Emergence and transformation of digital utilities in the “smart” era

Emergence and
Transformation of Digital
Utilities in the “Smart” Era
Jonathan D Loretto, Michel van Zutphen
Oracle Open World 2013

2Copyright © Capgemini 2013. All Rights Reserved
Emergence and Transformation of Digital Utilities in the “Smart” Era | Sept. 2013
Agenda
 The Emergence of the Digital Utility
 Reinventing the Digital Customer Experience
 Illustrative CX examples
 Oracle CX
 Conclusion

Digital transformation of global corporations is driven by
outside-in changes
where innovation appears faster at the far reaches of the organisation
digital, cloud-based services provide new opportunities for
agile global platforms through centralised management
digital transformation offers a different paradigm for
global IT organisations and new prospects to be grasped

The digital generation is setting expectations on global
corporations and driving demand for digital transformation
The digital consumer
drives outside-in
transformation
Agile digital
platforms exploit
federated services
The realisation of
benefits needs to be
weeks not years

The digital consumer drives a need to transform outside-in
versus inside-out, to drive speed-to-benefit and to reduce costs
Customer Focus
 Consistent customer experience
 Multiple channels and devices
 Immediate 360 view of customers
 Agile response to new demands
 Proactive creation of new offers
Corporate Focus
 Re-use system investments
 Align old and new worlds
 Consistent processes and data
 Central governance & security
 Cost efficient operation
Inside-Out for stability
and integration
Outside-In for speed
and flexibility
Digital
Enterprise

Technology-enabled initiatives in:
• Customer Experience
• Internal Operations
• Business models
• Core digital capabilities
Leadership capabilities including:
• Vision
• Governance
• Engagement
• IT-Business Relationships
• Change management
Digital leaders exhibit two common traits: Digital
Intensity and Transformation Management Intensity
Digital Intensity
Transformation Management
Intensity

This is not for us!
Beginners
Building the Digital Advantage….Digitalintensity
Transformation management intensity

digital
This is not for us!
digitaldigital
digital
digital
digital
Beginners
Fashionistas

digital
This is not for us!
digitaldigital
digital
digital
digital
Analogue Transformation
Beginners
Fashionistas
Conservatives

digital
This is not for us!
digitaldigital
digital
digital
digital
Analogue Transformation
Digirati!
GROWTH + 9 %
PROFIT + 26 %
MARKET VALUE + 12 %
Beginners
Fashionistas
Conservatives

Every Industry has Digital Leaders
“Utilities are in
great majority
conservatives"
“There is a great
consensus around
the transformative
potential of Digital
Technologies,
although with
limited hope for
significantly
increasing
revenue"

Digital Utilities Transformation: Driving value from
the smart energy infrastructure
SMART RENEWABLESMART CONSUMERSMART GRIDSMART METERING
ELECTRIC
VEHICLES
PHOTO
VOLTAIC
SMART
DEVICES
HOME ENERGY
MANAGEMENT
DIGITAL
ASSETS
SMART
METERS
BUSINESS AS USUAL DIGITAL ENABLED BUSINESSDIGITAL UTILITIES TRANSFORMATION
CLOUDMOBILITYBPMS BIG DATA
Technology Advancement & Consumer pull
Energy transition
Service Improvement & Cost Saving Pressure

Agenda
 Oracle CX
 Conclusion

With the developments such as smart meters, utility
customer‟s needs and expectations are higher than ever
Improve Customer
Relationship
 Better understanding of
customers
 Billing on actual usage
 Better responsiveness for the
interventions
 Improvement of existing
services
Diversification of offerings and
services
 Tariffed offering differentiated
according to fixed or variable periods
 Be informed when the tariff is higher
 Be able to act to generate savings
(even thinking about it)
 Compensation in case of load
shedding without a control system
Optimization & Financial
gains
 Decrease in the volume of claims
 Optimization of certain processes
 Reduction in the billing cycle
 Decrease in the fraud
 Reduction in the average cost of
supply
Smart environment raise the customer expectations with a right balance
between comfort and energy savings
While People are taking control of their energy consumption and automating their home,
Energy suppliers interacting with their customers in new ways
 Help them understand how they consume energy
 Help them reduce bills, while retaining their desired level of comfort
 Provide new services, such as micro-generation, storage and electric vehicle battery management
 Receive the request for load shedding by SMS or any other digital channels.
 Access to a web portal allowing a view of the load curve and a summary of load shedding

These changes have led to key business and
information challenges faced by Utilities
Business Challenges
 High cost to serve: phone channel still dominant; high call
volumes & low FTR
 Lack of Insights: poor data quality & analytics relative to
other industries means opportunities are lost
 SMART: large & complex requirements that requires focus &
investment
 Social media: accelerates the impact & frequency of
negative customer experiences by going viral
 Low NPS: Customers compare Utility experience against
banking, TV, mobile & broadband – not other Utilities
 Price: Managing customers‟ expectations around the
increasing price of electricity
 Low Engagement: Customers have been indifferent &
disengaged for Utility
 Sophisticated buyers: increasingly demanding consumers
want more for less
 Customers are forcing change and it aggravates Utilities‟
existing challenges and introduces new challenges
Information Challenges
 Limited Context
– Situation: Information is too generic for action
– Problem: Not made available in context
– Impact: Decline in resolution of issues
 Information is required in Real-time
– Situation: Information is too late for action
– Problem: No method to process events
– Impact: Limited operational responsiveness
 Actionable Information
– Situation: Information has no guidance
– Problem: No insight for next steps
– Impact: Increased cost to business
Consumer behaviour is undergoing on a major shift due to the
digital revolution

The new norm of Customer Experience in Utilities
“Utilities have analyzed data for many years, with spreadsheets and custom tools; mere
fraction of data generated by smart meters and IEDs have transformed the behavior of
customer , which now requires new ways / transformation in analyzing Customer behaviors to
provide insights which is delivered using DUT”
Multiple Channel
Communications
Customer
Segmentation and
Empowerment
Customized
Product & Service
for everyone
Smart Meter data
Analytics
Changing
Perception- From
Ratepayers to
Valued Customers
@
How can I provide
right service to
right customer
through right
channel?
Does he belong to
high temperature
geography and
might buy rooftop
Solar PV?
Kevin‟s job, work-
timings and
preferences very
different from his
neighbors
Smart meter, IHD
generate huge &
variety of data; how
can I have
actionable insights?
How to win the
trust of my
customers & make
them feel special?

Digital transformation offers a different paradigm for global
IT organisations and new prospects to be grasped
Technology Architecture
• Connects omniChannel
to existing back office
investments
• Agile framework e.g. Plug
& Play, PAYG services,
in line with business need
Operating Model
• Spans governance,
ownership,
accountability,
organisation structure,
new ways of working
• Best of breed vendors
managed in an integrated
service framework
• Managed service
delivered to agreed SLAs
Commercial Model
• Utility pricing aligned to
business outcomes
• Pay as you go to reduce
upfront investment
Digital
Enterprise
Technology
Architecture
Commercial
Model
Operating
Model

...and is already adopted by Capgemini;
Immediate™ Framework.
Industrialisation
Costreduction
Speed
Value
Systems of Records
Systems of Differentiation
Systems of Innovation
Overall objective
Agile interaction layer
Robust application layer
Pace-layering distinguishes the robust application layer
and the agile interaction.
Speed
Value
Industrialisation
Costreduction

Agenda
• Lean energy retailer
• Energy efficiency
• Self-sufficient energy community
 Oracle CX
 Conclusion

Lean energy retailer in a competitive market
Business context
Business issues
• Competition and more in particular
new entrants, fuel a pressure on retail
prices
• Cost-to-Serve and cost-to-acquire
levels need to be lower to preserve a
healthy margin
• Differentiating offerings and good
customer service are required to win,
grow and keep customers
Revenues Total
Operational
Costs
OPEX
Energy Cost
(including costs and
charges)
Gross Margin
Operational Cost to
Serve
General Marketing
Costs
Distribution
Costs
CtA general
CtS general
Net Margin*
Full Cost to Acquire (CtA)
Full Marketing Costs
Full Cost to Serve (CtS)
Operational Cost to
Acquire
Operational Marketing
Cost
Transformation program
• Transform to a customer-focused energy retailer first focusing on optimizing the operational model:
 Standard products and services
 Lean & mean processes
 Aggressive financial steering & control
 Agile IT platform.
 And then get, keep and grow profitable customers

Lean energy retailer in a competitive market
Business transformation via layered IT-platform
Layered IT Platform
 Multiple Layers
Presentation – Process –
Integration – Transaction –
Data
 Service Oriented
Architecture
Application functionality
shared via services
 Combining build to
change, build to last
Web based portals. BPM for
flexible processes. ERP
systems in Back-end
1
CRM
Campaign management
Sales
Contracts
Employee Portal
Other
system
Datahub Other apps
Orchestration layer
Web Portal
Self Service
Portal
Datawarehouse
BAM
Reporting (tac & strat)
Marketing intelligence
AVAYA
CTI
IVR
Output management
document formatting & routing
ECM @
Mail E-mail Web
Other interfaces
Banking
General ledger
Social services
SMS
Central registers
Billing
Billing
Credit & Collections mgt
Consumption
Data Quality
Mkt.
Fulfillment
Meetdata bedrijf
UWL Top 10
transactions
Integration layer webservicewebservicewebservicewebservicewebservicewebservice

Energy Efficiency for San Diego Gas &
Electric - Business context
Objective and scope
• Provide customers with new insights,
convenience and practical support
for being more energy conscious
• Give SDGE a new channel for
interaction with customers through
marketing offers, goals and actions –
and links with the customer portal,
outage management and social
media
• Future extension for Demand
Response, Home Automation,
Electric Vehicle Management etc.
Home Energy Management is no longer an adjunct to
“Smart”, it is a key part of Digital strategy

Energy Efficiency for San Diego Gas &
Electric - Solution
• Goals and actions
• Tips and hints
• Compare vs weather
• Compare vs previous periods
• Customer offers
• „Ecoscore‟
Android
App
iOS App
Data Services
Transform Layer
Applications API
Access
Control
Visualization
Layer
Gateway Stack
AccessControl
Browsers
72
Premises Devices
Cloud Services
Gateway
Normalized Data
Warehouse
Enterprise & 3rd
Party Systems
Apps
 The SDGE PowerTools app has energy
consumption as its core information
 But the app also provides the opportunity for
interaction with the customer...
• YouTube videos
• Twitter feed
• Outage map
• Link to customer portal
(e.g. for mobile bill
payment)

Texel: self-sufficient energy community
Context
The island of Texel wishes to supply its energy needs entirely from local renewable sources in 2020
 Dutch island in the North sea
 165 km2 & 6,000 households.
 Industries: Recreation, Fishery, Agriculture
 Energy needs (year) Elektricity : 80 tWh, Gas 22 mio m3
Road map to a sustainability Texel 2020
 Community Energy Management: Cloud Power
 Urban solar (PV) projects
 Solar-farms
 Biogas digesters
 Biogas fired CHP (electricity and heating)
And in the orientation phase:
 Wind turbines
 Deep geothermal energy
 Tidal
TexelEnergie, a local Energy community
 Fulfils the community energy needs
 Sells, produces and buys renewable energy;
 Encourage and assist its members in the reduction of their energy consumption;
 Encourage and assist its members in the implementation of domestic power
generation - like PV-panels -;
 Contribute to the local economy on the Island of Texel.

Control
signals
Texel: self-sufficient energy community
Solution
Individual participants CommunityGrid company
Collective generation
Local
generation
Metering
Home Energy
Management
Electricity, gas,
heating, cold, water
Central Energy
Management
Interval readings Interval
readings
Interval readings
Interval readings
Energy advices
One-hour-ahead price-signals
(Real-time signals)
One-day-ahead price-signals
Smart Appliances /
Equipment
Household profiles
Control
signals
• Control appliances, smart plugs and lighting
• Inform occupant on the hourly prices (TOU)
• Home energy management (Home as a microgrid)
• Analyses of volumes
 consumption, production,
 exchanged energy with the community (grid)
 smart appliances, equipment and smart plugs
• Budgetary control and analyses
Smart Home
• Forecasting
• Balancing & Scheduling
• Execution & monitoring Energy program
• Deliver volumes and prices to Billing
• Analyses and generate energy advices
Virtual Smart GridSmart Metering

Agenda
 Oracle CX
 Conclusion

Capgemini‟s H-architecture for
Customer Experience
MultichannelExperience
Insight& Analytics
Personalized environment SocialMedia integration
CRM – Mark. &
Service
Autom.DecisioningeCommerce
Security
Integration and Orchestration
Meter Data CC&B EMS
HEMS
ESR Service
Delivery
NMS
Governance

The Oracle solution stack against H-model
MultichannelExperience
Insight& Analytics
Personalized environment SocialMedia integration
CRM – Mark. &
Service
Autom.DecisioningeCommerce
Security
Integration and Orchestration
Meter Data CC&B EMS
HEMS
ESR Service
Delivery
NMS
Governance
ACCESS MANAGEMENT
REAL TIME DECISIONING
CC&BMDM
NMS
WAM
Siebel
BPM BAM
MWM

Capgemini‟s Customer journeys in Oracle
• Social Media monitoring and Churn Management
• Focus on new digital channels (social media listening and response)
• Shift focus from selling commodity electricity and gas towards energy saving advice and
additional services
• Retention offers based on the retention budget/customer values
• Cross and Upsell additional services and products to existing clients
• Inform and update customers about all products and services and is able to sell them
• Enhancing the customer service experience
• Feature-rich web portal for customer service representatives
• Tailored offers and services
• Provide Energy Management advice
• Real time decision enablement
• Sign up for energy alerts services

Agenda
 Oracle CX
 Conclusion

The Key Messages
 Your customer’s expectations are changing
 Think digital when designing your customer journeys
 Digital is not just about customer experience
 The Digirati apply an integrated approach to digital
 Carefully consider your operating model before
embarking
 New techniques may be required [that are counter
cultural]
 Measure, measure, measure

Contact Information
Michel van Zutphen
Vice President and Global Technology Lead,
Digital Utilities Transformation, Capgemini
michel.van.zutphen@capgemini.com
Jonathan D Loretto
Chief Digital Evangelist
Digital Services North America
Jonathan.Loretto@capgemini.com

www.capgemini.com
The information contained in this presentation is proprietary.
Copyright © 2013 Capgemini. All rights reserved.
Rightshore® is a trademark belonging to Capgemini.
About Capgemini
With more than 125,000 people in 44 countries, Capgemini is one
of the world's foremost providers of consulting, technology and
outsourcing services. The Group reported 2012 global revenues
of EUR 10.3 billion.
Together with its clients, Capgemini creates and delivers
business and technology solutions that fit their needs and drive
the results they want. A deeply multicultural organization,
Capgemini has developed its own way of working, the
Collaborative Business Experience™, and draws on Rightshore®,
its worldwide delivery model.
Learn more about us at www.capgemini.com.

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