A modern digital platform: A once-in- a-generation consolidation opportunity Digital could open an exciting consolidation opportunity for fast-moving companies that create digital platforms to meet their customers’ needs. The pace of technological change is increasing— look at the fast-decreasing cost of cloud computing, the growing availability of powerful machine-learning (ML) and AI capabilities, the rapidly evolving tools to deal with persistent and chronic data issues, and the increased intelligence in smart phones. While more utilities are starting to adopt many of these digital trends, the rate of adoption is not keeping up with the pace of innovation. The opportunity gap to improve key outcomes by deploying technologies and methodologies that have been utilized in successful transformations increases every day. The evidence for digital is clear. When working with leading utilities, we have seen exceptional step- change improvements in select use cases such as:
A digital platform on top of an available technology foundation What would happen if a digital platform that deploys every known high-impact use case to its full extent was built on top of a flexible, extensible, available technology foundation that could “bolt on” additional utilities? While almost all major utilities are utilizing digital, data, and analytics in some fashion, it appears that few executive teams can articulate a cohesive strategy on how a comprehensive digital, data, and analytics platform could provide “best-in- class” outcomes across reliability, safety, resiliency, affordability, and customer experience—with no trade-offs. In our perspective, if a cohesive strategy is not devised within a three-to-five-year timeframe, likely no one will “break out of the pack” and the industry will continue on its linear improvement trajectory. However, bold industry companies that adopt a digital platform could achieve a step-change performance ahead of peers and, more important, use the once-in-a-generation opportunity to fundamentally restructure the entire industry. The value at stake is massive for those that take action. They could invite energy regulators, customers, and communities to join an unbeatable deal—a digital utility platform that provides the best reliability, safety, resiliency, affordability, and customer experience. Those jurisdictions and utilities that connect to the platform could be set up to tackle the energy transition from a position of strength. If the core utility product can be offered at lower cost and better customer experience, it will create more headroom to invest in carbon-free technologies or improvements in grid resiliency, or both. Many stakeholders would need to be involved to achieve this, including customers, investors, policy makers, and regulators. The regulatory relationship would be critical, given the authority that regulators generally have in approving (or disallowing)
— a 25 to 30 percent field productivity improvement from AI-powered scheduling
— up to an 80 percent capital reallocation based on ML insights in asset health
— more than a 30 percent improvement on customer satisfaction in select journeys
— a 2 to 5 percent increase in heat rate or yield for fossil as well as renewable generation assets
— more than a 30 percent improvement in reliability and resiliency outcomes within existing spend levels If the “product” is defined as clean, reliable, resilient, safe, easy-to-do-business with, and an affordable energy or water service, then a step change in every dimension is possible. This can be done by looking at a collection of already-achieved impacts from utilities using select digital use cases.
Accelerating the journey to net zero
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