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The next generationof consumer-centric
utility
An EXL whitepaper
Written by
Vikas KumarAssistant Vice PresidentDecision [email protected]
Gautam PunjAssistant Project ManagerDecision Analytics
1 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Digital disruption has demolished 52% of the Fortune 500 since the year 2000.2 By 2020, the
number of online-enabled devices in the Internet of Things (IoT), such as RFID chips and
sensors, is expected to reach 50 billion.3 However, the utilities industry has not been able to
keep up with the growing digital needs of customers. Below given is a quick glance at the
technologies that will disrupt customer experiences expectations for utilities:
While some of these technologies are still in infancy, they will possibly disrupt every aspect
of customer experiences. Customers will demand far more from utilities and would expect
consistent, personalised engagement.
1 “Reaching 50 Million Users,” Visual.ly website, visual.ly/reaching-50-million-users, accessed 16 February 2015
2 Wang, R. “Ray,” “Big Ideas: Dominate Digital Disruption Before It Dominates You,” Constellation Research, 17 February 2015
3 Burkitt, Frank, “A Strategist’s Guide to the Internet of Things,” strategy& (formerly Booz & Company), 10 November 2014
The digital revolution is
causing the utilities sector
to fundamentally shift
their operating model.
The proliferation of digital
devices has changed
the way customers
want to interact with
service providers. There
was a time when digital
disruption took months
or years, but today this
happens in a matter of
days. The most disruptive,
viral technologies can now
reach 50 million users in
less than 35 days1.
Technology
Internet of Things (IOT)
Virtual Reality
Digital Wearables
CloudComputing
ArtificialIntelligence (AI)
Concept
A computing concept where every physical object will be connected to the internet and can communicate in an intelligent manner
A computer simulated 3D environment which can be interacted in a seemingly real way by an individual using special equipment
Accessories incorporating computing and advanced electronic technologies
Practice of using a network of remote servers hosted on the internet to store, manage and process data
Computers and computing software capable of intelligent behaviour
Impact on customer experience
Enables faster consumer insights Enhanced and personalised marketing campaignsEnables design of individualized products
Advanced way for consumers to interact with service providersRemote troubleshooting
Consumer-related marketing strategies like gamificationSelf-service anytime, anywhere
Cloud-based app alertsEnables integrated view of a consumerEnables smarter decisions
Virtual advisorsConvergence of self-service and assisted service
2 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
utility companies need to understand the
characteristics of future consumer. Given
below are three key characteristics of the
future utility consumer:
These characteristics will remain at the
core of next generation consumers.
However, the question is whether utilities
are prepared for the next generation of
consumers?
Future energy consumer characteristics
In the not so distant future, utility
companies will receive millions and billions
of data points from customer touch points,
presenting an opportunity to make a real
impact on customer experience. In order
to make better decisions to enhance
customer experience, utilities need to gear
up and build analytics capabilities to meet
the need of next generation consumers.
Otherwise, they risk losing them to in-
sector competitors or new market entrants
from other sectors.
Next generation utility consumersThe new generation of consumers won’t
see energy as a commodity, but will treat
it like other products. There is no doubt
that these future consumers would seek
more value, personalized services or
products and seamless experience across
all channels. To deliver such an experience,
Anytime, anywhereinteraction
Seamlessexperience
Actively buying andselling energy
Electric vehiclecharging/DERs
Demands newsolutions, morevalue
Alwaysinterconnected
OmniPresent Prosumer Tech Savvy
3 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Omnipresent
Customers are increasingly using mobile
devices. Consumers would become
omnipresent, always available across
mobiles, tablets, wearable devices,
social media, telephony, messaging and
web. With this ever growing increase in
channels, customers are exploring new
ways of interacting with the utilities. Below
is an example of a current utility consumer
who needs to interact with their provider:
With increasing penetration of digital
devices and wearables, consumers are
plugged in more than ever. Customer
expectations are being formulated by the
surrounding technologies. Soon, digital
wearables (VR headsets, smart watches,
Customer callsservice centre
Call centre agentbooks appointment
No self-service options/channelLimited booking channels
Long hold timeCall transfersInflexible dates and slots
SMS sent - Engineervisit date/slot
Customerfeedback
Email/SMS sent irrespective of customer preferred channel
IVR based surveyEmail feedbacksFew customers participate
4 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
tablets, smart TVs etc.) coupled with cloud
computing will disrupt the traditional
method of interacting with utilities. New
age utility consumers will require simple,
seamless, personalized experience across
all touch points. Below given is an instance
that shows how an omnipresent customer
would go about booking an appointment
for breakdown in near future:
Most customers would prefer to use
self-service channels rather than calling
customer service. Virtual reality would
enable customer service agents to engage
with customers and leverage the power
Virtual realityassistance
Appointmentbooking
Self service through VR assistMinor fixes and checks done by customer
Booking through smart watch application Enhanced functionality (Cancellation/Rescheduling)
Engineer visit Customerfeedback
Engineer location tracker (web, app)ETA functionalitySmart reminder
Feedback using social media Virtual communitiesHighly engaged consumer
Multiple engagement points
5 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
of 3D to help them do minor fixes and
resolve the issues. Customers would be
able to track the engineer’s location and
whereabouts. Furthermore, customers
would use social media channels to voice
their opinions.
Some of the key needs and expectations
of the next generation’s omnipresent
consumer would be:
• Consumers would want to interact with
energy providers anytime, anywhere
across preferred devices and channels
• Consumers would demand enhanced
self-serve functionality, consistent
experience and personalised treatment
across all channels
Unfortunately, utilities have not been able
to keep up the pace with consumers shift
to digital channels. This gap is only going
to widen with the proliferation of digital
devices in the future. To provide a seamless
experience across various devices and
channels, utilities need to overhaul
the traditional ways of interacting with
consumers. Some of the key challenges
faced by utilities are:
• Legacy systems and processes hinder
utilities from adopting digital technologies
• Lack of visibility into end to end customer
journey across multiple channels and
devices
• Siloed departments and platforms within
the organization
52% of utilities allow customers to pay bills online through utility websites, while 34% offer bill payment features on their mobile app.
4
4 http://blog.schneider-electric.com/smart-grid/2014/07/17/new-prosumer-microgrid-key-energy-flexibility-reliability-savings/
6 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Delivering an omnichannel experience
There are two key focus areas where
utilities need to make significant progress
and develop capabilities:
1. Increase the adoption of digital
technologies and leverage various
channels to enhance customer
experience
2. Leverage analytics to provide consumers
with a seamless interaction across
various channels
To design the next generation channel
strategy, it is crucial for utilities to
understand the consumer preferences
and behaviours across multiple devices
and channels. Most consumers would
prefer to opt for self-service channels
for the majority of low-value interactions,
interacting with customer service
representatives only in case of high value
interactions. Since customers would
expect a consistent experience across
these channels, utilities need to develop a
consolidated view of each customer.
Web
Social
App
Contactcentre
In person
Virtualreality
Changepreferences
Energyproductsshopping
Appointmentbooking
Switchingsupplier
Receive/pay bill
Givingfeedback
Promotionalactivities
Energyefficiencytips
Dat
a la
ndin
g a
nd u
nific
atio
n la
yer
Homemove
Engineeringvisit
Crosschannelanalytics
Customersegmentation
Textanalytics
Speechanalytics
Social mediaanalytics
Channelstrategy
Personalizedcomms
Best nextaction
Real timeresponse
Tailoredproducts
Virtualassistance
Next generation customer preferred channels for interaction Analytics applications Service delivery
7 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
This would require managing structured
and unstructured data on a real time
basis. Utilities can use big data analytics
to observe the flow of all customer
interactions and unify these at each
customer’s level. Several of the key
analytics applications include:
• Cross-channel analytical tools to
understand the key channels, devices and
paths customers undertake to complete a
journey. By analyzing consumer behaviour
across various channels, utilities can
formulate effective strategies and
understand the gaps by measuring fall
out rates across multiple channels
• Advanced customer segmentation using
customer interaction across all channels
including voice, IVR, web, social media to
identify the propensity of customers to
self serve, reaction to switching incentives
across channels, their channel usage/
preferences and designing solutions to
deliver personalized communications and
effective campaigns
• By leveraging real-time speech analytics
in conjunction with textual data from
web, utilities would be able to deliver
consistent and personalized customer
experience by creating context around
each customer interaction
As next generation consumers become
increasingly mobile and digital, they will
expect utilities to deliver on par with the
experience provided by other service
providers. Utilities will need to reinvent their
customer interaction models and create
integrated cross organization processes
to deliver seamless and personalized
customer experience.
8 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Prosumers
Traditionally, utilities have had a one way
relationship with consumers. However,
with declining costs of microgeneration
technologies and energy storage devices,
consumers are increasingly becoming
interested in varied distributed energy
resources, thereby becoming prosumers.
They are generating their own energy
to sell back to the grid or their peers. In
Europe alone, it is estimated that three
million energy users are generating some
of their own power.
It is expected that next generation
consumers would have the flexibility to
decide how much power they would
generate, whom they would sell it to and
for how much. Further, proliferation of
electric vehicles is creating a new breed of
consumers who would consume energy
at various places in varying quantities. This
would disrupt the traditional power delivery
models and would necessitate an entirely
different relationship between utilities and
prosumers.
Emerging Energy Cloud (Source: Navigant Consulting)
9 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Some key needs and expectations of next
generation energy prosumers would be:
• Prosumers would need greater choice –
capability to generate and sell power to
peers/grid and what type of power they
buy
• They would demand enhanced energy
management solutions and dynamic
pricing programs to save on energy costs
• Additional support services such as asset
maintenance, remote asset control for
DERs (distributed energy resources)
While there is a growing realization DERs
are changing the energy landscape, there
are a few challenges that utilities face:
• Uncertainty on the number of assets and
loads on the grid, which would make it
difficult for utilities to match the demand
against available grid capacity
• Calculating the value of each prosumer
and implementing dynamic pricing
• Stringent regulations prevent utilities from
innovating and designing next generation
products for prosumers.
10 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Delivering the prosumer experience
Next generation prosumers will demand
the choice for selling or buying power with
any consumer, just like how they can rent
homes on Airbnb. The shared economy
has already arrived in power sector.
Vandebron, a startup from Netherlands has
developed an online peer to peer energy
market place, thus letting consumers buy
electricity directly from any independent
producer. With a flat subscription fee of
about $12 a month, customers can get
onboard their platform and select the deal
that they are interested in. Customers have
the flexibility to select a supplier based on
energy source, pricing or location. They
receive energy through the national grid,
but from sources of their choice. This may
become something like an energy internet,
where anyone can buy and sell electricity
from/to anyone.
However, these setups don’t qualify as
a true peer to peer (P2P) network since
this is a connection between group of
unregulated suppliers with a network of
potential customers. What will really make
it a true P2P network is the adoption of
smart meters. Smart meters are capable of
knowing how much energy is imported or
exported and would enable consumers to
buy or sell power at competitive prices. It is
expected that once a P2P network evolves,
there may only be minimal involvement
from utilities, who might risk losing their
core business.
However, a P2P sharing economy doesn’t
mean that centralized power resources
will become obsolete. Rather, they will
complement DERs to provide consumers
with greater choice in terms of product and
price. Utilities can tap into shared economy
by providing complete home energy
ecosystems and providing consumers with
more choice and flexibility, guiding them
to lower their energy bills through smart
meter data. Demand response programs
and dynamic pricing will be at forefront for
delivering the next generation prosumer
experience.
11 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Demand response programs
Utilities of the future will have to cope with
increased penetration of plug-in electric
vehicles (PEVs) and DERs which would
upset conventional demand profiles of the
industry. The familiar equation of varying
supply to meet a predictable demand
will be a thing of the past as demand and
supply become dynamic. Utility companies
will need futuristic solutions for predicting
and responding to the varying demand.
Demand response will play an important
role in integrating variable sources
and loads into the grid and will help
consumers lower their energy costs.
However, being able to predict the
dynamic demand requires a lot more
than good load forecasting models.
Predicting the near real-time aggregate
power demand requires intelligent ways
of incorporating predicted demand into
advanced forecasting models. By mining
historical and real time data, utilities will
be able to get an accurate picture of
current and anticipated demand. While
a better demand prediction provides the
utility companies with effective ways of
addressing demand – be it managing the
sources or employing time of usage pricing
to flatten the peak – it aids consumers in
the form of better pricing and eventually
lowers the bills.
Auto demand response programs will
allow utilities to control loads like water
heaters and ACs at customer premises in
exchange for financial incentives. Utilities
will need integrated analytics solutions
encompassing detailed forecasting,
customizable DR programs, customer
portals and powerful demand response
analytics. This will enable next generation
consumers to produce and sell their
own energy, mitigate peak demand
charges and ensure minimal interruption
through pre-determined auto control of
their devices, which would all lead to an
enhanced prosumer experience.
Auto demand response programs will allow utilities to control loads like water heaters and ACs at customer premises
12 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Dynamic pricing
With distributed generation feeding into
the grid, advanced pricing models are
needed. Dynamic pricing models have
the potential to bring great benefits to the
consumers. With a growth in DERs, utilities
will need to know how valuable is the
energy produced by various sources of
renewable energy.
Time of Usage (ToU) pricing institutes a
price schedule for electricity usage, under
which electricity is least expensive when
loads are low and most expensive during
peak hours. ToU is based on the fact
that peak loads follow the same pattern
every day. By altering rates at different
times of the day, providers can incentivize
customers to adjust loads, either manually
or through home energy management
systems.
Critical peak pricing is a dynamic pricing
model by which utilities inform the
customers when loads are approaching
annual peaks and rewarding customers
who respond by reducing their loads.
In real-time pricing (RTP), utilities alter
pricing forecasts dynamically in varying
time intervals throughout the day,
reflecting real-time production costs to a
great extent. RTP requires customers to
have smart home energy management
solutions to respond to dynamic price
changes. Moreover, RTP is well suited for
grids with renewable sources like solar and
wind energy, as power outputs from these
sources are also quite variable.
The age of prosumers will present
a key challenge to utilities who are
accustomed to unidirectional relationship
with consumers. They would need to
manage new interdependent relationships
with prosumers. Demand response
management, dynamic pricing and
predictive asset maintenance will play
a key role in managing and exceeding
prosumer expectations.
13 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Tech savvyThe adoption of smart meters, smart
devices and other technologies are gaining
momentum. Utility consumers have
already begun to leverage technology for
complete home energy management and
automation.
In today’s world, customers are becoming
increasingly busy with a need to organize
their lives. Imagine a scenario where a
customer wakes up at 8:00 am in the
morning and the home starts its morning
routine of adjusting heating, setting lighting
and hot water preparation . Beyond just
learning consumer preferences, smart
homes will manage everything from energy
consumption to climate control. This is
a snippet of how connected homes of
future would help consumers in managing
their day to day needs. Next generation
utility consumers will expect everything
to happen automatically and seamlessly
in the background without them telling
anything.
Some key needs and expectations of next
generation tech savvy consumer would be:
• Next generation utility consumers would
want completely automated solutions
that would deliver convenience, control
and financial savings
• More personalized and self-directed
engagement through use of advanced
technologies
“The number of connected devices in the world will reach upwards of USD 25 Billion by 2020. By some estimates, this number might be closer to USD 100 Billion.”
5
5 Armstrong, L et al. (2014, July 17). Game of Homes. MaRS Discovery District.
14 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
While no single provider owns the
complete connected home value chain,
many technology giants have entered
the market with their connected home
offerings:
The reality is that companies are already
pouring in millions of dollars to develop
technologies that can integrate the digital
and physical world. While many service
providers are aggressively moving into
this market, energy providers will be most
preferred by consumers for providing
complete home solutions since smart
energy will be at the core of every
connected home. Utilities can leverage the
potential synergies between home energy
management and home automation to
provide end-to-end connected home
solution to consumers.
Google acquires NEST at $3.2bn which makes smart thermostats
Staples expands availability of home automation products to 500 of its stores
Samsung acquires SmartThings, a start-up on smart home platform
Connected homes & IoT hot topics at CES 2015
Apple launches HomeKit, a framework for IOS to connect with smart devices
Home Depot announces launch of new line of connected home devices
Qualcomm acquires CSR in order to improve its reach in IoT
Connected homes - Key developments in 2015
15 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
However, there are a few key challenges
utilities need to overcome:
• Managing a huge volume of data
generated by smart meters and devices
• Supporting an ecosystem of connected
devices
• Designing connected home products with
simple user interfaces, ease of usage and
easy installation
Delivering a smart home experience
Utilities already have a way into connected
home market with smart meters and
thermostats. Energy has become a
foundation for delivering new value
propositions. Energy that can be measured,
controlled and managed would be a key
component of the next generation smart
homes. There is already a device and that
allows consumers to measure the energy
consumption of individual appliance by just
holding the device up to a power cord. The
app calculates the power consumption
by measuring the electromagnetic field
generated by the appliances. This is only
a first step towards delivering complete
home energy management systems.
16 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
The consulting firm Navigant’s research6
predicts that the market will develop
along a fixed path from paper bills to
standalone home energy management
to complete automation. Complete home
automation would comprise of embedded
sensors, in-home displays, computing
power along with neural networks to
support all of it. This network will work
only when all devices become self-aware
and share data with other devices. The key
question is how can utilities differentiate
themselves from the competition
and uniquely position to support the
connected home market. Analytics
can help utilities in providing the next
generation connected home experience.
Some of the key analytics applications in
the connected home market are:
• Home device analytics will enable utilities
to collect data from smart devices and
proactively diagnose and resolve issues.
Through anomaly detection algorithms,
utilities would be able to predict the
breakdown of appliances based on their
power consumption pattern as well as
diagnostic data received from the smart
devices, and could thus proactively
schedule the maintenance activities for
these devices.
• Home network analytics combines
predictive analytics with closed loop
processes to analyse the home network
data and resolve network issues. With
machine learning, it can identify new
patterns and resolve issues before the
customer even notices them.
6 Navigant Research: Home Energy Management Report
Neighborcomparisons
Co
nsu
me
r e
ne
rgy
savi
ng
s
Connectivity
Socialnetworking
Neighbortracking
Consumptiontrends
Automaticdevice control
Device-leveltracking
Consumptionestimation
Bill-to-dateinformation
Meter-basedconsumption
TOU pricing“orb”
Home automationcontrol
DR response/load control
Auto pricingresponse
Consumptiontrends
Paper billsWeb portal Standalone HEM
In-homedisplay
Networked HEM
Development path for Home Energy Management (HEM) and Automation (Source: Navigant Research)
17 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
• Identify customer usage patterns,
behaviours and motivations by analysing
data from numerous smart devices and
provide next generation of solutions
and services like gamification. Through
this, consumers could compete with
their neighbours for a more efficient
home. Yet another example could be
recommending insulation measures by
analysing data from sensors throughout
the home.
Given the rapid pace of development
in the connected home market, utilities
need to consider solutions to deliver
convenience of set and forget services.
They need to leverage close relationships
that they already have with the consumers
to develop innovative solutions and thus
deliver a truly effortless experience for next
generation tech savvy consumers.
Designing next generation customer centric utilityOver the last decade, utilities have been
incrementally improving the existing
business models. But, with increased
penetration of technology and increasing
customer expectations, next generation
utilities would need to accomplish
necessary transition to business model
innovation. Utilities must build the
capabilities to meet the growing consumer
demands for personalized services, tailored
products and new value propositions. On
the way to delivering a next generation
consumer experience, the importance of
analytics will consistently rise. An analytics-
based ecosystem will be at the core of next
generation customer centric utility.
Regulators
Analyticsengine
NetworkInfrastructure
Smartgrid
Smarthomes
Prosumers
ElectricvehiclesSmart
meters
Smarthandhelddevices
Meetingregulations
Reporting Web Socialmedia
Virtualreality
Phone Digitalwearable
Capacityplanning &automation
Locationvisibility
Integrateddatabase
Multi-layered
analytics
Intelligentknowledgemanagement
Multi-layeredanalytics
Customers
Contact centre agentsField engineers
Next generation customer centric utility
18 © 2016 ExlService Holdings, Inc.
[ The next generation of consumer-centric utility ]
Finally, as customer expectations are
ever-evolving, utilities should be able
to measure and track various customer
experience metrics and evolve accordingly.
By embracing and deploying advanced
analytics systems, utilities would be
able to monitor and track real-time
customer experience metrics and deliver
personalized, consistent experience to
customers.
Increase in shareholder value
Acquisition
Ke
y b
en
efit
sS
trat
eg
ic K
PIs
Op
era
tio
nal
KP
Is
Retention Operation Efficiency
Increased market share
Increased brand equity
Increased sales
Brand mentions (tweets,conversations, emails, andposts), web traffic, conversion rates, Average Order Value (AOV)
Pages per visit, shopping cart abandonment, campaigns effectiveness, products per order, average revenue per user
Increased loyalty
Increased share of wallet
Increased advocacy
Churn rate, Net Promoter Score (NPS), Customer Satisfaction (CSAT), Customer Effort Score (CES)
Sentiment analysis, complaint resolution time, cost per channel, engineer availability, channel accessibility
Increased agents &engineers productivity
Decreased operationscost and increased ROI
Cost per sales, marketing costs, servicing costs (recalls, reworks), cost per interaction, self-service rates
Cost of acquisition, contact centre metrics (AHT, FCR), cost per retention, content effectiveness
Strategic KPIs – Provides high level business information Operational KPIs – Day to day monitoring parameters
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