Leverage your Data with Improved Analytical Insight
To stay competitive in today’s utilities market, companies must make the most of the vast quantities of data they collect. Both digital and data transformation processes are needed to set companies along the right path, as they begin to harness analytical power. Utilities have been comparatively slow to adopt Big Data tools and strategies, mainly due to the unique challenges they face.
Challenges facing utilities
Utilities face challenges that are either exclusive to them or are magnified within their market to some extent. In their report, PWC point-out several key points which are currently testing the industry. Rising capital costs, strict compliance requirements, and the move towards ‘green’ energy are all having an impact.
Using analytical potential is critical if companies want to succeed in the face of fierce competition. Newcomers and digital-only providers are on the rise, adding to the 60+ already challenging the ‘Big Six’. Competing companies need to deepen their understanding of customers and the market, to keep up.
Capgemini detail the top challenges utilities face when implementing Big Data strategies. These provide some reasons why the sector has been a pretty cautious adopter. High storage costs, data complexity, and accessibility and privacy concerns have held adoption back. The industry also suffers from a skills shortage and a lack of management support for implementation; although these are improving.
Giving the green light to improving insight
Supporting frameworks are now being formed thanks to the growing awareness of the benefits that Big Data can bring. In utilities, an early example of this is marked by the start of the UK smart meter roll-out, in 2011. Therefore, 2011 marked the beginning of utilities making better use of customer and usage data. There are now around 14 million smart meters in UK homes, and the plan remains to meet the very ambitious 50 million target by next year.
According to BizTech Magazine, companies will invest heavily in data analytics in the coming years, as they look to gain an advantage over competitors and save money in the process. Poor quality data and struggling infrastructure will no longer pose such an issue when the transition to a ‘modern grid’ is completed. For more information on the ‘modern grid’ see this article.
Realising the benefits
Once the infrastructure is brought up to scratch, companies will begin to benefit. With data quality and accessibility improved, advanced analytics will prove crucial to commercial success in the sector.
Much has been written about Big Data benefits, as companies and entire industries begin to realise its full potential. Capgemini put forward use cases from two main areas set to profit:
- Marketing and customer care
Offer and services – tariff optimisation, energy management tools, smart home.
Proactive marketing – customer management, enhanced brand & communications.
Network and production – customer base management, enhanced brand & communications.
Support function optimisation – supply chain.
Asset management – real-time asset monitoring, predictive maintenance.
Demand forecast – energy consumption forecasting, trading optimisation.
Customer relations – electricity load optimisation, capacity planning.
Revenue assurance – fraud detection, network loss prevention.
According to the article, the potential applications for advanced analytics will appear in a staged fashion, as capabilities mature. For instance, reporting and BI will precede more advanced areas like predictive and real-time analysis.
By investing in Big Data and their analytical faculties, utility companies will stay ahead of the curve. These benefits will lead to improved revenues, higher customer satisfaction and retention rates, as well as better decision-making.