Utility Week

Operations & Assets 24 | 14TH - 20TH SEPTEMBER 2018 | UTILITY WEEK Culture and process Although it is encouraging that none of the participants in the survey viewed innovation as "unimportant", just 39 per cent said they felt innovation was critical to their business. This 39 per cent figure could be considered high. However, given the transformation under way, industry commentators are wor- ried this tentative approach to innovation will mean utility companies could be le behind. In the next five years companies are brac- ing themselves for disruption and upheaval across the board as they face challenges of decarbonisation, and more pressure from the regulator and consumers to improve performance, set against a landscape of rapid change in technologies, of which arti- ficial intelligence and Internet of Things are just two. The report shows an immaturity in the innovation cultures of many utility busi- nesses, with more than half saying they felt their internal innovation culture was "nei- ther immature nor mature". No-one said they consider their organisation's innovation culture to be "very mature", and a small pro- portion felt it was "quite mature". A quarter said they consider their culture to be either "quite immature" or "very immature". Technology strategy When it comes to technology strategy, utility companies are taking a cautious approach to exploring its potential, with many displaying signs that they are "nervous" of where their understanding currently is. Almost half (45 per cent) of respondents considered themselves to be "fast followers" when it comes to adoption of transformative technologies, whilst around 32 per cent said they prefer to wait until technologies become established before taking them up. Less than a quarter considered themselves to be "first adopters" of new technologies. How quickly companies adopt new tech is, however, dependent on their starting position. There is also a risk that the term "fast fol- lower" can be an excuse for doing nothing and waiting. "The question is how fast," asks one industry expert. "The world is speeding up, and if you're not really fast you'll be le behind." Advanced analytics, artificial intelligence and the Internet Of Things were seen as the most transformative technologies available to organisations over the next decade. Meanwhile, electric vehicles were seen as the least transformative, with 35 per cent saying viewing them as "not transformative at all", and blockchain received a mixed response as to how transformative it would prove to be. Methodology of research The report is based on both quantitative and qualitative research. It was conducted by an independent third party, Harris Interactive, in accordance with the Market Research Code of Conduct, in spring 2018. For the quantitative aspect, participants were invited to take part in an online survey, the results of which have been aggregated and anonymised. There were 31 respondents to the survey, most of which were innovation and technology leaders in UK utility companies. There was a relatively even split between water and energy participants. The qualitative elements come from both questions asked in the survey and in- depth telephone conversations with key players in the water and energy sectors. The full report is available as a pdf download free to Utility Week subscribers at the Premium section of utilityweek.co.uk ON A SCALE OF 1 TO 5 (WHERE 1 IS VERY IMMATURE AND 5 IS VERY NATURAL), HOW MATURE WOULD YOU SAY YOUR ORGANISATION'S INNOVATION CULTURE IS? DO YOU BELIEVE YOUR ORGANISATION'S CURRENT APPROACH TO TECHNOLOGY ADOPTION IS SUITABLE FOR THE LEVEL OF CHANGE EXPECTED IN THE UTILITIES INDUSTRY IN THE FOLLOWING TIME PERIODS? WHICH BEST DESCRIBES HOW YOU ORGANISATION VIEWS INNOVATION? 10% 16% 58% 16% 32% 42% 42% 0% Yes Not sure No The next five years 5-10 years 10-15 years Very immature Very mature Business critical Important Nice to have Unimportant 65% 39% 26% 39% 45% 16% 0% 3% 19% 32% 1 2 3 4 5 Insight report

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