Sponsored content: Thursday, 27th August 2020, Australia
Focus Network, in partnership with OutSystems, brought leading IT executives from across the Australian utilities sector, in a conversation to discuss how utilities can benefit from a rapid development platform for core transformation and digital opportunities all along the value chain.
- Adopting a modern, low-code platform without overwhelming the business and taking too much risk
- How to build a digital transformation velocity that is responsive to business need and external influences
- How low code is being used to develop applications for remote operations, cost management, staff interactions, remote working, field services and more.
The session was moderated by Blake Tolmie, Director of Operations, Focus Network and providing great insights into session were experienced strategy and thought leaders Paul Arthur and Claus Etienne.
Brief introduction of the speakers
Paul Arthur, Regional Vice President, ANZ, OutSystems – Paul has spent over 20 years working with IT solutions vendors and partners across both Europe and Asia Pacific. He has a passion for improving the customer experience through the power of IT to drive the business value for his clients. He has worked in several different industries and companies from global players to local start-ups, building businesses and teams that focus on customers’ needs and value drivers above all else. He was employee number one at Cherwell Software APAC and most recently was General Manager at Australian start-up Data Republic.
Claus Etienne, Utilities Solution Project Lead, DBResults has a role focusing on helping organisations on their needs and delivering solutions utilising Agile approaches. He has over 22 years’ experience in the utility sector across 5 continents working across almost all sectors in the industry.
Susceptibility to future disruptions
Utilities face infrastructure challenges as well as customer challenges across both retail and commercial businesses. In this session, there is a good representation of a combination of utility providers from electricity, water to petrochemicals. An interesting observation is that the focus in the energy industry that started off 15-20 years ago when they deregulated Victoria, the same pressures are being seen currently in the water industry. There seems to be a cycle of evolution passing on from one sector to the other.
Based on Accenture’s Research Disruptability Index 2.0 in 2018, the propensity for disruption within certain industries in the utility space, as markets are moving more towards that upper right quadrant (Volatility quadrant), the propensity and susceptibility for future disruption as well as the current level of disruptions are getting higher and higher. You can see electricity is higher than gas or water, but everything else seems to be heading in that direction for disruption. Currently there are 92 electricity retailers in Australia in the AER (Australian Energy Regulator) website. The energy sector is the next sector scheduled to have CDR (consumer date rights) applied in Australia resulting in more disruption and competition when it comes to the customer side of things. That’s not to say that a lot of the disruption and transformation hasn’t already occurred. Across the utility industry there has been a huge step towards IoT, Smart Meters, Smart Grids, Big Data Analytics across all sectors have had significant investments done in those areas to help improve the deliverables, infrastructure or the efficiency of that infrastructure. We see many of these as enabling technologies rather than differentiating technologies. It’s how you are going to differentiate going forward which is going to be the biggest challenge in the disruption phase.
“At OutSystems we talk about this as disruptive transformation rather than digital transformation” says Paul Arthur, Regional Vice President, ANZ, OutSystems. Digital now is a given and a recent phrase says that ‘every company is a software company’. The reality is that there is a software element in every organisation. So disruptive transformation is where organisations have started to focus on how they want to become masters at disruptive transformation. What we are seeing is that organisations who can master the active disruptive transformation, are taking that act across multiple industries. Their ability to disrupt is transferred across multiple industries like UBER moving from taxis to food delivery and many of the Telco organisations going from Telco to provisioning or retailing electricity. They have perfected the art of disrupting a particular industry and they are then applying the same mastery across to others. Being ‘born in the cloud’, this has been easy for some of them, with no legacy or history and not tied to a technology stack that limit them. They can use the latest and greatest of tech that allows them to actually move fast. Most organisations aspire to have that agility of performance and most people are somewhere on that curve where you are aspiring, embracing, evolving or mastering the art of disruptive transformation.
We can see that split across several layers. It starts off with a curiosity and then adoption of some of that technology and eventually you become innovators of that. But the key area of this transformation, where most of the organisations in the utility space are, is the difference between being internally focussed or externally focussed. Internal focussed transformation is being more efficient in your delivery, asset management and managing your infrastructure more efficiently. That can help bring down the cost base, making you more competitive in the market. What we are seeing with organisations that are mastering disruption is that they are focussing externally. They are focussing their technology and software into how they engage around the customer experience in the customer journey and how they build relationships in those aspects.
Change in thinking from being a pure service provider to more value adders to customers is important. By advising customers on how to save energy or water by having a smart showerhead or turning off the heater etc., all of which are varying levels of engagement. Making sure that you understand your customer and actually engaging with them in the appropriate manner and talking to them in the way that they want to be talked to. We have various personas like people who prefer to use chat over a phone call, so it’s of paramount importance to engage with those various people effectively through their preferred channel.
This is now about creating a personal relationship. Up until now utilities have been like a commodity, always on and always available, and you expect that when you hit the switch or turn on the tap. You expect it to deliver and the sector has done a great job of actually doing that and in effect has made it look easy and simple for the people to receive the service. The challenge created by doing that is making what you deliver very commoditised and hence the differentiations can only come in two ways; either differentiate on price or on experience. Both of those dynamics have different character sets in the perspective of growing a profitable business. Deloitte talks about creating a personal relationship in this concept of a smart home platform, of engaging with your customers on how and when they want to be engaged with and with the content that they want to see and nothing else. The quality of the product you deliver doesn’t change but how you deliver that and the experience they will have through that delivery will often influence their decisions and driving conversations.
From the horse’s mouth – what IT leaders are seeing out there
“With water utilities in Victoria or anywhere in Australia, differentiating the offering is not necessarily the driver as we are a monopoly”, noted Amanda Finnis, General Manager Information, Digital and Cyber (CIO), Coliban Water, Victoria. “However, the external facing aspects we are having these conversations about, go well beyond the customer being external but also looking at smart partnerships that we can engage in, as it’s no longer just about providing the water service or core services but it is looking at things like what kind of information do we have or data that we have with which we can partner with other people and do smart things at the community level and an environmental level. And I think it goes well beyond as just the customer being external.” Coliban Water are also talking about going further, as the strategic direction is very much about prosperous communities and green environments for communities and less about that corporate vision. We also have a strong commitment to reduce carbon emissions. Data we collect that is rolled out of the metering could do interesting contributions for town and regional planning.”
Another example of using data for supporting customers is one of the current customers that OutSystems has been working with, WaterNSW. They have been looking at the best way to add value to their consumers like the farmers, using the data they gather on a daily basis. The data from BoM (Bureau of Meteorology) combined with their own can be potentially used to help guide farmers on a better time to plant their crop. In instances where the rain condition looks suitable, advise them to plant something two weeks earlier because if they get the produce to market two weeks earlier, they might be able to get a premium price for it. “And it’s those sorts of things that results in having a far more interactive and engaged position and create a good level of trust with the consumer”, reiterated Claus Etienne, Utilities Solution Project Lead, DBResults. “Most utility providers realise that they have a huge amount of valuable data. It’s about how you free that data or how you connect your disparate systems and bring those together, integrate and share that information in an interface or in a point where everyone can make sense of it.”
“Even though we are a monopoly here and don’t have direct competitors, we have indirect competition in other ways like Solar PV voltage systems, Smart Grids etc.”, commented Vibin Vijayan, Applications Services Team Lead, SA Power Networks. “Obviously we have rich data of customers from a long period of time from meters and we know their consumption trends. Also, with solar power, we can track how much we are putting back to the grid and those kinds of information but at this stage we are not sure if we can legally commercialise this or not. At the same time, we can analyse this data to create a custom kind of product. Even when you subscribe to a new electricity retailer, they can come up with a plan based on your consumption patterns which results in a personalised connection. As we are not able to predict future issues, in the event of such unforeseen instances occurring, being ready with our historical data will help to adapt and move to any network or form in quick time. Data hence plays a vital role in future direction and decisions.”
Energy companies could be proactive in examples like; if there is a prediction for a heat wave, notifications via an app saying things like ‘can you please turn your air-conditioning down’ can assist in controlling the situation better. At WaterNSW, the major water storage for Sydney metro is the Warragamba Dam, which filled over its 100% capacity and had a spillage. Therefore, they had to tell the downstream people early that due to the spillage you are not allowed to do recreational activities in the river. The BoM had a range of weather predictions and if you get the upmost level for rain, 300 houses are expected to get flooded. They had no way of contacting those people directly and had to go via Sydney Water and basically do flyers. While that is not an everyday event, a similar kind of incident occurs across all the utility providers where we have outages or severe weather events. While there is an outage, there is no way of communicating with those customers. It’s about how we effectively engage with the customers and what do we actually do with them. The passive way is to have a website up and that is not best way, but other means like an SMS alert or other ways of connectivity with the customers to share vital information.
Engagement during challenging times builds goodwill
“While New Zealand is a smaller market, there are about 40 energy retailers out there. We are one of 5 generator-retailers and for us digital transformation is front of mind from a customer journey perspective, says John Montgomerie, Head of Portfolio and Project Management, Mercury, New Zealand. As New Zealand has gone into a lockdown position, the reliance on using the digital channel to engage with our customers came to the fore. Things like our chatbot usage and use of our mobile app ‘Mercury Go’ skyrocketed and hence we are recognising that. We have realised those as the most suitable channels of engagement and continue to strengthen it into the future. While they are competitive differentiators, it is a very competitive landscape that we are playing in and looking for a point of differentiation for us amongst our peers is always a challenge. So, the focus is on how we add value to our customer experience, and while sometimes it’s a race to the bottom, we need to know how best to manage that and maintain that balance.”
To manage customer hardships with payment, Mercury provided a free ‘hour of power’ and responded pretty quickly to the market with that. This went down really well with their customers. They also recognised that there will be payment challenges for the customers into the future and are conscious of the winter lockdown and of disconnections or deactivations which could result from that. By ensuring their digital channels were activated and calls coming into call centres are able to respond appropriately in those circumstances, they maintained a streamlined plan for consistent communication with customers. As with a lot of organisations, their customer engagement team was also working remotely and fortunately had the infrastructure to support that.
“The story that makes me proud to work for SA Water, says Christine Rootsey, Enterprise Technology Architect, SA Water, is that not only are we providing discounts on bills for anybody that needs it, but also have examples of people not able to afford to put food on the table (due to the impact to their income) and we could send out $50 vouchers to contribute to buying groceries. The long-term benefit and the goodwill out of that far outweighs the $50 given to that customer. By having the data on our production; we can predict demand and but being able to control demand is the utopia and that would result in a win-win situation when we know our customers and profile them and offer them advise and offer discounts based on the demand and supply trends at various times in the year.”
Peer to peer sharing
Amanda added that another notion they are exploring is the peer to peer water sharing, by cutting the provider out of the loop. The rural sector is able to do that better than the urban environment. “The question is how you establish a system that is beyond trading and is about peer to peer connections. With the ability for consumers to put power back into their grid, or putting rainwater back into the water grid, there is another level of health consideration that we need to solve for that. It’s still a new area to explore.”
This is not just for the water utilities but even for energy ones as the example in South Australia where AGL have put out the notice that people can actually trade their energy or donate it to their friends or charities. Thus, the tools and capabilities of making peer to peer engagement happen is going to come up especially where these are scarce resources and trying to manage demand.
What we can see in other markets which overtime will merge into the utilities too, is that the ideation stage is relatively simple and it’s the execution stage which is hard. The speed of the ability to execute is key and the ability to accelerate innovation, fail and iterate again is going to be important on that journey. Utilities are things that people really need, like electricity and water and cannot do without the supply of, but you can ideate around the experience of those things. Like the experience of moving to a new house, the experience of signing up for a different package, experience of the type of package that you are taking to market etc. Some people may be happy to pay a certain fee for the whole year and use as much as they like. While other people would prefer to be on a pay-as-you-use model. Unless you have the technology platforms to try these things and build them, you will always be chasing the market.
OutSystems Customer stories
Talking about customers with whom we are working with in the Utility sector, EDP, electrical supply organisation in Europe is a great example of success. They were very serious about customer satisfaction and the net promoter score. They had a very different perception to the services they were delivering to customers compared to what the reality was. As we know, we are only as good as our last interaction with our customers. People expect everything to work perfectly but only remember when things don’t work. They were struggling with the customer perception of their services and they used OutSystems to build a new portal which they called ‘Easy4u’ and by doing so, increased their customer satisfaction percentage by 17%. We therefore build something simple and effective to raise that customer experience. While the provision of electricity or water into homes is seamless, and it’s a shock when it doesn’t work, and the interaction with people when that happens is what actually sticks with people. Thus, the better customer satisfaction reduced the customer churn in effect. They used that platform to build their entire billing process by replacing their outdated legacy system saving a huge amount of funds on their maintenance bills and have a much agile approach to collecting their revenues. So, they not only enhanced their customer digital experience but also improved their digital core.
Another customer in Netherlands, ENGIE, build their trading platform from scratch to going live in 6 months with just 6 developers and created a trading platform across their customer base to actually be able to balance and nominate the allocations of their resources. This is something they build really fast. What we are finding today is that customers are using our platform across the utility space to innovate and to execute innovation. They often had ideas about what they wanted to do but they struggled with the execution of it and OutSystems allows them to do that execution as we go forward.
We covered various themes on driving efficiency or creating new and innovative ways of doing business, and during this time of COVID, we have to be innovative and efficient at the same time”, said James Harrison, Solution Architect, OutSystems. “The challenges that you face in implementing those ideas can range from how you actually build those experiences. You might need to build web apps, mobile apps, might need to share date through APIs, to turnaround things quickly to respond to the market etc. The OutSystems platform is designed to assist you to overcome those challenges all at once.”
Being able to build an application across the full stack with a single developer, building up a data model, doing integration and doing the user interface or the visual way of working; that’s what the platform is all about. And how you write software and build software becomes much easier. We are also able to integrate with any systems, even if there is a legacy system, while that is not the utopia that we want. The platform is designed to integrate with any technology that you have without need to write any code, you can do it in an efficient way. Moving into the lifecycle model, from development to test in an easy way, without affecting your end customers, managing the whole lifecycle and not just the initial build. And finally, the types of experiences you can build on the platform from web apps and mobile apps, with really beautiful looking experiences all the way to things that don’t actually have user interfaces like middleware or APIs and transfer of data, or chatbots and non-tangible experiences like SMS and email. All this is put into a platform that is designed to scale and has built-in security as well. This can also be run in a managed cloud environment, where we manage all the infrastructure for customers, or it can even be deployed in on-prem infrastructure too. Which makes it very flexible in terms of deployment options.
We are helping a lot of organisations in the Utility space, some more legacy while some are disruptors, to create amazing solutions for their customer and internal business.
This brought the conclusion of a highly interactive session with participation from the delegates and great discussions facilitated by OutSystems. Valuable insights were shared within the group across several areas of the utility sector. Focus Network facilitates a data-driven information hub for senior-level executives to leverage their learnings from, while at the same time assisting businesses in connecting with the most relevant partners to frame new relationships. With a cohort of knowledge hungry and growth minded delegates, these sessions have seen imparting great value for participants. With the advent of the new ways of working remotely, Focus Network continues to collaborate with the best thought leaders from the industry to still come together to share and navigate the ever-changing landscapes barrelling into the neo industrial revolution.