Marcus Cox, Head of ASPIRE Managed Service at Version 1, highlights how strong technology partnerships are key to driving digital transformation and innovation in the utilities sector, ensuring resilience, efficiency, and sustainability.
The utilities sector is facing a host of challenges due to shifts in technology, policy, environmental initiatives, and evolving consumer demands. From upgrading legacy infrastructure and cyber security protocols to keeping up with regulatory compliance, utility suppliers have no choice but to adapt for the digital age.
Additionally, energy firms are facing higher taxes, so cost savings, along with solutions that will allow them to become more efficient, and scalable, are a must.
The UK Government recently outlined plans for a new data sharing initiative that will allow energy firms to cooperate during power outages, yet many utility suppliers are still in the infancy of their own digital transformation journeys. For instance, many of the larger, more established players in the sector are still reliant on legacy technology. Meanwhile, the agility of challenger brands has enabled them to scale rapidly and increase market share by using technology to their advantage.
Regardless of their position in the market, utility firms work on tight margins and understand that technology offers routes to provide better value to their customers. What’s more, they must be digitally astute as the energy industry is enduring most of the cyber-attacks that take place against the UK’s critical infrastructure.
In order to make digital transformation a success, utility suppliers need to keep their enterprise software running smoothly, securely and reliably while remaining cost-effective. However, whilst these principles remain important in today’s environment of revolutionary technological change and industry disruption, they are no longer sufficient to future-proof their success in this competitive market.
As utility companies strive to meet an ever-growing list of requirements, in a constantly changing world, harnessing the latest technology can help them improve their overall performance and outcomes. The latest technologies, like generative AI, are also becoming smarter and helping utility companies be more efficient. Technology partners, such as managed service providers, are playing a critical role in addressing the many challenges faced by the utilities sector today, while also helping them to plan for a sustainable future.
Enhanced operations drive innovation
Harnessing technology has become a necessity in modern business, and the same can now be said for the utilities sector. While utility companies have been leveraging cutting-edge technologies to enhance their systems for a considerable amount of time, providing value still remains a challenge. Smaller, challenger brands work on lesser margins than their larger counterparts, so any technology driven cost savings are most welcome.
Thanks to technology advances and assistance from managed service providers, companies can now benefit from solutions that offer insight on business objectives. This allows them to discover new ways of working to improve processes, productivity, and customer relations.
If the digital transformation journey is successful, utility companies can offer a better value proposition that goes beyond servicing customers’ day-to-day needs. Now, there is an opportunity to enhance operational efficiency, meet sustainability goals, and deliver better customer experiences. This is achievable by embracing six key principles that help utility companies deliver comprehensive services while accelerating innovation:
AI Driven Automation
While AI has exploded with the advent of ChatGPT, and the evolution of Generative AI, in the last couple of years, the reality is that managed service partners have been using AI for some time now. By automating tasks that are repetitive, error-prone, or highly intensive, utility providers can reduce costs and put the focus back onto high-value work, which improves productivity. Taking advantage of automations, data and AI will reduce costs and deliver real-time information on service performance.
Simplification
Technology can also help utility companies eliminate complexity from the customer journey with systems that prioritise the user experience. This allows utility providers to keep pace with rising user expectations. What’s more, managed service partners can help utility companies optimise costs, simplifying their license estate by offering governance and vendor management for all enterprise software.
Protection
Adopting the latest technologies does not come without a certain degree of risk. Developers do their utmost to ensure businesses remain secure while using their solutions, but there are no guarantees. It is essential for utility companies to embrace comprehensive, robust security that stays ahead of potential vulnerabilities in a diverse, and growing threat landscape. Managed services can help to secure data, minimise downtime and allay compliance worries through proactively designing security into system architecture.
Innovation
While it is a given that managed service partners will help utility companies harness innovative technologies to deliver tangible insights and benefits, this can now be taken a step further. By learning how technology impacts a utility company, a trusted third party will be able to understand their business objectives and recommend more efficient ways of working in the future. Innovation should also not be restricted to the boundaries of managed services. Value led innovation helps to streamline operations, increase productivity and unlock new levels of efficiency.
Realisation
The cornerstone of any business is ensuring ROI. As utility companies invest in more advanced technologies, managed service partners can help them establish meaningful KPIs and Value Level Agreements (VLAs). Focusing on service level agreement (SLA) achievements alone will create the ‘watermelon effect’ where everything appears to be positive (green) on the outside according to the SLA dashboard but underperforming (red) on the inside in terms of user experiences and real business value. VLAs shift the focus onto creating pure business value by setting metrics, defining outcomes, and identifying experiences that matter most.
Evolution
As technologies evolve, so should systems and processes. A third-party specialist can help utility companies adapt to a shifting technological landscape and share a culture of learning and progression. What’s more, an external expert’s offering can become stale without evolution in the relationship with a utility company. All aspects of a managed service need to continually evolve, from day-to-day services, costs, and the provider’s framework to cultural alignment and digital experiences.
Technology partnerships deliver sustainable digital transformation
The future of the utilities sector hinges on embracing digital transformation, and technology partnerships are no longer optional but essential to making this a success. Managed service providers bring invaluable expertise to help utility companies modernise, thrive, and stay secure amid rapid industry changes. By focusing on automation, simplification, security, and continual innovation, utility firms can transcend basic operational improvements to achieve enhanced resilience, agility, and customer satisfaction.
As utility providers face increasing demands for efficiency, sustainability, and regulatory compliance, third party technology experts empower them to unlock new potential. By finding the right partner with experience, knowledge and proven results, utility suppliers can do more for their customers than simply offer basic services, as well as allay any concerns around support and maintenance. These partnerships deliver sustainable digital transformation that not only streamlines operations but enables utility companies to redefine strategic outcomes for the future.
