Utility Week

UTILITY WEEK | 18TH - 24TH MARCH 2016 | 7 Sponsored report Brought to you in association with "Utilities know that they need to increase their focus on the customer and change the way they deliver services. They also know that digital technologies and the Internet of Things are key enablers in doing this, but at the moment, many seem paralysed by uncertainty about their strategies for deploying these technologies and so, maybe, progress is not being made as fast as it could." Arun Krishnamurthi, global head of utilities, Wipro Key Findings Investment and regulation 1 Investment levels for innovation across energy and water networks are broadly similar in terms of percentage of turnover and revenues allocated to inno- vation. This is despite the different approaches taken by Ofwat and Ofgem to funding innovation. 2 Innovation leaders in water and energy networks are broadly positive about the regulatory environ- ment for innovation, although they highlight some areas where structures lead to unintended consequences – especially in relation to the ability of organisations to collaborate effectively, and in particular their ability to collaborate on "cross-vector" innovation projects. 3 Investment in innovation among energy suppliers is seen as a priority across the board, although the actual amounts invested vary widely in accordance with the diverse mix of company types now active in the market. 4 Larger energy supply firms find it much harder to adopt innovation outputs in business-as-usual operations. 5 Innovation leaders in energy supply urge regulators to "get out of the way" of innovation. Culture and governance 1 Drivers for innovation are very similar across utilities, although innovation projects are very differ- ent in nature. 2 Difficult-to-address aspects of innovation culture and governance are very similar across utilities. 3 Collaboration, although commonly seen as essential to strong innovation, is patchy across utilities. Supply chain organisations in particular still complain that utilities are difficult to access and "cross- vector" innovation between utility silos is universally agreed to be nascent. 4 The use of benchmarking tools to understand organisational approaches to innovation relative to others is sparse. This is despite those who have con- ducted benchmarking exercises reporting significant benefits as a result. Most prefer to take an informal, ad hoc approach to absorbing such lessons. pants in this research were largely positive about the extent to which their regulatory environment supports innovation. The least enthusiasm was shown by energy supply participants where there was, at best, a neu- tral feeling about the current landscape and a very clear message that regulation, while protecting consumer interests, should "get out of the way" of ambitious business and service-model innovation. That said, there were mixed feelings about the potential for a government or regulatory fund for inno- We need to be clear about our strategic vision and purpose. We can't be distracted into acting as some kind of proxy for stimulating SME growth or the promotion of their technologies – investment in innovation must be benefits-led " "

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