2023 utilities challenges and how to tackle them through change & transformation

The utilities change, and transformation space has really begun to heat up in the latter half of the year, and we wanted to unpack some of the trends and challenges which are currently shaping the landscape.

To get the latest insights, we sat down with our utilities Consultant, Chris Brown. Chris was able to break down which initiatives are dominating the water and energy sectors and highlighted which challenges are likely to drive transformation projects and programmes in the future.

Let’s start with the energy space. What are the prevalent transformation challenges dominating the sector?

Many of those within the energy sector are currently tackling two key challenges: pursuing carbon neutrality by 2050 and improving customer experience.

With the net zero deadline now looming, organisations are looking to develop and expand enduring transformation teams to help seek out green energy alternatives. This often takes the form of looking at solutions which drive more effective ways to interact with the grid and utilising innovative approaches to storage to better manage supply.

Because of this need to become carbon neutral, we’re seeing a steady increase in organisations creating long-term project and programme teams specialising in ESG (environmental, social & governance), sustainability and efficient energy solutions.

Do you see this as a lasting shift in the sector?

I'd expect this trend to carry on well into next year as companies look to onboard long-lasting sustainability skills to ensure they're prepared for the future and to reduce the expense that can come along with engaging with 3rd party consultancies or interim specialists.

Organisations recognise that having an embedded team of permanent project and programme professionals to supplement or even replace consultancies will help to better retain knowledge to drive long-term strategic transformations.

On the other side, energy companies are looking to improve their customers' experiences and simplify processes that used to cause headaches, such as switching providers.

To tackle these concerns, they’re looking to implement regulatory initiatives such as FMRS (Faster More Reliable Switching) by creating enhanced customer digital platforms. They’re also continuing to push the installation of SMETS 2 SMART meters to help their customers move away from their less functional and more frustrating first-generation SMETS1 meters.

What are some of the challenges they may come up against in this climate?

Adoption and enrolment continue to cause difficulties for this particular type of transformation, so it’s likely that pursuing permanent project and programme candidates to drive this change will be an ongoing trend in the sector.

Transformations like those mentioned above put further pressure on organisations to understand and manage the increasing amount of data coming into their systems. This pressure, in turn, drives a greater reliance on individuals who have the skills necessary to manage, analyse, migrate, and cleanse data to drive better commercial decision-making.

In response, many clients are looking to bring in permanent candidates to develop solutions within the data science space as well as within customer experience programmes. These candidates are then tasked with driving more intuitive self-serve customer platforms.

Is the water sector experiencing similar trends and challenges?

In some ways, the water sector is seeing the same problems arise, and they're also looking to improve their customers’ digital experiences. Once again, they’re creating and developing new platforms that improve customer interactions and reduce the overall cost to serve by utilising more automation of processes and utilising AI to drive self-service.

Many water companies are following the example of other industries, such as the logistics sector, where there is a focus on better scheduling of activities across a disparate field force and ensuring customers are informed at different steps of their journey.

This is driving water companies to utilise mobile applications and more intuitive CRM platforms to tackle operational challenges. Transformations such as these seek to create seamless customer interactions while also allowing businesses to store customer data and customer interactions, which will help to drive an increase in CMex (Customer Measure of Experience) and DMex (Developer Services Measure of Experience) scores.

Automation and self-service are quickly emerging as the latest transformation trends because of this.

What are some of the other trends we can expect to see from the water space?

With a number of water organisations choosing to adopt cloud-based CRM solutions such as Salesforce and Kraken, which run off platforms such as Azure and AWS, many companies are quickly improving processes which were once a point of friction for customers.

Another challenge that the water sector is having to grapple with at the moment is the transition away from analogue telephone lines, which are utilised to operate above-the-ground assets. Openreach is shutting off these lines as of 2025, so modern alternatives are having to be installed quickly to ensure there are no operational outages.

This, along with the frequent threat of leaks, has meant that water companies are having to update and replace a large amount of their ageing below-ground assets as well.

They're now turning to new operational technology and processes, which often require dedicated teams to drive the adoption of new technology while also ensuring they are used consistently and effectively.

It’s paramount for companies that these hires bring skills that can endure and evolve in the sector, so they’re looking to develop long-term operational transformation teams.

Why do you think the utilities space is growing so much at the moment?

Both water and energy companies are looking to create their future footprints for transformation, and to do so most effectively; they need industry-leading skills and people. Having a permanent knowledge base on hand means they’re more equipped for future hurdles while also ensuring their current challenges are tackled quickly and effectively.

Also, as these companies are looking to expand their teams, they recognise that investing in permanent hires gives them the opportunity to develop individuals who could one day head up new divisions and specialisms.

The challenges I’ve highlighted will likely continue for a substantial amount of time, so it only makes sense that these companies invest with the long term in mind. This is made simpler by the fact that there are so many talented people on the move right now. I think this interest in permanent roles is only just beginning.

What are you doing to help these companies tackle these challenges and stay ahead of the curve?

My first port of call is always to check in with our clients to see how everyone is doing and make sure I'm working on exactly what they need. Often, it can be easy to get lost if you don’t have constant communication, as priorities can shift quickly. From there, I can identify critical challenges or transformations that clients would like to tackle in the coming months.

A great example of this process is the one I’m going through currently. I'm working with an energy company to help them place a number of Technical Project Managers who will implement an energy storage transformation project.

I’m working alongside our fantastic IT team for this particular client as they’re able to put them in touch with the best transformation and change leads in the digital space. Utilities and tech go hand in hand because of the prevalence of digital transformations in the water and energy sectors. Collaborating cross-team is just part of how we work at Deltra; we find this always ensures the best outcome for our clients.

Projects and programmes like this are certainly more prevalent because the utilities sector is starting to ramp up its activity to contend with both customer requirements and regulatory commitments.

Don’t be surprised if this upswing continues into 2024. These sector challenges bring some of the sharpest and brightest minds to the forefront of change and transformation projects, so if you’re looking to revolutionise your processes and platforms, there is certainly a war for this type of talent.

If you'd like to learn more about our extensive utilities network and how we can support your transformation agenda, you can email Chris at chris@deltragroup.com or call him at +44 (0)20 7375 9511.

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Chris Brown

10th October

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