Digital and Org Design: 4 Insights from Utility Leaders

The utility industry is on the path to being digital. This includes developing policies to guide technology adoption and digital transformation efforts, working toward decarbonization goals, and navigating evolving consumer needs. While many organizations are well on their way, there is still progress to be made in aligning with customer priorities, curating a digital mindset, and leveraging data as effectively as possible.  

West Monroe’s signature research reports, Be Digital and Building a Digital Organization, highlighted how consumers, leaders, and organizations are embracing digital—and how that’s influencing business outcomes. With the industry adjusting to the evolving post-pandemic environment and a shift in demands from parties that rely on utilities, organizations will be looking to increase efficiency, revenue, and sustainability. West Monroe’s data highlighted four key areas of opportunity based on utility survey feedback. 

Insight 1: Utility customers have high expectations, and they are largely not being met

Utility customers have understandably high expectations for service. The stakes are high for reliability and support when heat, electricity, and water are on the line. While most customers don’t get to choose their utility providers, companies still need to balance providing a quality experience with services they’re required to provide. 

Today, just half of utility organizations say their culture encourages employees to make decisions based on customer needs—but many seem to understand that this is an area to improve in. Customer data insights was the #1 response for the next area of big digital investment. 

Insight 2: Utilities are realizing value in flexible organizational structures and cross-team collaboration

Only a slight majority (58%) of utilities have organizational conditions that support agile workflows, cross-team collaboration, and decentralized decision-making. Data findings show that companies identified as high-performing and highly digitally agile have invested in these organizational changes. 

The chart below shows the role of flexibility, collaboration, organization structure, decision-making and risk-taking when it comes to greater business performance and digital agility.  

This is an area where organizations know they need to improve, with 85% investing in moving to a more decentralized organizational design.  

Insight 3: As being digital becomes more essential, the importance of data continues to grow—and utilities have room for improvement

Overall, nearly all utilities give themselves a passing grade on data maturity, with nearly half (42%) giving themselves an “A.” And while 55% of organizations say they are enabled to analyze and quickly respond to changing conditions using a formalized data strategy, there is room for utilities to improve how data is infused throughout their organizations.  

• A - 42%
• B - 46%
• C - 11%
• D - 1%

People are the heart of every organization and will continue to be, with 55% of organizations stating their processes are automated and digitally powered where possible to ensure human efforts are focused on business differentiators. With those processes, more than half use data as a catalyst for change (56%) and as a tool to guide everyday decision making (54%). These processes can also provide greater operational efficiency to help hit decarbonization goals; being a digital utility will be essential as regulatory changes and sustainability standards evolve.  
 
When it comes to technology, half of organizations feel they are very effective at building secure, flexible data platforms (49%), in addition to having cloud-based data, IP, and infrastructure (47%). Less than half, however, use data to inform changes to existing products or to inform new products.  

Insight 4: In utilities, being digital is a shared responsibility across the entire organization

A strong majority of respondents believe their organization is effective at having a digital-first mindset (91%) and say they’re effective at ensuring organizational alignment on the digital vision (94%).  

Additionally, nearly three in four (71%) have a shared vision for competing and winning in a digital world that informs everything the organization does. This is important, as becoming a digital business requires not just buy-in, but championship, from every leader in the organization.  

In terms of ownership, 16% of respondents said digital vision sits with one member of the C-suite team and 27% outsource it to a separate transformation team entirely. The top roadblock to executing digital vision was reported as competing priorities, with cost constraints or siloed teams as the biggest inhibitors, showing that, while great progress is being made, there is still room for greater adoption and improvement.  

Conclusion

As the utilities industry continues to evolve and embrace a digital mindset, efforts toward meeting regulatory shifts, digitization efforts, and decarbonization goals are better positioned for success, with the added benefit of meeting evolving customer needs. Companies have a strong path already paved but have room to grow and enhance when it comes to aligning with customer priorities, embracing the digital mindset, and leveraging data in the most strategic way. By finding areas to optimize and further digital thinking, leaders and teams will be able to collaborate more effectively and act more nimbly to achieve greater business outcomes.