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26 | 16th - 22nd May 2014 | UtILIty WEEK Customers Market view U tility companies today are facing tech- nological challenges that have the potential to turn long-standing busi- ness models on their heads. Technology is changing not only how we and our machines communicate but our behaviours as employ- ees and customers too. Utility companies are also subject to tight capital budgets and pressure on margins, as well as increasing political and regulatory scrutiny. Last month, energy regulator Ofgem rec- ommended that the sector be subjected to a full Competition and Markets Authority investigation. Some of the more dramatic headlines at the time suggested that this could lead to the break-up of the big six. Regardless of whether this happens, new competitors are likely to emerge with the potential to change market dynamics. As a result, utility providers need to be open to new ideas that will give them the flexibility and responsiveness to adapt to competition. Innovation, in terms of prod- uct delivery and the service wrap that goes around it, is more important than ever. To prepare, utility providers should look at other business sectors that have endured radical change, increased competitive pres- sures and changing customer behaviour. The retail sector was one of the first to face waves of disruption caused by the inter- net and the technology-driven empowerment of consumers. Store-based business mod- els encompassing sales, service and supply chains, established over decades, had to be ripped up and replaced. Those retailers, such as Comet and Woolworths, that were not fast enough to adapt are now dead and buried. But those which grasped the digital nettle and transformed their businesses to serve the new breed of customer have thrived. People now expect an "omnichannel" experience when dealing with retailers. This means companies must give the same, con- sistent experience regardless of the chan- nel people choose to use to contact them (phone, online, mobile app or face-to-face). This is even more important when you con- sider that some people might want to use several channels simultaneously, flipping between a mobile app and a phone call as needed. So prices in-store must be the same as online, as should product availability, information and service. Adding to these challenges is the fact that people are better informed than ever. With the full power of the web at their fingertips, people have access to competitors' offers and pricing as well as peer reviews. Unsurpris- ingly, loyalty looks like a thing of the past. BT recently published a report looking at the factors other than price that consumers value most in their relationship with utility companies. It is clear that the omnichannel wave is about to hit utility companies too. Our research found a clear split in ser- vice expectations, trust and perception of value across different age group of utility customers. Younger people, unsurprisingly, are more technology savvy but they are also more trusting. They tend to value ser- vice more than price but demand the full omnichannel experience. Happy to use apps, they also expect to speak to people when their enquiries are more complicated. They are not necessarily substituting one channel for another, suggesting that contact volume is increasing too. This is a challenge that we helped Aus- tralia's Western Power deal with. Western Power is responsible for the safe, reliable and efficient distribution and transmission of electricity in southwest Western Australia, encompassing the Perth metropolitan area. It needed a contact centre solution that could deliver a truly omnichannel customer expe- rience to meet demographic demands, and be flexible enough to cope with huge spikes in call volumes caused by severe weather or natural disasters such as wildfires. BT worked with Western Power to deploy a new omnichannel contact centre solution based on a cloud IT platform. Omnichannel technology gives Western Power the ability to handle enquiries received by fax, phone, email, social media, webchat or smartphone- friendly web forms. The cloud platform on which it is built gives scalability to ramp up capacity to deal with huge spikes in volume. Western Power's clever use of its new cloud-based contact centre, especially in times of crisis, stands out. It proactively uses automated voice recog- nition, social media and online forms, com- bined with data feeds from its operations centres, to handle more simple enquiries about power restoration times. Customers speak or type in their postcode for updates or follow live information on Twitter. This dra- matically cuts call volumes, freeing up staff to help customers with the most urgent or complicated enquiries. One of the signature benefits of cloud technology is that businesses only pay for what they use. This means they do not need to make large up-front capital investments in IT infrastructure. The benefits of this are felt all the more by companies that experience seasonal peaks in demand – or have to cope with crises such as extreme weather. Utility companies already have invest- ments sunk in existing infrastructure, so it is important they make the most of it. Cloud solutions allow companies to see out the lifecycle of their existing IT infrastructure, managing it to obsolescence while gradually switching the load on to their new, scalable platform. In an age of increasing competition, util- ity companies need to watch out for other companies encroaching on their space. Our research found that younger people trust utility companies more than older gen- erations and are more open to new service innovations, particularly remote managed services that could be built off the back of the data generated by smart meters. Cloud technology can help utilities remove the risk from innovating these new managed services. But cloud-based infra- structure allows businesses to test new ser- vices without the need for up-front capital investment in supporting IT infrastructure. We are on the cusp of something transfor- mational, and cloud-based IT, such as cloud contact centres or cloud-based innovation platforms, are an ideal solution for utility companies in these changing times. Rob McGinn, vice president, BT Global Services, BT The winner takes it all In an ever-more competitive marketplace, perception is everything, so utilities must be able to communicate with their customers on whatever channel the customer chooses. By Rob McGinn.