The utilities sector is finally opening its doors to emerging technology. But why now, and which are the key systems and processes it should consider?
In today’s rapidly changing operating environments, conditions are tough when it comes to adopting the latest technologies and rolling them out to create a positive impact in a timely manner. In few industries is this truer than utilities.
The utilities sector faces considerable challenges as the demand for clean energy and better customer service intensifies. With recent research spelling out a stark warning to utilities providers unwilling to change their ways, the traditional approach of leaving customers ‘in the dark’ appear numbered.
Are new technologies the answer, or should utilities companies be wary of running before they can walk?
Centralising data key to improving service amid rising customer expectations
Consumer expectations for service are changing. According to Assurant, 83% of consumers think best-in-class experiences raise their expectations for all companies, meaning that ‘consumer expectations are not only affected by companies in the same industry but companies for all industries’.
Rising customer expectations in the utilities sector are putting pressure on providers. In this environment, the ability to centralise data could dramatically improve the service that utilities providers are able to deliver through the supply chain.
Software solutions and platforms that enable greater efficiency in the delivery of the customer-facing chain can do great things for how consumers perceive providers – from aiding communication to error logging, repair plans, service delivery and the intelligent monitoring of parts to put them where they are actually needed. UK gas company HomeServe is just one example of a provider that has centralised information to improve its customer service.
Changes in the actual delivery/transport of certain utilities (for example, energy storage and the ability to both buy and sell electricity) mean more changes for the industry as a whole. These technologies will gradually change what it means to be a utilities vendor, with a corresponding effect on the way the supply chain is managed.
AI streamlining utilities supply chain processes
As utilities companies are forced to seek new revenue streams like home automation and electric car charging, there is good news ahead. New technologies can free up human workers for complex decision-making, planning and customer interaction. AI could also assist in information gathering and remove the potential for error from tedious repetitive tasks.
RPA – Robotic Process Automation
RPA tools are used for business processes, rather than being robots in the sense of warehouse or factory floor automation. They work by repeating sets of actions demonstrated for them by a user or ‘trainer’. They can also process data across different platforms, e.g. transferring information from an email to a spreadsheet. They have the potential to make supply chain processes cheaper and more efficient, although there is some debate about whether their use would prevent sector jobs being outsourced to countries providing cheaper labour. They are seen as being a useful starting point for potential digitisation. There are different estimates on how much RPA could save, but market researchers Forrester put this at around £2.2 billion by 2021.
A digital twin is a digital simulation of something physical, be it an object or system. Influential research and advisory company Gartner named this one of its top technology trends in both 2017 and 2018.
For supply chains where it’s necessary to work in harsh terrain or in dangerous conditions, digital twins mean the ability to control physical work remotely, with highly informative monitoring and reporting. Advances in the Internet of Things have further improved digital twin capabilities. An example comes from recent space exploration; SpaceX sent up their ‘Ripley’ smart mannequin covered in sensors, reporting back on minute details of G-forces and other factors on the journey.
Digital twins can help predict and monitor potential effects on a human, without putting a human at risk. They can help assess safety for workers in an industry where safety is paramount and where there are also many regulations to satisfy.
Low code development
We’ve heard it said that every child should learn to code, but is that really true? The adoption of ‘low code’ systems that work with a simple ‘drag and drop’ will mean increased development speed. For an industry undergoing radical change and a considerable shift of gear, this is a tool that will help keep up with the speed of change. There are also potential cost savings from reduced staffing requirements and increased productivity.
The state of cybersecurity in the utilities sector
Faster-moving processes are worth considering when you take into account the figures around cybersecurity. There could be a real danger that the sector leaves itself particularly vulnerable as it tries to keep up with the rate of change.
A January 2019 article from Deloitte reported that the power sector is a frequent target for cyber attacks, with supply chains seen as being particularly vulnerable. The nature of the attacks is also changing; now the systems that control power facilities are increasingly becoming the target. Deloitte cites the origin of the threat in well-funded organised crime and nation states, rather than lone hackers. It paints a picture of an increasing threat that usually fails but has the potential to cause major disruption, both to the supply chain and to public safety. It is an issue the industry will have to protect itself against, especially with consumers and so many other industries dependent upon it.
New technology enables more efficient operation and the benefits of improved customer satisfaction – changes that could help see off utilities providers’ agile contenders in a time of constant competition. However, utilities supply chains must also keep pace with technology to ensure their security.
There are inherent risks and high stakes in this industry; as the case of cyberhacking reminds us, the power supply itself could be compromised were this complex issue not addressed. Although there are many obvious advantages to introducing new technologies, the message is clear: firms need to consider both potential gains and technical vulnerabilities in order to keep supply chains sustainable.