Energy and Utilities
What are the benefits of digital transformation in the energy & utilities sector?
Research shows that the energy and utility sectors will generate $1.3 trillion and $299 billion in value through digital transformation by 2025. To remain competitive, it is critical for the energy and utility sectors to do a digital transformation in operations, customer service, finance, and other areas.
This article will explain how digital transformation in power and utilities can drive end-to-end value. We will also understand how outsourcing non-core processes can help you focus on the primary business.
Current problems in the energy & utilities sectors transformation
Even though 95% of leaders in the utility sector understand the need for digital transformation, it still lacks pace. The reasons are –
Paper-based workflow
The energy and utility industries rely on record keeping and communicating through paper and pen, and making phone calls between the field and back office. This causes inaccurate, inconsistent, and incomplete data. It leads to backlogs, higher costs, and safety issues.
Since this manual process is deeply ingrained, shifting to digital transformation requires a fundamental change with monetary and time investments.
Retiring workforce
As the new workforce replaces those who retire, they will look for automated and digital alternatives. Expecting them to work with paper-based workflows will cause a conflict and may lower their interest in working in these sectors.
The need for advanced technologies for future energy needs
To cope with the increasing demand, energy and utility companies are upgrading to Distributed Energy Resources (DER) and Advanced Distribution Management Systems (ADMS). Such systems require highly accurate data, which is not possible with existing methods of work. According to research, such issues cost global economies $1.6 trillion globally.
Benefits of energy and utility industry digital transformation
AI-powered solutions for the energy and utilities industries monitor and track all the assets, including on-site equipment, mobile devices, end-user equipment and personnel, for effective asset management. These monitoring and advanced analytics capabilities detect or even predict faults and schedule maintenance to reduce equipment downtime. Moreover, the image processing applications of AI in the energy and utilities industry tracks potential breaches of safety protocol and suggest appropriate actions for enhanced workplace safety for personnel working with heavy equipment in potentially hazardous situations.
Better customer experience
Enhancing the customer experience is a key goal of digital transformation. Personalised interactions through the online portal, customer service team, and mobile app allow end users to access and transact directly with the utility. This gives customers direct access to all their account information and improves loyalty.
Improved data management
Data management and accuracy are important to improvise processes which ultimately leads to cost savings. The energy and utility sectors adopt new technologies to collect and analyse data from multiple touchpoints and streamline operations.
Higher efficiency in operations
Digitisation can increase efficiency, improve customer service, and lower costs for the company and the end user. For example, automated electricity meter readings and billing reduce administrative expenses and energy theft. It reduces labour costs by 50% and improves the bottom line.
Data-driven decision making
Energy and utility businesses can use precise data that was not available before to make decisions to improve overall efficiency.
For example, the Florida Power and Light (FPL) upgraded its infrastructure to a smart grid for efficient, reliable, and resilient service. This included installing 4 million smart meters that communicate wirelessly with the company.
Better security
Multiple risks can jeopardise the safety of customers and employees in the energy and utility industries. By upgrading the security with real-time data monitoring, the companies can identify suspicious activity, which they can investigate and resolve.
Digital transformation trends in energy and utilities
With the above benefits in mind, the following trends will continue to grow in the energy and utility sectors –
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Edge computing
This type of computing processes the data locally rather than through a centralised location and will see significant growth in the future. The benefits of edge computing include low latency and bandwidth cost and higher security. With edge computing, businesses can improve customer service through real-time data and analytics.
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Digital twins
It is a digital replica of an object or a system that captures information from the real system and creates realistic models. These models give insight into how the system will behave in certain scenarios, reduce downtime, manage asset risk, and improve efficiency.
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Security
Utility and energy systems need constant protection from hackers trying to disrupt the services or steal data. Two-factor authentication makes it difficult for hackers to access the systems. Encrypting the data and limiting its access to only those who need it ensures that you provide safe and reliable service to the end user.
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Outsourcing non-core processes
Energy and utility businesses spend significant time and money doing non-core processes in-house. Due to their remote location, they often do not have access to top global talent and struggle to meet the quality in finance, IT, HR, supply chain management, and customer service.
This is where outsourcing non-core processes to domain experts brings in a global talent pool at a better price than their in-house team.
For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.
How can Infosys BPM help?
Domain experts at Infosys BPM provide specific services to the energy and utility sectors in master data management, analytics, performance management, flex-staffing, sourcing and procurement, HR, finance, and customer services.
Short-term gestation projects cover industry research, spend analytics, and credit research.
Read more about value-driven BPM services for energy and utilities sector transformation.
