by Oscar van den Berg and Nigel Barnes, Accenture
Big data that ranges from social media to real-time operational information is permeating the business environment–utilities included. Internally, a business’s effectiveness in engaging and leveraging talent is increasingly determined by how well it manages the social capital in its work force. Externally, call centers are being supplanted by communication with and between consumers on Facebook.
For utilities, these trends reflect and contribute to a flood of real-time data that ranges from customers’ online comments to automatic alerts from remote sensors. The rollout of smart grids means this data deluge is potentially greater in the utility sector than any other industry. Utilities that apply sophisticated analytics to transform this information into actionable business intelligence will become the industry’s high performers.
Utilities that seek to lead in generating value from customer and operational data also are identifying a further imperative: cloud computing. Data management and analytics to this scale are only feasible by leveraging flexible, scalable, pay-per-use access to massive storage and processing power. Cloud computing is a natural fit for big data analytics that require supercomputer-type capabilities. This will open the way for utilities to manage data and analytics related to operational and social networking, enabling better, faster and more responsive decisions in areas from network outage prevention to dynamic customer tariffs.
Getting Social With Customers
The first signs of these changes are clear as utilities move to position themselves as social media-enabled organizations that engage in constant, close, two-way interaction with customers. Some utilities have connected customer services to social media to improve satisfaction and project a tech-savvy image.
Several U.S. utilities, including Pepco Holdings Inc. and Baltimore Gas and Electric Co., use Twitter and Facebook to inform customers about outages and crisis communication plans. BC Hydro’s Facebook page includes customer forums on issues such as smart metering, advice on what to do during an outage and a “Save like Steve” challenge for conservation-conscious consumers. TXU Energy Retail Company LLC offers “TXU Energy in Your Community” links to donate to TXU Energy Aid and videos of donors. And Dominion Virginia Power has more than 16,500 Twitter followers for its latest news and community events.
As Figure 1 illustrates, a 2011 study showed that about one-third of utilities were using social media to engage with customers. More surprisingly, nearly 40 percent were not. The proportion that ignores social media will decline rapidly as social networks strengthen their grip as consumers’ favorite channel for communicating with their utilities, and also for discussing their utilities’ service quality with other customers.
And for utilities that want to build a social presence, Accenture Retail and Business Services for Utilities research shows that one-way messages are not enough. To engage consumers, energy providers must offer a range of social capabilities including service convenience, access to exclusive offers and online communities built through social media.
Further evidence of the rising power of social media for communication with and between utility customers was provided by Superstorm Sandy in October. At the height of the storm, postings onto Facebook’s photo-sharing app Instagram were running at 10 photos per second, and Facebook and Twitter became the main channels people used to let friends know they were safe. More significant, social networks also were key to utilities’ real-time customer communications on the severity and duration of power outages.
From the industry’s viewpoint, these social communications do more than alleviate customers’ immediate distress. Social communications let utilities play a positive role in enabling consumers to understand evolving situations and plan for the length of outages, and they also build long-term engagement and loyalty. If power is restored at the local hospital before residential homes, then it’s valuable to explain this to customers.
Understanding Customers Better “
Equally important, the communication during and after Sandy also flowed the other way. Customers informed utilities in real time about local conditions and outages, which helped utilities mount the right responses. This highlights a further game-changing impact of social media and cloud: a better understanding of what customers are saying, which can be enhanced by analytics-driven segmentation and targeting.
This trend has two aspects: One is a rising tendency for consumers to use social media to contact and seek information from their utilities. In response, many utilities are reshaping their customer relationship management strategies. They’re moving away from traditional phone-based call centers and toward online and mobile social contact centers.
” by Joining Their Conversations in the Cloud
To harness the full potential of social media, some utilities are going further–tracking what is said about them on social networks and in the blogosphere or leveraging the data consumers share on social networks. Harvesting this disparate, unstructured, third-party data and applying analytics to it can enable utilities to head off issues before they become problems and take proactive steps to keep customers happy. Utilities also can use the information to join customers’ conversations, better design the service experience for specific groups, and deliver targeted offers that appeal to particular groups of consumers.
The scalability and flexibility of cloud computing makes it ideally suited to such applications, and new cloud-based tools are emerging all the time. Examples include the Firehose service through which Twitter sells access to the huge stream of tweets that flows through its ecosystem every day, enabling companies to track how they are perceived.
And cloud-based social media and analytics enable utilities to drive internal and external online collaboration and innovation through techniques such as crowdsourcing. The industry also is seeing more use of cloud applications such as salesforce.com. As the accompanying sidebar describes, Accenture recently helped Schneider Electric implement a salesforce.com-based solution to sharpen its focus on customers.
Cloud Analytics, Operations Management
Cloud-based analytics should have equally game-changing impacts in utilities’ operations. To support smart grid and meter network rollouts, utilities are seeking to integrate information technology and operational technology while focusing on data-intensive distributed intelligence and temporal and spatial visualization and decision support. As more information flows from thousands of smart devices across the grid, the deluge of data on the operational side is as dramatic as that from customers.
The ability to turn this flood of operational data into business intelligence that supports better decisions and more responsive network management will be a major future differentiator for utilities. A recent experiment conducted by Accenture Technology Labs (see sidebar) verified the applicability of cloud-based analytics for producing the necessary business intelligence in smart meter environments. Such findings suggest that utilities will increase their adoption of cloud-based operational analytics in the next few years to produce business intelligence that is more timely, accurate, relevant, comprehensive and reliable than ever before.
Uniting Customer, Operations Management in the Cloud
As utilities develop and refine their strategies for managing the twin deluges of data from customers’ social media and smart grids, the next step is becoming clear. Although these complementary data streams might have emerged from different places, they demand sophisticated and powerful analytics to realize their value. By converging and integrating their customer and operational data and applying analytics across the merged dataset, utilities can optimize and coordinate their management of the customer and operational domains within a single cloud-powered analytics environment.
Where could this lead? Other industries provide pointers to the future. Automotive manufacturers are building social networking capabilities into their cars. For example, Toyota has collaborated with salesforce.com to offer Toyota Friend, a private social network that allows Toyota car owners to connect with their electric vehicles and enables the car to send an alert when its battery needs recharging, according to the mashable.com article “Toyota Owners to Get a Private Social Network.”
Given such developments, it might not be farfetched to imagine consumers would appreciate a similar ability to connect via social media with their electricity meters, which would enable them to track usage and costs remotely in real time and manage domestic appliances to conserve energy. The same social network would be an ideal channel for utilities to manage customer relationships, interactions and tariffs. Third-party vendors such as Tendril and Simple Energy Inc. are developing cloud-based platforms to enable social comparisons and energy usage analysis. All of the customer information and feedback would supplement the smart data generated from the network to help manage the operational issues and upgrades more responsively–all supported and enabled by cloud-based analytics.
This future is already taking shape. For example, a large U.K. electricity provider soon will have its smart meters plugged into AlertMe’s energy-monitoring service, which takes readings of energy use every 30 minutes and provides ways to draw insights from the information. The aim is to reduce use, cut carbon emissions and help consumers save money–providing the benefits of big data to ordinary customers in their own homes.
The utility of the future will be a data-rich organization. Utilities that harness the power of the cloud to gather, integrate and analyze their big data will put themselves in position to be tomorrow’s industry leaders.
Helping a Leading European Energy Management Solutions Provider Move to a Customer-centric Model in the Cloud
To sustain its expansion plans and enhance collaboration across its business, a billion-dollar company asked Accenture to help it deploy a single CRM solution worldwide, based on salesforce.com’s suite of cloud-based CRM applications.
Within a tight 18-month timeframe, the Accenture team helped implement the solution to more than 27,000 users in 85 countries. Today, the solution has given the company a 360-degree view of its customers and a high level of collaboration among its business teams. The outcome: A valuable return on investment with more than 20 percent of cross-selling, more than 20 percent of account coverage and a 70 percent adoption rate.
Vindicating Cloud in Smart Grid
Accenture Technology Labs set out to solve a key information technology challenge many utilities face: how to develop a platform for getting valuable, actionable intelligence quickly and cost-effectively out of a mass of meter data. As smart meter deployments grow, so does the opportunity to generate competitive advantage from analytics. Yet traditional databases and systems often are hampered by high costs, low scalability and poor analytics capabilities.
Taking a series of more than 1 million meters and about 10 terabytes of data, a specialist Accenture testing team conducted an experiment to show whether a cloud-style platform based on commodity-type servers could meet smart grid analytics’ needs more effectively than traditional systems. The results showed the cloud solution was able to perform queries and analytics on large data sets with acceptable latency, much higher scalability and at sharply lower costs. It also equaled or outperformed a traditional relational database based on specialized hardware.
Oscar van den Berg is a managing director in Accenture and the cloud technology lead for the utilities industry group. He leads a team that helps utilities develop and deploy their cloud strategies to support business initiatives and achieve higher performance.
Nigel Barnes is a managing director in Accenture’s resources operating group and the architecture, development and integration platform director for Africa, Europe and Latin America. He focuses on developing innovative Accenture assets and solutions and works with clients in designing and implementing their information technology architectures.