Making Sense of Big Data is the Big Challenge for Utilities

Advanced technologies and access to so-called “Big Data” have transformed the world’s landscape and every industry imaginable along with it. Look no further than the CSC Global CIO 2014-2015 Survey, where 590 global technology executives provided insight into their Big Data investments. It found that 64 percent of IT leaders across all industries are investing heavily in Big Data, and 70 percent of respondents felt their Big Data investments positively impacted business innovation.

The ways in which the digital age has revolutionized everything from health care and farming to retail and shipping has been closely documented, yet rarely do consumers hear about changes being made to the utility sector–essentially the invisible backbone of communities across the country and around the world.

While the broader utility industry ecosystem has welcomed technological change over the course of the past 25 years, adoption of Big Data has been slow. Investor owned and municipal utilities should be excited by the opportunities Big Data provides, just as the world’s tech leaders are. The potential impact is immense given the wealth of information available to utilities, but few have been provided with the necessary information, or technology to fully understand how to properly, and most importantly responsibly, unlock the value of their data.  

Making Sense of Your Data

Collecting customer usage data is easy; the industry has been efficiently doing this for decades, but making sense of it is not. Often data exists in disparate systems and departments, across endless spreadsheets and even buried within filing cabinets, making accessing vital information and making sense of it nearly impossible. What’s more, utilities often have just half the story–lacking the necessary customer demographic information needed to thoroughly understand a household’s history and needs–therefore limiting the opportunity for real insights.

Utility companies should look outside their usual confines to address challenges presented by Big Data. Leaning on existing resources and personnel to centralize data, standardize collection, develop a strategic plan for the data and execute against it, is not always feasible for lean, and often budget-strapped cities or utilities.

Securing partnerships with technology and analytics-driven organizations experienced in analyzing customer data and improving the efficiency of operations using data can be the answer to many utilities’ Big Data woes or aspirations. Working closely with third-party data providers can also help fill important gaps when it comes to thoroughly understanding a customer.

Putting Data to Good Use

Data is playing an increasingly crucial rule in utilities. Turning data and analytics into competitive benefits, improved efficiencies and customer-facing advantages should be a key priority to all utilities and municipalities. Perhaps the most valuable aspect of leveraging Big Data for utilities is the potential it holds for customer segmentation and personalization.

We all know the frustration that stems from receiving a targeted advertisement that fell short of actually understanding our own needs, interests or concerns. Whether it’s a flood insurance pamphlet when you live miles from the water or incessant Facebook ads selling new windows when you replaced yours last year, at times it seems these information databases have gone haywire.

With the access available to utilities and municipalities, coupled with the influx of external data and responsible third party partners that can help manage it, utilities should challenge themselves to tap into analytics and insights that allow for granular segmentation to help better serve their customers.

By leveraging consumer data, utilities can personalize messages and offers based on a customer’s service history or specific needs gleaned from a variety of factors. At HomeServe, our data team has determined from our databases particular issues related to the year a home was built and the area in the county in which it is situated. For example, we know based on our service plan claim rates that homes built in the south in the 1920s-30s and also during the 1980s have a very high incidence of water line problems. Other areas of the country have water lines that are significantly more expensive to fix due to the depth of the lines and the materials used. Using this information enables us to better inform customers as to which services require their attention, and for us to know in advance the likely usage rates of the service plans they purchase.  This insight combines into better more suited product offers for our customers.

Advanced customer segmentation also prevents customers from inappropriately being targeted for a service that may no longer be needed. We have had success in presenting plans to energy utility customers on the ten-year anniversary of their water heater being installed in their home, utilizing technician and repair data that had been warehoused for many years. Referring to the specific date of installation within the marketing material proves a powerful purchase trigger and is a good example of using data to get a relevant message to the customer at the right time.

Embracing new methods, advanced technologies and Big Data that enable improved targeting and measurement can have a major impact on messaging and marketing efforts and in turn, program success or your bottom line. Utilities that opt into a more deterministic marketing approach driven by Big Data have the opportunity to optimize return on investment, while precisely measuring outreach effectiveness.

With More Information Comes Greater Responsibility

The Information Age has also brought upon us new security challenges. As businesses have grown more excited for the tremendous impact Big Data can have on their industry segment, consumers have become increasingly concerned about the security and privacy of their personal information. This dichotomy has created complex challenges for businesses spanning industries around the world, and utilities are no exception.

My colleague Kenya Soares, Chief Information Security Officer of HomeServe, recently remarked in Electric Light & Power that “With more information comes a greater need to secure the data, and that security requires more dedicated resources and manpower.” Her point deserves reinforcing: as customer-focused businesses, it is critical that utilities and their partners evolve as technologies advance and consumers change, to ensure they meet the necessary standards of information management in this day and age.

There will always be risks associated with the storage and sharing of information, however, there are a number of best practices utilities and their partners should follow to ensure the personal information of customers is securely protected.  Investment in next generation firewalls, both at the perimeter and within the business, to protect sensitive data areas is essential, as well as ongoing threat and vulnerability scanning, notification and management processes. When sensitive data is stored and transmitted, strong cryptography & restrictive access controls are a must.

 In addition to investment in technological safeguards, utility companies should conduct information security awareness training for all employees that work with customer data. At the same time, it is also vital to ensure third parties and partners that may have access to elements of customer data are vetted regularly to ensure they adhere to the same security practices, safeguards and standards as the utility company itself.  In the digital age where technologies change and evolve ever more quickly, it’s essential to stay abreast of changes in data protection, cybersecurity & emerging threats to keep customer information secure.

Utilities provide a service that’s vital to the well-being of consumers across the country, and they are expected to deliver that service reliably, affordably and safely. Big Data and analytics has the power to transform the business processes of utilities, while significantly enhancing the level of service provided to customers. By collaborating with strategic partners that can integrate data into every step of the business cycle–from operations and customer service to marketing and measurement–utilities can thrive amid challenges, taking full advantage of the valuable opportunities provided to them by the digital revolution.

About the author: Patrick O’Donnell is the Vice President of Database Marketing at HomeServe USA. He trained as a statistician at a number of UK Government departments before moving into the field of marketing insight and analytics, in which he has 15 years’ experience. In his role at HomeServe he is responsible for marketing data, analytics and reporting to support the business’s marketing plan and for driving increased profitability by providing a deeper understanding of HomeServe’s customers and prospects.


Previous articleOklahoma gov wants wind power tax
Next articleU.S. consumer spending on electric power drops in 2016
The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

No posts to display