UTILITY INNOVATION BLUEPRINT: How to Manage the Challenge of Dual Transformation

The challenge facing utilities is how to maintain reliability while simultaneously creating the agility necessary for innovation. Over the past century, utilities have been optimized around reliability, but new technology, competition, and regulations are changing the industry. This new imperative to innovate requires a different set of capabilities that run counter to the conservative business culture that is common across the industry.

To manage this challenge, utilities are pursuing dual innovation on two tracks, both investing in ways to optimize the core business and be able to adapt to new business models that reflect industry change.

THE DUAL INNOVATION CHALLENGE

THE DUAL TRANSFORMATION

REQUIRES RELIABILITY

•

• Customer service enhancement

Operational efficiency improvement

• Increase profits

• Free up capital for reinvestment

REQUIRES AGILITY

• New product and service

development

• New business models

• New revenue streams

INNOVATION

Transformation Track One

Transformation Track Two

Automate the Core Business

Develop New Business Models

“Digitization is not an IT project, it’s an opening up of potential within business units.“

– Eesti Energia

“We’re having to really rethink how [to] work in a much more accelerated manner… We need to be more responsive and more flexible.“

– Utility Executive

Methodology: The experts interviewed in this study represent 16 utilities on three continents, serving 42m customers, with 162,000 employees, selling electricity, water and gas.

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THE UTILITY INNOVATION BLUEPRINT

Source: Navigant Research

UTILITY INNOVATION BLUEPRINT

LAY A FOUNDATION WITH PROCESSES

• Evaluate accountability by project type

• Balance finance with risk

• Constantly monitor progress

ACCELERATE WITH TECHNOLOGY

• Digitize then automate

• Deploy cloud and analytics

• Iterate on new services

INSTIGATE A CULTURAL SHIFT

• Secure executive sponsorship

• Embrace new organizational perspectives

• Empower your people

“Everybody is running around trying to be innovative, but no one is really sure how.”

– Utility Executive

“Our mission is to be a catalyst, a fire-starter, a spark. We want ‘innovation arsonists’ to get more fires started.”

– Utility Executive

While most utilities understand the need to transform, many find themselves ill-prepared to address this transformation. To help utilities optimize their investments in this arena, we’ve developed this Utility Innovation Blueprint. Based on in-depth industry interviews and analysis of programs worldwide, the Blueprint gives practical advice for utilities developing their own innovation initiatives.

Read the full study: www.oracle.com/UtilityInnovationBlueprint