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Be the connector and integrator
Embracing disruption and placing the right bets to forge a new role in the energy ecosystem of tomorrow
"Electric, gas and water company leaders know there’s a very real possibility that if they don’t accommodate the swiftly evolving expectations of society, they’ll continue to lose ground to new players who are eager to step in and take their place. Companies can avoid this fate by shifting toward a new role – what we’re calling a Utility Platform Player."
Power and utility leaders know they must continue to evolve their role, and most are actively taking steps in that direction. To get a better idea of how your peers are preparing to move forward in the years ahead, PwC conducted a survey of senior industry professionals across the US working in both regulated and deregulated markets. Here’s what we found.
Power and utility companies are aware of the new reality they face, and they understand that previous business models are not built for the needs of today and tomorrow. Most are taking steps to adapt, with a vast majority surveyed saying they are creating new business models to reflect these changing customer preferences, expectations and behaviors.
The challenges facing utilities to create improved utility-customer relationships – and the platforms to accommodate them – are many and varied. Reinventing and modernizing the customer relationship also means reshaping mindsets across the organization.
As power and utilities seek to broaden their roles, they are looking inward, recognizing the need to adopt technology and develop a workforce with the talent and skills needed to embrace what the future brings. Many still have a long way to go. But, they’re making progress and are clear-eyed about the need for digital workforce transformation.
Most report actively trying to recruit and retrain workers with the strong digital skills needed to lead the future of their organizations. When it comes to the most coveted skills, data science and analytics surge ahead as the clear winner, followed by customer experience.
Power and utilities are taking a hard look in the mirror, evaluating asset portfolios and developing key strategies to face the realities of tomorrow. Strategic mergers, acquisitions or other business combinations will continue to help fill certain capability gaps; while companies may also shed parts of their portfolios to be more nimble for the future.
When it comes to digital capabilities, companies recognize that they don’t always have the digital capabilities they need to come out on top in an era of shifting business models and consumer expectations. So, they’re looking for ways to obtain those capabilities, often through partnerships, with very few saying they see mergers and acquisitions as the path forward. Most find it challenging to gain stakeholder support on this front.
As utilities strive to modernize, they are faced with a choice: Where to focus the attention? Looking ahead the next few years, a majority surveyed plan to place the lion's share of their investment dollars on improving the distribution management network. In an effort to build a "digital bridge" to their customers, nearly all have already implemented advanced metering and monitoring systems, or have plans to do so.
However, diving into this modernized future isn't without its challenges. Conflicting priorities and regulatory hurdles lead the list as the top challenges potentially standing in the way of progress on this front.