI is exciting industry leaders. It has the potential to transform both infrastructure management and customer engagement, the two business areas identified as ripe for technology disruption.

Ravindra Balija GM & Head of Digital Technologies, Utilities, Wipro

If these barriers can be overcome, research participants said certain technologies have stand out potential to disrupt the sector in the near term.

Leading the way are smart and flexible energy technologies, such as energy storage and demand side response, which 84 per cent anticipate will deliver radical change in the next three to five years.

Next in line was the internet of things and cloud computing, which were both selected by 72 per cent of respondents.

The impact of artificial intelligence, machine to machine learning technologies and robotics were seen as less disruptive in the near term, but interview responses made it clear that the disruptive potential of these technologies over the longer term is extremely significant.

Not highly Neither/Nor Highly

Extent to which technologies are expected to deliver radical transformation for utilities

Key barriers to the adoption of new technology (T2B)

Smart and flexible energy technologiesInternet of thingsCloud computing

Artificial intelligenceMachine to machine learning

Robotics

Low risk appetite

Lack of innovation funding

Lack of innovative ideas from trusted third parties

Procurement practices

Lack of technology demonstration facilities in the UK

Regulatory price control periods

75%

66%

50%

50%

44%

38%

16% 84%3% 25% 72%

6% 22% 72%9% 28% 63%3% 41% 56%

22% 28% 50%


THE F U T U R E OF UTILITIES654321 6 CONCLUSION

However, as new entrants pile into the utilities arena and digital technologies erode the boundaries between utilities and other home services, utilities need to finally tackle their problematic relationship with experimentation and risk taking. A failure to do so will almost certainly result in the intrusion of intermediaries and so called “concierge services” between utilities and consumers, limiting their ability to create or derive value.

A critical element in any utility transformation strategy should be a clear plan for appropriate workforce resourcing and skills. However, this research indicates that this may be a weak spot for the sector. While concern about the potential for skills shortage to undermine company plans in the next three to five years was not overwhelming, it is worrying that 50 per cent of respondents admitted their organisation does not have a formalised workforce and skills strategy which is aligned to their organisational goals. This omission could jeopardise the ability of companies, and the sector, to deliver on transformation ambitions when considered in the light of current workforce data and the increasingly convergence of competition for skills across sectors, focussing on data-

This research shows a recognition that those organisations which can effectively engage with customers will be best positioned for regulatory outperformance and competitive advantage. Meanwhile, there is also a clear expectation that more traditional operations like asset management are in line for disruption as a result of advances in smart, flexible and connected technologies.

A fairly confident understanding was expressed regarding which technologies can help companies with the transformation of customer engagement and asset management in the near to mid-term, particularly in relation to the former where ubiquitous consumer technologies are expected to dominate, while industry specific technologies – like smart meters – take a back seat.

However, while respondents to this research expressed ambition and understanding about the need to transform – especially in relation to customer engagement and asset management – the research also makes it clear that they will face challenges in doing so. Despite respondents reporting increasing appetite for the adoption of cutting edge technologies, they also admitted that risk aversion remains a big barrier to technology-led or -enabled innovation in their organisations.

This is not a new observation. Industry commentators have long identified that risk aversion, linked to the critical nature of utilities services and infrastructure, as well as investor expectations, means utilities tend to be followers of innovation rather than generators of it.

related talent. The prospect of Brexit may also create additional stresses on the availability of appropriate skilled labour to support transformation goals.

Utilities have the opportunity ahead of them to play at the heart of a high value and dynamic future service industry. Connected homes, flexible and demand side enabled networks and decentralised, low carbon generation will radically alter the nature of utility-customer relationships, as well as approaches to infrastructure management.

But before this opportunity can be realised, utilities organisations still need to complete significant cultural and structural reinvention to accommodate the need for bigger risk taking and attract critical skills.

K E Y F I N D I N G S Utilities are aware of the need to transform

Customer engagement and asset management are expected to be disrupted via technological innovation

But risk appetite remains relatively low and is seen as a blocker to the uptake of cutting edge technologies

And a lack of strategic workforce and skills planning could prove problematic for the fulfillment of transformation plans

UK utilities of all kinds are clearly acutely aware of the need to innovate and adopt new technologies in order to respond to the changes taking place around them


w w w . u t i l i t y w e e k . c o . u k

© Faversham House Ltd 2017.

A N E X C L U S I V E R E S E A R C H R E P O R T

THE F U T U R E OF UTILITIES

About Utility WeekUtility Week was launched in 1994 in response to the growing regulatory and market complexity following utility privatisation. For over 20 years Utility Week has been the UK utility sector’s unrivalled thought leader and source of news and comment on the business of Britain’s electricity, gas and water sectors. Utility Week provides authoritative analysis, impartial industry intelligence and insight. It has the trust and respect of utility chiefs, regulators and government.

About Wipro Limited Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) is a leading global information technology, consulting and business process services company. We harness the power of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging technologies to help our clients adapt to the digital world and make them successful. A company recognized globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship, we have over 160,000 dedicated employees serving clients across six continents. Together, we discover ideas and connect the dots to build a better and a bold new future.

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