The pressure to become a data-driven business with a competitive edge is greater now than ever. The digital economy brings new demands from technology-savvy customers and unprecedented competition from new players that have entered the “traditional” utility market with lean, cutting-edge infrastructures. The foundation of all of aspects of competing and succeeding in the digital economy is data – how it is transmitted and collected; managed and stored; processed and analyzed; applied and delivered. But data alone is not enough. Analytics is the most powerful component of the digital economy. Analytics compounds the value of data through advanced algorithms and machine learning processes to enable and often automate core business decisions. This is the analytics economy. To thrive in this new economy, executives must change their mindset and prepare the entire business for what’s ahead.
Here are five key imperatives for businesses to meet digital demands and outrank competitors in the analytics economy:
What does your company and your brand stand for? How are you differentiating your services against a multitude of new players? What do you contribute to the marketplace? To your industry? To the community? To the world? Clarifying your corporate identification is different than defining your vision or mission. This is your purpose. Your company’s reason for being.
Before you can transform your business in the digital age or transition to being a data driven company, you must first identify what you want your company to be and who your customers expect you to be. This clearly defined identity will inform your data and analytics strategy by guiding the questions you ask and the problems you work to solve ultimately driving the products, solutions, and services you deliver.
In every textbook definition of economy, there are producers and consumers. In the digital economy, information consumers are the drivers. Data consumption patterns vary significantly. Users segments across the company have discrete needs and expectations which affect how they consume information. Not only do their methods of consumption differ, their interests and the information they choose to use vary widely. Consumers also ingest data in various forms and expect businesses to deliver through a variety of channels and in multiple formats.
The four factors that guide how individuals choose to consume data are: value, effort, trust and control. Users and consumers want information that is acutely related to their specific needs and easy to use. They want to be confident in the accuracy and they ultimately want control (or perceived control) over the decisions or actions they make based on the information they receive. This confidence will be critical as utilities navigate the changing relationship with customers.
Collaborative analytic teams recognize that the value of the team’s combined knowledge and resources are far greater than its individual parts. When collaborating, these teams gain a broader and more thorough understanding of business goals as individuals bring different perspectives to the table. Outcomes are shared and more efficiently achieved because of distributed effort with mutual responsibility.
Collaboration should not be confused with cooperation. Teams that “get along” or operate conflict free do not equate to collaboration. In fact, healthy collaboration will often involve challenges where team members equipped with effective conflict resolution skills will seek solutions most advantageous to the common goals of the team. Collaborative analytics not only assumes team members will act in the best interest of shared goals and outcomes but will also share knowledge and skills for increased understanding and accelerated development. Collaboration will become increasingly important in utility operations such as outage and asset management, where data, systems, and process integration are critical success factors.
Monetization is often assumed to be the selling of data sets such as customer information or transaction histories. While data sets can be sold, it is not a sustainable business model for generating revenue as the value of data depends on the context of use which is determined by the consumer, not the producer.
Monetization is not the commoditization or productization of data. It is the specialization or differentiation of information-based products, solutions, and services that establishes a competitive position in the market. To effectively monetize data and information assets, businesses must deliver products or services that solve or contribute to the solution of specific problems, create new markets, or disrupt industry paradigms. Businesses cannot monetize their data without analytics. Analytics affords companies the ability to identify problems consumers may not even realize exist and proactively offer solutions they cannot live without. Leveraging analytics to improve customer engagement to sell new energy related products and services is a great example.
Communication is the heartbeat of a healthy analytics culture. Unfortunately, it is one of the biggest challenges for businesses. To be successful, communication must occur in numerous ways for a multitude of audiences. But take caution, just because communication methods must vary, messages must remain consistent.
Sometimes facts, figures and finite details are appropriate but for most audiences, numbers and statistics often obscure the impact and value of a solution. Use stories to evoke emotion to motivate and influence audiences to take action. Every day there are new stories of how utilities are changing the game by leveraging operational and customer data. Use visualizations to highlight key elements and make advanced analytics easy for busy minds to digest. And provide environments that communicate critical, top-level information for quick consumption with the ability to drill down to details at the user’s discretion.
What does the Analytics Economy mean for the Utilities Industry?
These five imperatives set the framework for a new executive mindset, but it is the full practice of these imperatives that enable utilities to thrive in the analytics economy. If executives insist on embedding analytics throughout the organization, not just in discrete silos, then the utility will be well positioned to capitalize on opportunities including:
- Expanded revenue opportunities with customers, increasing share of wallet
- Optimized infrastructure for renewables, microgrids, storage and electric vehicles
- Proactive asset management strategies that improve grid reliability
- Innovative partnerships that complement and extend the core business
The true identity of the utility will be revealed by the actions taken to embrace the analytics economy. Whether the actions are conservative or aggressive, consistency in execution is key to future success. What I’m sure of is that there is an exciting journey ahead!