emergence and transformation of digital utilities in the “smart” era

Emergence and Transformation of Digital Utilities in the “Smart” Era Jonathan D Loretto, Michel van Zutphen

Oracle Open World 2013

2 Copyright © Capgemini 2013. All Rights Reserved

Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013

Agenda

The Emergence of the Digital Utility

Reinventing the Digital Customer Experience

Illustrative CX examples

Oracle CX

Conclusion



Digital transformation of global corporations is driven by

outside-in changes

where innovation appears faster at the far reaches of the organisation

digital, cloud-based services provide new opportunities for

agile global platforms through centralised management

digital transformation offers a different paradigm for

global IT organisations and new prospects to be grasped



The digital generation is setting expectations on global corporations and driving demand for digital transformation

The digital consumer

drives outside-in

transformation

Agile digital

platforms exploit

federated services

The realisation of

benefits needs to be

weeks not years



The digital consumer drives a need to transform outside-in versus inside-out, to drive speed-to-benefit and to reduce costs

Customer Focus Consistent customer experience

Multiple channels and devices

Immediate 360 view of customers

Agile response to new demands

Proactive creation of new offers

Corporate Focus Re-use system investments

Align old and new worlds

Consistent processes and data

Central governance & security

Cost efficient operation

Inside-Out for stability

and integration

Outside-In for speed

and flexibility

Digital

Enterprise

http://logosense.files.wordpress.com/2012/01/logo-oracle-large.jpg

http://sjsattler.files.wordpress.com/2012/03/ibm-logo.jpg

http://www.logostage.com/logos/sap.jpg

http://www.google.co.uk/imgres?imgurl=http://www.mxsweep.com/Portals/67458/images/pda-smartphone-iPhone.jpg&imgrefurl=http://www.mxsweep.com/blog/bid/64616/Smartphone-Use-Is-At-40-Mobile-Security-At-Risk&usg=__J4rlFX5Hi-tCJJ974kGyD4qEHLo=&h=352&w=352&sz=32&hl=en&start=10&zoom=1&tbnid=vusrmEiKvUFhuM:&tbnh=120&tbnw=120&ei=b0apTs-yC8n4mAWyxNSxDw&prev=/search?q=smartphone&hl=en&safe=active&sa=X&tbm=isch&prmd=ivnsu&itbs=1

http://www.google.co.uk/imgres?imgurl=http://techgenie.com/wp-content/uploads/World-IPv6-Day-Trial-to-be-hosted-by-Google-Facebook-Yahoo.jpg&imgrefurl=http://techgenie.com/category/internet/&usg=__zQSDGCGjYdMiafD3quillS77qH0=&h=480&w=640&sz=53&hl=en&start=1&zoom=1&tbnid=SY-Xcz8uiHBooM:&tbnh=103&tbnw=137&ei=ayAgT8DYLa7H0AHDzv0F&prev=/search?q=internet&hl=en&safe=active&sa=X&tbm=isch&prmd=ivns&itbs=1

http://www.google.co.uk/imgres?imgurl=http://www.everymessage.com/wp-content/uploads/2009/09/em-callcentre-icon.jpg&imgrefurl=http://www.everymessage.com/contact-centre-messaging/&usg=__hGtldIVm_fyoIBl6Vr-bT_g0uG8=&h=436&w=401&sz=23&hl=en&start=21&zoom=1&tbnid=K2B8UuS5jUs_wM:&tbnh=126&tbnw=116&ei=zSAgT6ifDIfc0QGk-8gG&prev=/search?q=contact+centre&hl=en&safe=active&sa=X&tbm=isch&prmd=ivns&itbs=1

http://cdn.digitaltrends.com/wp-content/uploads/2011/08/salesforce-logo.jpg

http://www.freakyperfect.com/wp-content/uploads/2011/05/twitter-logo.jpg



Technology-enabled initiatives in:

• Customer Experience

• Internal Operations

• Business models

• Core digital capabilities

Leadership capabilities including:

• Vision

• Governance

• Engagement

• IT-Business Relationships

• Change management

Digital leaders exhibit two common traits: Digital Intensity and Transformation Management Intensity

Digital Intensity Transformation Management

Intensity



This is not for us!

Beginners

Building the Digital Advantage…. D

igit

al in

ten

sit

y

Transformation management intensity



digital

This is not for us!

digital digital

digital

digital

digital

Beginners

Fashionistas


igit

al in

ten

sit

y




digital

This is not for us!

digital digital

digital

digital

digital

Analogue Transformation

Beginners

Fashionistas

Conservatives


igit

al in

ten

sit

y




digital

This is not for us!

digital digital

digital

digital

digital

Analogue Transformation

Digirati!

GROWTH + 9 %

PROFIT + 26 %

MARKET VALUE + 12 %

Beginners

Fashionistas

Conservatives


igit

al in

ten

sit

y




Every Industry has Digital Leaders

“Utilities are in

great majority

conservatives"

“There is a great

consensus around

the transformative

potential of Digital

Technologies,

although with

limited hope for

significantly

increasing

revenue"



Digital Utilities Transformation: Driving value from the smart energy infrastructure

SMART RENEWABLE SMART CONSUMER SMART GRID SMART METERING

ELECTRIC

VEHICLES

PHOTO

VOLTAIC SMART

DEVICES HOME ENERGY

MANAGEMENT

DIGITAL

ASSETS

SMART

METERS

BUSINESS AS USUAL DIGITAL ENABLED BUSINESS DIGITAL UTILITIES TRANSFORMATION

CLOUD MOBILITY BPMS BIG DATA

Technology Advancement & Consumer pull

Energy transition

Service Improvement & Cost Saving Pressure



Agenda




Oracle CX

Conclusion



With the developments such as smart meters, utility customer‟s needs and expectations are higher than ever

Improve Customer Relationship

Better understanding of customers

Billing on actual usage

Better responsiveness for the interventions

Improvement of existing services

Diversification of offerings and services

Tariffed offering differentiated according to fixed or variable periods

Be informed when the tariff is higher

Be able to act to generate savings (even thinking about it)

Compensation in case of load shedding without a control system

Optimization & Financial gains

Decrease in the volume of claims

Optimization of certain processes

Reduction in the billing cycle

Decrease in the fraud

Reduction in the average cost of supply

Smart environment raise the customer expectations with a right balance between comfort and energy savings

While People are taking control of their energy consumption and automating their home, Energy suppliers interacting with their customers in new ways Help them understand how they consume energy

Help them reduce bills, while retaining their desired level of comfort

Provide new services, such as micro-generation, storage and electric vehicle battery management

Receive the request for load shedding by SMS or any other digital channels.

Access to a web portal allowing a view of the load curve and a summary of load shedding



These changes have led to key business and information challenges faced by Utilities

Business Challenges

High cost to serve: phone channel still dominant; high call volumes & low FTR

Lack of Insights: poor data quality & analytics relative to other industries means opportunities are lost

SMART: large & complex requirements that requires focus & investment

Social media: accelerates the impact & frequency of negative customer experiences by going viral

Low NPS: Customers compare Utility experience against banking, TV, mobile & broadband – not other Utilities

Price: Managing customers‟ expectations around the increasing price of electricity

Low Engagement: Customers have been indifferent & disengaged for Utility

Sophisticated buyers: increasingly demanding consumers want more for less

Customers are forcing change and it aggravates Utilities‟ existing challenges and introduces new challenges

Information Challenges

Limited Context

– Situation: Information is too generic for action

– Problem: Not made available in context

– Impact: Decline in resolution of issues

Information is required in Real-time

– Situation: Information is too late for action

– Problem: No method to process events

– Impact: Limited operational responsiveness

Actionable Information

– Situation: Information has no guidance

– Problem: No insight for next steps

– Impact: Increased cost to business

Consumer behaviour is undergoing on a major shift due to the digital revolution



The new norm of Customer Experience in Utilities

“Utilities have analyzed data for many years, with spreadsheets and custom tools; mere fraction of data generated by smart meters and IEDs have transformed the behavior of

customer , which now requires new ways / transformation in analyzing Customer behaviors to provide insights which is delivered using DUT”

Multiple Channel Communications

Customer Segmentation and

Empowerment

Customized Product & Service

for everyone

Smart Meter data Analytics

Changing Perception- From

Ratepayers to Valued Customers

@

How can I provide

right service to

right customer

through right

channel?

Does he belong to

high temperature

geography and

might buy rooftop

Solar PV?

Kevin‟s job, work-

timings and

preferences very

different from his

neighbors

Smart meter, IHD

generate huge &

variety of data; how

can I have

actionable insights?

How to win the

trust of my

customers & make

them feel special?



Digital transformation offers a different paradigm for global IT organisations and new prospects to be grasped

Technology Architecture

• Connects omniChannel

to existing back office

investments

• Agile framework e.g. Plug

& Play, PAYG services,

in line with business need

Operating Model

• Spans governance,

ownership,

accountability,

organisation structure,

new ways of working

• Best of breed vendors

managed in an integrated

service framework

• Managed service

delivered to agreed SLAs

Commercial Model

• Utility pricing aligned to

business outcomes

• Pay as you go to reduce

upfront investment

Digital

Enterprise

Technology

Architecture

Commercial

Model

Operating

Model



...and is already adopted by Capgemini; Immediate™ Framework.

Indu

stria

lisat

ion

Cos

t red

uctio

n

Spe

ed

Val

ue

Systems of Records

Systems of Dif ferentiation

Systems of Innovation

Overall object ive

Agile interaction layer

Robust application layer

Pace-layering distinguishes the robust application layer and the agile interaction.

Spee

d

Val

ue

Ind

ust

rial

isat

ion

C

ost

red

uct

ion



Agenda




• Lean energy retailer

• Energy efficiency

• Self-sufficient energy community

Oracle CX

Conclusion



Lean energy retailer in a competitive market Business context

Business issues • Competition and more in particular

new entrants, fuel a pressure on retail prices

• Cost-to-Serve and cost-to-acquire levels need to be lower to preserve a healthy margin

• Differentiating offerings and good customer service are required to win, grow and keep customers

Revenues Total Operational

CostsOPEX

Energy Cost(including costs and charges)

Gross Margin

Operational Cost to Serve

General Marketing Costs

Distribution Costs

CtA general

CtS general

Net Margin*

Full Cost to Acquire (CtA)

Full Marketing Costs

Full Cost to Serve (CtS)

Operational Cost to Acquire

Operational Marketing Cost

Transformation program • Transform to a customer-focused energy retailer first focusing on optimizing the operational model:

Standard products and services

Lean & mean processes

Aggressive financial steering & control

Agile IT platform.

And then get, keep and grow profitable customers



Lean energy retailer in a competitive market Business transformation via layered IT-platform

Layered IT Platform

Multiple Layers

Presentation – Process –

Integration – Transaction –

Data

Service Oriented

Architecture

Application functionality

shared via services

Combining build to

change, build to last

Web based portals. BPM for

flexible processes. ERP

systems in Back-end

1

CRM

Campaign management

Sales

Contracts

Employee Portal

Othersystem

Datahub Other apps

Orchestration layer

Web Portal

Self Service Portal

Datawarehouse

BAM

Reporting (tac & strat)

Marketing intelligence

AVAYACTI

IVR

Output managementdocument formatting & routing

ECM @Mail E-mail Web

Other interfaces

Banking

General ledger

Social services

SMS

Central registers

Billing

Billing

Credit & Collections mgt

Consumption

Data Quality

Mkt. Fulfillment

Meetdata bedrijf

UWL Top 10transactions

Integration layer webservicewebservicewebservicewebservicewebservicewebservice



Energy Efficiency for San Diego Gas & Electric - Business context

Objective and scope • Provide customers with new insights,

convenience and practical support for being more energy conscious

• Give SDGE a new channel for interaction with customers through marketing offers, goals and actions – and links with the customer portal, outage management and social media

• Future extension for Demand Response, Home Automation, Electric Vehicle Management etc.

Home Energy Management is no longer an adjunct to “Smart”, it is a key part of Digital strategy



Energy Efficiency for San Diego Gas & Electric - Solution

• Goals and actions

• Tips and hints

• Compare vs weather

• Compare vs previous periods

• Customer offers

• „Ecoscore‟

Android

App

iOS App

Data Services

Transform Layer

Applications API

Access

Co

ntr

ol

Visualization

Layer

Gateway Stack Access C

on

tro

l

Browsers

72

Premises Devices

Cloud Services

Gateway

Normalized Data

Warehouse

Enterprise & 3rd

Party Systems

Apps

The SDGE PowerTools app has energy consumption as its core information

But the app also provides the opportunity for interaction with the customer...

• YouTube videos

• Twitter feed

• Outage map

• Link to customer portal (e.g. for mobile bill payment)



Texel: self-sufficient energy community Context

The island of Texel wishes to supply its energy needs entirely from local renewable sources in 2020

Dutch island in the North sea

165 km2 & 6,000 households.

Industries: Recreation, Fishery, Agriculture

Energy needs (year) Elektricity : 80 tWh, Gas 22 mio m3

Road map to a sustainability Texel 2020

Community Energy Management: Cloud Power

Urban solar (PV) projects

Solar-farms

Biogas digesters

Biogas fired CHP (electricity and heating)

And in the orientation phase:

Wind turbines

Deep geothermal energy

Tidal

TexelEnergie, a local Energy community

Fulfils the community energy needs

Sells, produces and buys renewable energy;

Encourage and assist its members in the reduction of their energy consumption;

Encourage and assist its members in the implementation of domestic power generation - like PV-panels -;

Contribute to the local economy on the Island of Texel.



Control

signals

Texel: self-sufficient energy community Solution

Individual participants Community Grid company

Collective generation

Local

generation

Metering

Home Energy

Management Electricity, gas,

heating, cold, water

Central Energy

Management

Interval readings

Interval

readings

Interval readings

Interval readings

Energy advices

One-hour-ahead price-signals

(Real-time signals)

One-day-ahead price-signals

Smart Appliances /

Equipment

Household profiles

Control

signals

• Control appliances, smart plugs and lighting • Inform occupant on the hourly prices (TOU) • Home energy management (Home as a microgrid) • Analyses of volumes

consumption, production, exchanged energy with the community (grid) smart appliances, equipment and smart plugs

• Budgetary control and analyses

Smart Home • Forecasting • Balancing & Scheduling • Execution & monitoring Energy program • Deliver volumes and prices to Billing • Analyses and generate energy advices

Virtual Smart Grid Smart Metering

http://www.kelcroft.com.hk/img/energy_bems_101.gif



Agenda




Oracle CX

Conclusion



Capgemini‟s H-architecture for Customer Experience

Multi channel Experience

Insight & Analytics

Personalized environment Social Media integration

CRM – Mark. &

ServiceAutom. DecisioningeCommerce

Se

cu

rity

Integration and Orchestration

Meter Data CC&B EMS

HEMS

ESR Service

Delivery

NMS

Go

ve

rna

nce



The Oracle solution stack against H-model

Multi channel Experience

Insight & Analytics

Personalized environment Social Media integration

CRM – Mark. &

ServiceAutom. DecisioningeCommerce

Se

cu

rity

Integration and Orchestration

Meter Data CC&B EMS

HEMS

ESR Service

Delivery

NMS

Go

ve

rna

nce

ACCESS MANAGEMENT

REAL TIME DECISIONING

CC&B MDM NMS

WAM

Siebel

BPM BAM

MWM



Capgemini‟s Customer journeys in Oracle

• Social Media monitoring and Churn Management

• Focus on new digital channels (social media listening and response)

• Shift focus from selling commodity electricity and gas towards energy saving advice and

additional services

• Retention offers based on the retention budget/customer values

• Cross and Upsell additional services and products to existing clients

• Inform and update customers about all products and services and is able to sell them

• Enhancing the customer service experience

• Feature-rich web portal for customer service representatives

• Tailored offers and services

• Provide Energy Management advice

• Real time decision enablement

• Sign up for energy alerts services



Agenda




Oracle CX

Conclusion



The Key Messages

Your customer’s expectations are changing

Think digital when designing your customer journeys

Digital is not just about customer experience

The Digirati apply an integrated approach to digital

Carefully consider your operating model before

embarking

New techniques may be required [that are counter

cultural]

Measure, measure, measure



Contact Information

Michel van Zutphen Vice President and Global Technology Lead,

Digital Utilities Transformation, Capgemini

[email protected]

Jonathan D Loretto Chief Digital Evangelist

Digital Services North America

[email protected]

mailto:[email protected]






www.capgemini.com

The information contained in this presentation is proprietary.

Copyright © 2013 Capgemini. All rights reserved.

Rightshore® is a trademark belonging to Capgemini.

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of the world's foremost providers of consulting, technology and

outsourcing services. The Group reported 2012 global revenues

of EUR 10.3 billion.

Together with its clients, Capgemini creates and delivers

business and technology solutions that fit their needs and drive

the results they want. A deeply multicultural organization,

Capgemini has developed its own way of working, the

Collaborative Business Experience™, and draws on Rightshore®,

its worldwide delivery model.

Learn more about us at www.capgemini.com.

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emergence and transformation of digital utilities in the “smart” era

Business

meter data cc

illustrative cx examples

lean energy retailer

robust application layer

multi channel experience

home energy management

digital customer experience

transformation management intensity