Building a Digital Organization
Digitalization Trends & Opportunities
The Digital Electric Company of the Future
Questions
•
What kinds of cities do we want to live in tomorrow?
•
What if assumptions behind the projections about urbanization are wrong, and the current trend of urbanization is reversed by 2030 or 2050?
•
What if the global south achieved the same level of prosperity, wealth, and standard of living as the global north?
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Water Industry Process Automation & Control Monthly - April 2024
Digital Transformation Seminar
1. Lawrence Jones, Vice President, International
Programs, Edison Electric Institute
Gulf Cooperation Council Interconnection Authority
November 13, 2019
Dubai, United Arab Emirates
Digital Transformation
Seminar
2. Agenda
Building a Digital Organization
Digitalization Trends & Opportunities
The Digital Electric Company of the Future
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3. Questions
• What kinds of cities do we want to live in tomorrow?
• What if assumptions behind the projections about
urbanization are wrong, and the current trend of
urbanization is reversed by 2030 or 2050?
• What if the global south achieved the same level of
prosperity, wealth, and standard of living as the global
north?
|3
4. Incumbents’ False Sense of Security
- Why Innovate When the Current Operations Are
Doing so Well
- Henry Ford’s Horseless Carriag
- Walmart vs. Main Street
- Apple’s iphone – dismissed by Nokia and RIM
- Amazon vs. Walmart
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5. But First, Some Definitions
“Digitization was using digital tools to automate and
improve the existing way of working without really
altering it fundamentally or playing the new rules of the
game” – Dion Hinchcliffe
“Digital transformation is more caterpillar-to-butterfly
process, moving gracefully from one way to working to
an entirely new one, replacing corporate body parts
and ways of functioning completely in some cases to
capture far more value than was possible using low-
scale, low-leverage legacy business” – Dion Hinchcliffe
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6. But First, Some Definitions
Digitization is the process of changing from analog
to digital form.
Digitalization is the process of moving to a digital
business, that leverages digital technologies to
change a business model and provide new revenue
and value-producing opportunities.
Digital Transformation is the process of using
digital technologies to create new — or modify
existing — business processes, culture, and
customer experiences.
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7. Business Risk or Opportunity?
Business leaders identified digital transformation as
their top concern in 2019.
Of USD 1.7 trillion invested in digital transformation
this year, an estimated USD 900 million will go to
waste.
Why do some digital transformation
initiatives succeed and others fail?
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8. Business Risk or Opportunity
Either businesses see the opportunity to transform
as a proactive “a ha” moment that leads to “what
if” and “what’s next” or as a reactive situation
where “uh oh” prompts a response of “why didn’t
we” or “we could have done something had we
known.” The latter is a new sort of “Kodak
moment.”
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12. Building a Digital Organization
What words come to mind when you think
of digitalization?
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Connected, real-time, monitoring, design, mobile, marketing, social media,
new skills, evolving, future, adapt, vision, culture, coordination, cross-silo,
innovation, sensors, smart, optimized, automated
Digitalization is the use of technology to radically
improve performance or reach of enterprises
13. |13
Source: Adapted from George Westerman - Leading Digital: Turning Technology into Business Transformation
Fashionistas
•Advanced digital features
•No digital vision
•Underdeveloped coordination
•Siloed digital culture
Digital Masters
•Overarching digital vision
•Many digital initiatives with measurable
value
•Cross-silo with strong digital
governance with integrated digital
culture
Beginners
•Management skeptical of advanced
technology
•Immature digital culture
•Few digital pilots
Conservatives
•Underdeveloped digital vision
•Several traditional digital capabilities
but few advanced
•Strong governance across silos
•Actively creating digital culture
DigitalCapabilities
Leadership Capabilities
Building a Digital Organization
14. |14Source: Adapted from George Westerman - Leading Digital: Turning Technology into Business Transformation
Customer Experience
Customer Understanding
Analytics-based
segmentation
Socially-informed knowledge
Top Line Growth
Digitally-enhanced selling
Predictive Marketing
Streamlined customer
processes
Customer Touch Points
Customer service
Cross-channel coherence
Self service
Operational Process
Process Digitalization
Performance improvement
New features
Worker Enablement
Working anywhere
Broader and faster
communication
Community knowledge sharing
Performance Management
Operational transparency
Data-driven decision-making
Business Model
Digitally-modified
business
Product/service
augmentation
Transition physical to digital
New Digital Business
Digital products
Reshape organizational
boundaries
Digital Globalization
Enterprise integration
Redistribute decision authority
Share digital services
Building a Digital Organization
15. Customer experience
Gain an in-depth understanding of specific geographies
and market segments
Use analytics to better understand customers, what
leads to customer dissatisfaction, and to drive customer
behavior
Leverage digital media to promote company brand
Simplify customer processes
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Building a Digital Organization
16. Operational Process
Automation – allows more time to focus on innovation
and creativity while collecting data
Virtualize individual work by having tools and for remote
work and processes for collaboration
Data for decision-making and no longer using
assumptions for internal and customer-facing processes
Providing collaboration tools across companies to
improve operational transparency
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Building a Digital Organization
17. Business Models
Augment physical with digital offerings and share
content across organizational silos
Reshape company boundaries
Integrated information and digital technology to
promote global flexibility
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Building a Digital Organization
18. |18
Unified Data & Processes Analytics Capability Business & IT Integration Solution Delivery
Customer Experience
Customer Understanding
Analytics-based
segmentation
Socially-informed knowledge
Top Line Growth
Digitally-enhanced selling
Predictive Marketing
Streamlined customer
processes
Customer Touch Points
Customer service
Cross-channel coherence
Self service
Operational Process
Process Digitalization
Performance improvement
New features
Worker Enablement
Working anywhere
Broader and faster
communication
Community knowledge sharing
Performance Management
Operational transparency
Data-driven decision-making
Business Model
Digitally-modified
business
Product/service
augmentation
Transition physical to digital
New Digital Business
Digital products
Reshape organizational
boundaries
Digital Globalization
Enterprise integration
Redistribute decision authority
Share digital services
Source: Adapted from George Westerman - Leading Digital: Turning Technology into Business Transformation
Building a Digital Organization - Enabling Digital
Capabilities
19. The Key - It’s Not Just About Technology
Leadership Capabilities
Top-down Approach
Vision + Governance
Chief Digital Officer (i.e. Starbucks)
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Building a Digital Organization
20. Building a Digital Organization
Figure out your business strategy before you invest in anything
There is no single technology that will deliver “speed” or “innovation” as such.
The best combination of tools for a given organization will vary from one vision
to another.
Leverage insiders
Your staff have intimate knowledge about what works and what doesn’t in
existing operations.
Design stakeholder experience from the outside in.
If the goal is improving stakeholder satisfaction and intimacy, you need in depth
input from stakeholders.
Recognize employees’ fear of being replaced.
Emphasize how digital transformation is an opportunity for employees to
upgrade expertise
Bring Silicon Valley start-up culture inside.
Uncertainty requires agile decision making, rapid prototyping, flat structures
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21. Building a Digital Organization
Organizations with sophisticated digital cultures
typically do 5 things:
promote an external, rather than an internal,
orientation.
prize delegation over control
encourage boldness over caution
emphasize more action and less planning
values collaboration more than individual effort
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22. Building a Digital Organization
Are employees encouraged and empowered to
create change?
Do teams operate with sufficient autonomy for
judgement to be exercised?
Are incentives aligned with transformation goals?
Is questioning of the status quo encouraged?
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24. Digitalization Trends & Opportunities
What is digitalization?
Digitization of electricity, gas and water networks using
advanced technology. It allows two-way communication
between the utility and the network, including its
customers, and enables insight, automation and control
across the utilities’ operations, empowering utilities to
improve reliability, availability and efficiency of the grid
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EY – Digital grid: Powering the future of utilities. 2016. Summary. Full Report.
25. Digitalization Trends & Opportunities
Four Technological Forces Driving Disruption
Cloud Computing
Big Data
Artificial Intelligence
Internet of Things
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27. Growth of Data and Connectedness
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Source: IEA, Digitalization and Energy, 2017
Internet traffic has
tripled in past five years
90 percent of world’s
data created in past two
years
54 percent of
households have
internet access at home
Global mobile
broadband subscriptions
surpassed 4 billion in
2017
There are more mobile phone subscriptions than people in the world
Digitalization Trends & Opportunities
28. Internet of Things (IoT) Devices
Digital technologies are connecting to
communications networks to provide range of
services and applications
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Number of connected IoT devices is forecast to grow to
over 20 billion by 2020
Digitalization Trends & Opportunities
29. Impacts across all energy sectors
Transport
Sensors, automation, and satellite communications improve
efficiency and reduce maintenance costs
Big data analytics optimize route planning and reduce fuel use
Future of automated driving technologies could improve safety
Buildings
Smart thermostats and lighting
Sensors and predictive user behavior for heating/cooling
Industry
Long-history of improving safety and production
Advanced process controls coupling sensors and data analytics
Industrial robots and 3D printing
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Digitalization Trends & Opportunities
30. |30
EY predicts investment in digital will reach 2 trillion by 2022
2016 Investments
13B smart meters
11B smart grid
infrastructure
11B building energy
controls
6B EV chargers
4B industrial energy
management software
2B electricity systems
software
Digitalization Trends & Opportunities
31. Smart meters
Sensors
Drones
Building energy controls
EV chargers
Predictive analytics
Artificial intelligence &
machine learning
Internet of Things (IoT)
Cloud computing
Blockchain
Distributed energy resource
management solution
Mobile-enabled workforce
Cybersecurity solutions
Visualization technologies
Robotics
Augmented/virtual reality
Digital twins
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Digitalization Trends & Opportunities
Examples of digital technologies:
33. Opportunities of Digitalization
Reduce power system costs and boost profitability
– Reduce operations and maintenance costs
– Improve power plant and network efficiency
– Reduce unplanned outages and downtime
– Extend operational lifetime assets
A 5 percent reduction in O&M costs achieved through
digitalization could save utilities nearly 20 billion USD
annually (IEA)
Performance gains of 20 to 40 percent in safety,
reliability, customer satisfaction, and regulatory
compliance (McKinsey)
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Digitalization Trends & Opportunities
34. Additional opportunities include:
Improve power production and delivery reliability
Grow existing business with new revenue streams
Expand into new areas of business opportunities
Retain operations talent
Greater efficiencies in workforce automation
Improve business position against competitors
Better manage grid operations to greater profitability
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Digitalization Trends & Opportunities
35. Most of this potential
can be achieved
through:
Smart meters and
smart grid
Digital productivity
tools for employees
Automation of back-
office processes
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Digitalization Trends & Opportunities
38. Where is the Industry Now?
Electric company efforts include:
Plant optimization
Transmission & distribution asset management
Employee experience
Customer journey
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39. Power Plant Optimization
Increasing power plant efficiency, capacity, and
flexibility with improvements in operations
performance
Reducing operations and management costs
through better demand and technician planning
Improving machine and equipment health and
reliability through performance management
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40. Enel Green Power: Digitalization of
Hydropower Plants
Predictive maintenance and
advanced solutions for 33 of Enel
Green Power’s hydroelectric plants
Hours-based maintenance to
predictive and conditions based
maintenance
Provide analysis of over 190,000
signals and deployment of 800
digital asset models
Improve plant performance, reduce
unplanned failures, and enable
more efficient planned maintenance
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Predictive analytics will improve the plant
performance of Enel Green Power’s
hydropower plant fleet
41. EDF Group: Digitalization of Nuclear
Plants
Outage Management
Use of virtual reality for outage preparation
3D visualization for Plant Maintenance and Upgrade
IT Interfaces for collaboration in outage between Outage Control
Center, work sites, mobile workers
Human Performance in Operations
Plant field workers mobile technologies
Computer based procedures, Electronic Work Packages, App store
Computerized operator support systems
Augmented reality to improve situation awareness
Cybersecurity control
Advanced Training (video, knowledge capture)
Advanced Controls, Automation, Digital Architecture
Rapid Prototyping for I&C Modification & Qualification
Advanced Video Processing for Fuel Reloading Surveillance
Online Equipment & Process Monitoring
Wireless Sensors
Fleet Monitoring & Early Failure Detection
Remote Field Access to Process Data
Digital Twins for O&M
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Digital models or “twins” help
plant personnel make critical
operational, business, and
maintenance decisions.
42. Transmission & Distribution Asset
Management
Real-time situational awareness of generation, transmission,
distribution assets
Operational staff manage data, as much as assets
Network of sensors, drones, cameras, and other services provide
continuous steam of data on status and performance of power
plants, lines, towers, substations, transformers, poles, etc.
Dynamic visualizations display statistics from load to moisture,
voltage, current, fuel and water input, etc.
Analytics with AI and machine learning cut costs of asset
inspections
Digital twins of asset base apply real-time data to help predict
and identify failures
Build 3-D models and data from aerial surveys to understand
health and status of vegetation around power grid
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43. Endeavour Energy: 3D Model for
Vegetation Management
Built a three-dimensional model
of its entire power grid and the
physical items surrounding it,
including trees and other objects
that may cause obstructions
Combine model with input data
from aerial surveys to
understand current landscape of
vegetation management around
the power grid
Enables better identification of
risks and pre-emptive vegetation
management
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44. Florida Power and Light: Smarter Energy
Infrastructure
Florida Power and Light has installed more than 5 million smart
meters and more than 90,000 intelligent devices including automated
feeder switches, automated lateral switches, and fault current
indicators among others
Automated switches kept more than 30,000 customers from losing
power during Hurricane Hermine in 2016
Drones assessed damage of infrastructure to assist restoration
Restoration completed in less than 24 hours
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45. Toronto Hydro: Network System
Monitoring & Control
Network System Monitoring and Control Program
Equip existing assets with sensors and install vault
monitoring hardware
Install fiber optic communication infrastructure to
allow for communication between distribution assets
Will allow for remote monitoring and control of
secondary network equipment assets in real time:
Distribution Grid Operations will be able to live monitor
assets and receive instant alarms if issue arises at the
network vaults.
Asset Management group will be able to trend asset
conditions over the life of the asset (e.g. load, oil
temperature and level) to anticipate any issues that
would not otherwise be apparent.
Program is in implementation and testing phase,
with plans to finish the commissioning of all core
network vaults by 2025.
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46. Alectra Utilities: Automatic Isolation
and Restoration Tool
Alectra Utilities installed a new triage
tool on a major part of its distribution
system to help with power restoration
The “automatic isolation and
restoration tool” is designed to
pinpoint the source of the outage
automatically
The tool:
Isolates the section of the grid that is affected
Sends a signal to nearby power lines to
reroute power
Begins work to fix the failure
Benefits:
Reduces the search time and cost to
determine location of equipment failures
Reduces overall outage time and
inconvenience to customers
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Alectra’s tool reroutes power around component
failures to reduce customer inconvenience during
restoration.
47. UK Power Networks: LoadShare Trial
Smart Wires technology intelligently and
instantly routes power through the cables
which have available capacity, maximizing
the use of the existing network
Freed up 95 MW of network capacity
Year-long trial has already saved
customers £8 million and enabled
renewable power to safely connect to a
previously constrained point in the local
electricity network
UK Power Networks plans to deploy the
technology in other areas to
accommodate even more renewable
energy generation at a reduced cost to
consumers.
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48. EDP Brasil: Transmission Project
Management
EDP Energias do Brasil digitized the
management of its power transmission
projects using a cloud collaboration
software
The platform, Colaborativo, integrates all
stakeholders (e.g. suppliers, customer,
technical auditor and government
agencies) involved in the transmission
projects in a single interface.
Gives EDP visibility, control and agility to
approve and oversee processes.
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49. Employee Experience
Employees work enabled by digital experiences
Performance and learning and development
measured in real-time
Most processes are automated, freeing employees
from routine, and sometimes dangerous, tasks
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50. Manitoba Hydro: VisualSpection
Manitoba Hydro’s augmented reality platform,
VisualSpection, is used during asset inspections and
maintenance, leading to:
Increased efficiency and safety for workers
Reduced costs and enhanced reliability for customers
Information can be collected and projected into
user’s line of sight with a heads-up display, allowing
user to see things otherwise invisible to the naked
eye (e.g. property lines, new transmission line
designs, culturally sensitive areas).
Hands-free technology allows the user to easily
perform inspections, trainings, repairs, installs,
maintenance, and troubleshooting.
VisualSpection can help complete inspections in a
third of the time versus conventional tablet-based
planning.
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51. Pacific Gas & Electric: Mobile Asset
Inspection Application
PG&E set up a digital center of
excellence and implemented design
thinking for solutions
Sent digital specialists to shadow
electricity and gas field workers
Uncovered ways to aid their work
Led to a mobile application to help
field crews complete asset
inspections more efficiently and
safely with real-time information
Provides a digital map with
customer data and location of
assets in need of repairs
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Mobile Asset Inspection Application allows PG&E field
crews to easily locate and inspect infrastructure
throughout California
52. Ontario Power Generation: AI for
Nuclear Plant Outage Scheduling
Annual planned maintenance outages for
OPG’s nuclear facilities require scheduling
20,000-25,000 individual tasks – requires
significant manual time
OPG’s Outage AI solution focuses on
predicting logic ties for tasks, creating the
initial version of the schedule with all the
tasks pre-populated
Outage AI is a custom-built cloud-hosted
application that integrates into OPG’s
existing IT infrastructure and leverages
elements of AI, machine learning, natural
language processing (NLP), and intelligent
automation
Currently uses eight years’ worth of past
outage data to create schedule predictions,
and will continue learning from upcoming
nuclear unit outage schedules.
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The Outage AI solution creates new dummy tasks
for a current schedule (left) based on work-orders
from historical schedules, with task-matching
based on natural language processing (right).
53. Customer Journey
Digitalization enables customers to have a personal
relationship with their utility
Utility provides a “smart home platform” accessible
through phone, laptop, tablet, smart speaker
Platform delivers a personalized, data-driven
customer experience in real-time
Services including home energy management
enabled by AI, new transactions, and beyond
electricity services
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54. Hydro Ottawa – Smart Speaker Skill
Provides personalized information
to customers through smart
speakers (Amazon Echo or Google
Home)
Customers can receive information
on:
Current electricity rate or time-
of-use period
How to reduce electricity usage
and lower bill
Find out about current power
outages
Ask questions about the
electricity bill
|54
Hydro Ottawa smart speaker skill provides
customers personalized, timely, and easily-
accessible information regarding their electricity
usage
55. KEPCO – Virtual Power Plants
Korea Electric Power Company (KEPCO)
announced a partnership with Power
Ledger to trial peer-to-peer renewable
energy trading in Japan
Intent is to use platform to support
development of virtual power plants
where consumer-owned generating
and storage capacity can be used to
support local energy demand
KEPCO will share meter data from
participating homes and leverage the
Power Ledger trading platform to
facilitate and monitor energy trading
between participants
Goal is to increase incentive for
development of DERs and demonstrate
benefit of peer-to-peer trading
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56. Tokyo Electric Power Company – Elderly
Care Plan
Developed a program leveraging
energy disaggregation technology
A new service provided by retail
sales subsidiary, TEPCO Energy
Partner
Differentiates load signals from a
single utility meter out into
appliance-specific data using
sensors and algorithms
Appliance-specific data sent to
customers through a mobile
application to assess any behavioral
anomalies by usage patters and to
monitor changes in usage over time
|56
The Elderly Care Plan leverages energy
disaggregation technology, real-time
data, and mobile applications to create a
new service for customers
57. EDP- EV.X Mobile Application
Created a mobile application to
education customers on the
benefits and opportunities of
electric vehicles
EV.X application uses behavioral
analysis and real-time data to
provide users with targeted and
data-driven information on benefits
of EV adoption
Supplies users with financial savings
and carbon reductions that they
could capture if they were to drive
an EV
Provides information on location of
charging stations along routes
|57
The EV.X application provides EDP customers with
real-time data-driven information on the benefits
of switching to an electric vehicle.
58. Barriers to Digitalization
Comprehensive transformation? Not yet
In the United States – moderate level of digitization
Significant potential to deepen digital engagement
1. Working methods of typical utility company built
around safe-guarding large, long-lived assets and
minimizing operational risks
2. Perception of utilities as “analog-era” companies
makes it hard to attract right digital workforce
3. Utilities have complex legacy operations (and legacy
mindsets) that inhibit innovation
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Source: McKinsey. The digital utility: New challenges, capabilities, and opportunities.
https://www.mckinsey.com/~/media/McKinsey/Industries/Electric%20Power%20and%20Natural%20Gas/Our%20Insights/The%20Digital%20Utility/The%20Di
gital%20Utility.ashx
59. Accelerating Digital Transformation
1. Adopt digital ways of working
Gain support of senior leaders
Build a digital factory to produce new applications and
insights
2. Attracting and retaining digital talent
Highlight the intellectual challenge and social value of the
utilities work
Tap into broad pool of digital specialists who value balance
and stability utility offers
3. Modernize the IT architecture and environment
Simplify the utility’s products portfolio and business
processes
Shift to modular IT architectures
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Source: McKinsey. Accelerating Digital Transformations: A playbook for Utilities
https://www.mckinsey.com/~/media/McKinsey/Industries/Electric%20Power%20and%20Natural%20Gas/Our%20Insights/The%20Digital%20Utility/The%20Di
gital%20Utility.ashx
60. Key Leadership Questions
How can we be different in a digital world?
What are our competitors doing?
What are companies/organizations doing outside of
our industry that we should think about?
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