How Digital Innovation is Transforming Utilities
Written by Matthew Terry on November 03, 2022
Once upon a time, utilities had low-engagement products, nearly invisible to their users. But the sector is evolving rapidly, forcing utility companies to adopt new ways of doing business to remain competitive in the industry. Much like the tale of Netflix and Blockbuster, those that do not proactively evolve risk being left behind by more agile competitors. Governmental laws on energy production, growing competitors in the energy market, and digitization of processes are putting pressure on utilities to pivot from their traditional approach to business.
Utilities have typically viewed their customers as “rate-payers,” as opposed to people with wants and needs. But there has been a significant shift in buyer power over the past few years, allowing consumers who want to switch suppliers to do so easily. Until recently, states were heavily regulated leading to virtually no competition within utilities, and no need to innovate upon customer experience. But this narrative is changing as decentralization folds out, lowering the barriers to entry for competition. In response, utilities will have to pivot their business practices towards meeting (or exceeding) customer expectations.
We can credit much of this shift to high levels of personalization and digital experiences across just about all B2C categories. Think about your experience ordering food delivery through DoorDash, requesting transportation through Uber, or putting on a recommended playlist on Spotify. All of these experiences offer the ability to customize your service or product uniquely for you, and provide a seamless digital experience. Meeting consumer expectations is vital to retaining utility business, especially as EV and solar become a more prominent stakeholder within the energy industry.
Haven’t convinced you yet? Here are some numbers from Deloitte’s survey of top energy providers:
- 95% of power sector respondents agreed with the statement “Digital transformation is a top strategic priority at my organization.”
- The majority of utilities are committing to reduce emissions by 80% by 2050.
- Respondents noted shifting customer behaviors, electric vehicles, and wind power is a nod to the new products and technologies that are transforming their sectors.
The utility industry is evolving, and fast. So how do companies keep up?
De-Risking Digital Innovation in Utilities
It's clear utilities need to join the rest of the business sector and invest in technologies that will meet their consumers where they are. But providing value to the consumer through a personalized digital experience isn't easy. There are many technologies available to utilities today such as artificial intelligence (AI), Internet of Things (IoT), cloud, and blockchain for increasing operating model performance. To effectively implement any of these digital strategies, utility companies should consider de-risking their initiatives through a Design Sprint. This practice eliminates the risk of committing to a technology that may not solve the primary initiative, saving both time and capital.
At Differential, we define a Design Sprint as a step-by-step process for solving big problems, creating new products, or improving existing ones. It compresses months of work into a few weeks, resulting in a high-fidelity interactive prototype that is tested with real users.
The process finds insights around the problem you're solving, how the end user will best use the digital product, and what shape the design will take to create a successful user-centric product. This Design Sprint approach aids utilities in developing a competitive advantage in the industry, and creates sustainable innovations that exceed customer expectations. Long-term, creating lifetime customer value.
Our team of dedicated designers, developers, and innovators are ready to de-risk, de-fine, and deliver on your needs. Want to chat more about how a Design Sprint could take your company to the next level? Let's connect.