Roadblocks to Digital Transformation for Utilities
How can we avoid $2 Trillion of Waste?
One of the questions we are most often asked at CustomerMinds is why our digital transformation platform is called Which50? Believe it or not the answer is more than 100 years old…
This year marks the hundredth anniversary of the death of the great marketing pioneer John Wanamaker who apparently said, “Half the money I spend on advertising I spend is wasted; the trouble is I don’t know which half”.
When we think about how service organisations today must look after their customer, it is about so much more than just advertising or marketing and we like to modernise that phrase to fit the digital customer experience requirements of the 21st Century:
“I know that 50% of my digital transformation spend is wasted, I just don’t know Which50!”
The level of this waste can be pretty scary too as according to a Boston Consulting Group study from 2020, only 30% of digital transformation projects succeed in meeting their objectives. As IDC forecasts that global spending on digital transformation will reach $3 Trillion by 2026. That definitely adds up to a lot of wasted spend and effort in the other 70%!
So what can Utility Companies do to prevent that level of digital transformation waste over the next three to four years?
Doing nothing is clearly not the answer so finding the right partner with the right technology is key to the success of a digital transformation project. Having worked for many years on digital projects across the banking, telco and utility sectors we often find the same digital transformation challenges or roadblocks get raised at the outset. The danger is that these barriers can create so much concern and delay that they become the reason not to do anything, to stick with paper and postage or leave customers waiting on hold for an agent in the contact centre. In our experience, the three most common challenges on the road to digital transformation are the following:
Digital Transformation Challenges for Utilities Providers:
- Lack of digital contact details
- Legacy platforms and data silos
- Data privacy & security risks
1. Lack of Digital Contact details
One of the key digital transformation challenges that many utility providers claim is slowing progress is that they don’t have accurate or up-to-date digital contact details for their customers. This is particularly challenging in the water sector where customers may have moved into a house and ‘signed up’ for the service many years ago when all customer communication was handled by traditional letters. In the past, there was probably an argument to say that customers who had not provided an email address or mobile number did not want to be contacted digitally, but that situation is changing as consumers become more aware of the environmental and cost benefits of paperless communications. In fact, according to Utility Week, 73 per cent of utilities customers want more digital options to interact with their provider.
As consumers become more accustomed to using technology across all aspects of their lives, it is important for utility providers to offer them the digital option – even if they have to start by asking them if they want to engage digitally in a letter! By adding a QR code to every printed communication that is sent out to the customer you can nudge them gently towards the digital engagement route. It may take a while to get some customers to scan the code and enter their details, but it literally costs nothing to ask!
At the same time you can run digital campaigns that are promoted on all media to encourage customers to switch to digital communications. If you are trying to reach customers digitally but find that the message is not getting delivered, then your digital platform should be able to identify all of those ‘bounced’ contacts. Then you can reach out to them on a different channel to ask them to update their details.
2. Legacy Platforms & Data Silos
The next digital transformation challenge for utilities relates to the existing core systems that may not have been designed to handle two-way customer communication via digital channels. Even when the core system can trigger out an individual email or SMS message, it may struggle to handle the more complex digital journeys required for billing, collections and customer service. Often there may even be multiple different systems within the back-office of a utility provider with one platform handling Customer Care and Billing, another for Marketing and a third for Complaints, etc. All of these separate systems create data siloes that prevent the utility provider from having one centralised view of the customer and leads to the disconnected experience that many customers cite as the main reason for leaving their utility provider.
To overcome this digital transformation challenge for utilities providers, it is critical that you have a central communication platform such as Which50. Which50 can bring all of your customer data together in one place – even if it has to connect to multiple platforms via different data transfer methods.
For example, when we work with some of our major clients we typically have data feeds coming into Which50 from a number of different core systems. Whilst the more modern systems can typically connect via APIs, we still work every day with data from older systems that is transferred securely to-and-from Which50 via SFTP, Robotics and Manual file uploads. The trick really is to have a simple ‘plug-and-play’ capability for data transfer across a wide ecosystems of core business platforms.
3. Data Privacy & Security Risks
And the third key digital transformation challenge that is typically raised when utility providers are looking to go digital, is the one related to data privacy and data security. In recent years there has been a significant increase in customer concerns about data privacy and when you put these alongside the regulatory requirements of the utilities sector, it is perhaps the most significant challenge that must be overcome.
From a regulatory perspective, the arrival of the GDPR in 2018 placed a significant burden on all organisations to get their house in order in terms of how and why they used the customer data that they held. The requirement to gather consent from customers and to centrally manage both marketing and service messages can often be a challenge – particularly when the back office systems that we described earlier are disconnected and there is no central database or system of record that can be used to manage customer communications. Staff working on Data Subject Access Requests (DSARs) may take weeks to identify all of the communications that were sent to a particular customer if the messages were sent out from various different core systems and messaging providers.
Customers need to trust their utility provider and a secure method of digital communication is critical to creating and maintaining that trust – particularly when dealing with personal and regulatory information. By leveraging a true multi-channel digital platform, it is possible to deliver automated and secure customer communications that meets the requirements of both GDPR and sector specific regulatory requirements. For example, if you need to send a secure, personalised letter to your customers you can set up a multi-channel digital journey that sends a secure PDF as an attachment to an initial email. An automated process will then send each customer their personalised ‘one-time-passcode’ via SMS which is required to open the PDF. This whole process can be triggered by data transfers from the core system so that no human involvement (or stamps!) is required to send out the digital letters on a daily basis.
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