Utilities need to plug into agile

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Digital innovation is the key to handling more volatility in the markets.

Utilities are making significant technology investments, according to the World Energy Markets Observatory, but the move towards a more digital future is slow, and we continue to see digital innovation within utility operations impacting the core capabilities of the industry.

There are a lot of headwinds. Decarbonization, disintermediation, decentralization, and decreasing consumption are on the rise. Digital is the key to connecting everything and moving beyond a purely platform model to link new products and services with core demand sectors, such as transportation, buildings, and industry.

Technological convergence is moving forward, with maximum impact from developments in artificial intelligence, distributed ledgers (blockchain), and advanced control algorithms. To meet changing customer expectations and increase operational efficiency, utilities are focusing on data analytics and deploying agile techniques.

Agile techniques are an iterative, incremental approach to manage change and allow a company to react more quickly when there are market upheavals. Agile is no longer just an option. Utilities need to embrace agile and create a culture that fosters experimentation, learning, and adaptability to market disruptions. In a time when utilities are dealing with volatile, uncertain, complex, and ambiguous generation, transmission, and distribution situations, agile is the answer. By using agile management techniques, workflows, and processes, utilities can still see positive ROI.

According to the Capgemini Research Institute report Agile at Scale, this cannot be rushed, and a big-bang approach rarely works. So, shifting to agile workflows will not happen overnight. The companies that are succeeding in scaling are doing extensive upfront planning first.

Pilots are an important part of the process. Find use cases that drive business value. There are multiple areas of change where agile could bring big returns. For example, customer centricity is a significant challenge for utilities, because they are dealing with a more active and demanding customer base. Changing customer journeys, preferences, and engagement channels can be managed with new technology.

While companies view agile as an antidote to disruption, the majority find it hard to realize the full benefits. According to our research, more than 90% of companies practice agile to some degree, but less than 20% say they have achieved agile maturity. That means if you have not started to embrace this new approach, you are not alone.

As the market becomes more volatile and diverse, agile is the best way forward. The four keys to your agile journey are:

  • Experiment: Start with customer-focused initiatives; scale gradually
  • Orient: Change culture by changing behaviors and develop T-shaped skills
  • Govern: Link agile portfolio planning and operations with business strategy
  • Accelerate: Modernize IT with DevOps and microservices.

It can be hard to identify priorities when the market is heading in multiple directions, but investing in digital innovation is the best way to handle market disruptions. Harnessing new technologies will require an agile methodology to succeed, so it is simply not the time to continue to do things the same way.

Randy Cozzens is an Executive Vice President and North American Energy, Utilities and Chemicals Market Unit Lead at Capgemini and he can be reached at randall.cozzens@capgemini.com.

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