why operations as-a-service is a need for utilities to ... · solution development of...

Why Operationsas-a-Service is

a need for utilities tobecome Next-gen

An EXL whitepaper

Written by

Sumit TanejaVice [email protected]

An EXL whitepaper

Written by

Naveen MaheshwarySenior Assistant Vice President

1 © 2016 ExlService Holdings, Inc.

[ Operations as-a-Service ]

Ultra-customer centricity will require

business models adapt to take advantage

of four elements:

• Advanced Analytics Big Data, cloud, quantum computing

• Design Thinking Disruptive business model/as-a-Service

• Digital Transformation Uberisation, robotics, cognitive, AI, AR

• Internet of Things (IoT) Sensors in everything

Evolving energy & utilities landscapeThe energy and utility market landscape

is shifting, bringing new challenges and

opportunities.

McKinsey and Company

In any business, it’s

important to keep

up with advancing

technology. It is believed

that data, analytics and

technology will cause

a shift toward ultra-

customer centricity.

The energy and utilities

industry will not be

left unaffected by this

change. Opportunities for

disruption can already

be seen.

Let’s face it: business models are less durable than they used to be. But now, business models are subject to rapid displacement, disruption, and, in extreme cases, outright destruction.



new set of players from within and outside

of the industry and increasing regulatory

mandates is threatening the traditional

utility model (figure 1):

Demand for ultra-customer centricity, the

rise of prosumers demanding electricity

flows from and to the grid, technology

advancements, digital disruption, entry of

Figure 1: Evolving energy & utilities landscape

No matter where you sit in the

value chain, the message is

clear. Surviving and thriving in

a rapidly changing power and

utilities sector isn’t simply about

the importance of demand

and new fuel sources, or about

regulatory or societal pressures.

It’s about envisioning different

futures, understanding trends

and uncertainties, considering

the implications for underlying

assumptions in the strategy and

the business model, developing

monitoring capabilities, and then

responding accordingly when

disruptions have the potential to

upend core beliefs.

- Deloitte



Next-gen utilityAs new technology and regulatory

mandates transform the energy and utility

industry, a host of opportunities and threats

are emerging. Energy and utility suppliers

are now able to monitor and control grid

operations at both transmission and

distribution levels. Customer engagement

has moved online, opening many new

possibilities. Customers themselves are

adopting new technologies, such as the

Internet of Things, solar panels, electric

vehicles and energy storage.

The adoption of new technologies is

creating new opportunities and expectation

across the energy value chain. Distributed

Energy Services (DERs) enable customers

to participate directly in grid operations.

An analogy can be drawn with Uber as

energy and utility are also moving towards

becoming a sharing economy, where

customers can earn money by flowing

energy back to the grid instead of keeping

a battery or electric vehicle idle when not

in use. They can choose their source of

energy from wind, solar, nuclear or coal.

All these changes require traditional utilities

to transform their business model. Doing

so by simply cutting costs and managing

regulators would eventually lead to a

decline in revenue and result in losing of

customers to third-party energy suppliers.

Building the next-gen utility can help the

incumbents to improve performance,

deliver ultra-customer centricity, enhance

reputation and improve profitability across

the board by opening up entirely new

business lines and service models.

Next-gen utilities should focus on the

following:

• Ultra-customer centricity

+ Shift from viewing customers as

ratepayers to considering them as

individuals with an array of preferences

+ Allow customers to reach energy and

utility suppliers through their preferred

mode while delivering seamless and

consistent experience across channels

+ Transition from suppliers of energy to

act as energy advisors and suppliers of

energy services



• New ancillary services

+ Enable customers to participate in grid

operations through evolving distributed

energy technologies

+ Leverage smart home technologies and

IoT to better engage with customers

along with proactively managing assets

• Intelligent digital operations

+ Leverage Big Data to improve customer

experience, reduce cost, improve

reliability and increase revenue

+ Workforce optimization and mobility

solutions for field force

+ Implement robust controls and on-

demand regulatory compliance

reporting

+ Digital- and analytics-driven operations

to improve customer and business

outcomes

In order to transform into a next-gen

utility, companies no longer need to

acquire new infrastructure or capabilities.

They can opt for asset thin, cloud-based

infrastructure and

partner-supported

capabilities which

providing the speed

and agility to respond

to evolving business

and customer needs.

Emerging role of service providers – Operations as-a-ServiceThe next-gen utility will require next-gen

service provider. The global services

industry is evolving from a cost focus to

a cost+value proposition where an as-a-

Service business model is challenging the

established paradigms of sourcing.

With the evolving energy and utility

landscape, suppliers can look towards

service providers to deploy as-a-Service

solution to deliver true business value as

well as enhance responses to changing

business requirements by marrying

scalability, revenue recurrence and

efficiencies of as-a-service business

Next-Gen Utility

Ultra customer centicity

New ancillary services

Intelligent digital operations

Customer managementcapacity to include:

Asset Thin/Cloud basedlean infrastructure on apay per use model

Omni-channel customerinteraction

Organization-widedata-driven decision-making



model with domain expertise and custom

solution development of customer-centric

outsourcing.

As energy and utility suppliers integrate

as-a-service solutions into their business

model, these solutions will facilitate

business decisions due to accessible

information, scalability in operations and

improved business functions. Energy

and utility suppliers could apply this on-

demand capability to a wide range of

business problems such as customer

churn, profitability or acquisition.

A few benefits that energy and utility

industry can gain from as-a-service

solution are:

• Next-generation solutions with scalable

systems and processes designed to

catapult growth

• Lower total cost of ownership as capital

investment and annual maintenance

(continual support, maintenance and

software upgrade costs) become greatly

reduced

• Evolutionary/disruptive ultra-customer

centric unified-office

• Access to technology that would

otherwise be expensive to implement

• Access to new talent pools and greater

ability to focus on core area of business

• Cloud systems for anywhere, anytime

data access; integrated systems providing

real-time visibility to processes

• Increase speed to market

• Decision-making support leveraging the

power of analytics

• Implement best-practice processes with

higher efficiency

• Single hand-off with service provider

reduces governance and integration

effort



Operations as-a-Service framework for Next-gen utilitiesThe following key attributes define the as-a-Service paradigm for Next-gen utilities:

Domain-centric customer outcomesoriented service definition

Embedded and integratedtransformation

True variable pricing

Evolutionary/disruptive ultra-customer centric “Unified-Office”

Shift from traditional KPIs to customer outcomes

Transaction based pricing

Modular and differential pricing

Outcome-based pricing (where relevant)

Digitized Processes: + Back-office and field workforce digitization + Advanced automation/robotics/cognitive/machine learning solutions + On-demand knowledge management for workforceAnalytics Engine: + Advanced analytics to improve operational processes and lower costs + Analytics-backed technological innovations + Analytics-driven dynamic pricing solutionsEmbedded transformation services – maturity model, benchmarking, continuous improvement

Continuously optimized, plug andplay delivery platform

Cloud-based billing and CRM platform

Digital/mobile platforms for customers and field services

Industry specific point solutions and analytics wrappers

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EXL (NASDAQ: EXLS) is a leading operations management and analytics company that helps

businesses enhance growth and profitability in the face of relentless competition and continuous

disruption. Using our proprietary, award-winning Business EXLerator Framework®, which

integrates analytics, automation, benchmarking, BPO, consulting, industry best practices and

technology platforms, we look deeper to help companies improve global operations, enhance

data-driven insights, increase customer satisfaction, and manage risk and compliance. EXL

serves the insurance, healthcare, banking and financial services, utilities, travel, transportation

and logistics industries. Headquartered in New York, EXL has more than 24,000 professionals in

locations throughout the United States, Europe, Asia, Latin America, Australia and South Africa.

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