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December 21, 2016
How utilities can “rewire” their organizations for digital
By: Mark Insch

We’ve mentioned in previous posts that for utilities to pivot to a digital world, traditional operating models need to change. The ability to deliver new services and meet rapidly evolving customer expectations requires an agile “test-and-learn” culture, characterized by rapid innovation and the release of new features in a “fail-fast, scale-fast” approach. It also requires a flexible organization structure and capability model that can pivot and scale to support a multitude of capabilities and processes. Rather than building the operating model around the functions and services they offer, utilities should place the customer at the center. Doing so requires a re-examination of how teams are organized to support a more integrated, customer-centric approach to delivering digital.

For the utilities contact center, new customer product offerings requiring next-generation service are becoming possible as digital disrupts retail markets. Electricity companies in New Zealand, such as Powershop, are now offering flexibility both in their product bundles and customer interactions. Powershop markets itself as a digital electricity retailer, where the customer makes the rules, giving customers real-time usage data and flexible payment and product options. Their online shop offers customers the opportunity to buy “powerpacks” at any time—packs of electricity usage in various sizes/costs—such as “Special Packs” offering discounted energy, or “Future Packs” to enable customers to save up for winter by buying electricity for use in future months. This approach reflects previous shifts to personalize the customer experience within the telecommunications industry, as exemplified by the company Telstra. Telstra’s strategy to know and serve their customers better than competitors means they offer customers the choice of not just digital connection, but personalized digital content as well, supporting this with effective cross-channel support, and with more than half of customer service transactions delivered online.

As the Telstra example shows, digital customer service may mean cross-skilling existing customer-facing staff in digital customer interactions, so that they can support the increasingly social-centric and “always-on” customers across multiple channels. However, more significant shifts in organization structures and capabilities may also be required. Traditionally, social channels have been controlled by marketing or external communications functions, but this is changing as social is increasingly used as an enquiry and complaint channel. Our research shows that more than one-quarter of utility customers interacted with their energy provider through social media in 2016, a trend which is only set to rise.

A number of major UK telecommunications companies and a large UK water utility have recently made this shift, integrating the ownership and delivery of social media and digital within their core customer service business. Similarly, Powershop uses social channels to provide customers with easy, convenient access to support, while also delivering entertaining and innovative social campaigns to increase brand engagement.

Artificial intelligence and automation are additional trends disrupting the utility organization structure. Our 2016 Accenture Technology Vision survey of utilities executives found that utilities have already achieved cost savings of at least 15 percent from intelligent automation. As lower-level, back-office transactional tasks become automated, employees are freed up to focus on continuous improvement and insight generation. The nature of these activities requires a move away from functional silos to more agile test-and-learn teams focused on operational improvements across end-to-end processes.

But utilities need to go beyond sporadic application of robotics tools. By putting the customer at the center of what they do—and bringing together predictive analytics, AI and digital service—utilities could improve customer acquisition and retention through intelligent personalization and proactive issue resolution. This approach will be particularly relevant for UK utilities, following recent CMA measures to increase customer switching including providing a database of “disengaged” customers for rival companies to target.

There are lessons for utilities from other industries on positioning the customer experience function at the heart of their organizations. Many brands now have a chief customer officer (CCO) or equivalent, with responsibility across the organization for the customer.

As we’ll explore in future posts, the organization structure is not the single solution to becoming fully digital. However, without establishing and nurturing a digital culture and talent pool, supported by the appropriate organization structure and capabilities, utilities will continue to dabble with digital, rather than putting digital at the core of the business.

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