Utility Week

UTILITY WEEK | 4TH - 10TH MAY 2018 | 17 Policy & Regulation Analysis T he UK utilities industry is experiencing an intense period of disruptive change. Macro-economic and political trends are impacting heavily on both asset-heavy monopoly utilities and their competitive counterparts in retail markets, influencing regulatory regimes and perceptions of legiti- macy and changing expectations regarding utility roles and responsibilities as well as acceptable levels of profitability. However, alongside these strategically critical market dynamics, utilities are also grappling with the implications of myriad and interlinking technological innovations for their businesses. These innovations, especially where they relate to digital technologies, could play a central role in enabling utilities of all stripes to respond positively and proactively to the wider pressures bearing down on the sector. A well-honed digital transformation strat- egy could allow a utility company to keep pace with – or even outstrip – rising service and efficiency expectations, demonstrate exceptional transparency and position them strongly for regulatory outperformance or competitive advantage. But do UK utilities fully realise these opportunities, and are they moving to grasp them? To better understand the way in which the UK utilities perceive the scope for digital transformation, Utility Week partnered with enterprise technology provider OpenText and, together with our market research part- ner Harris Interactive, interviewed 35 senior individuals from the energy industry. The resulting insights from that research were collated in a report, Understanding Digital Transformation in UK Utilities, to help shed light on the pace of change digital technologies are expected to drive and their potential ramifications. The findings highlight: the business activ- ities most ripe for digital disruption, the most important outcomes that digital investments should achieve for utility companies, which technologies are considered to be the most strategically important in the near term and what barriers might prevent utilities from achieving their digital transformation goals. Digital transformation In exclusive research by Utility Week and OpenText, utility stakeholders were asked to identify the biggest barriers to digital transformation – and whether radical change is imminent. OVER THE FOLLOWING TIME PERIODS, PLEASE INDICATE THE EXTENT TO WHICH YOU EXPECT YOUR BUSINESS TO BE TRANSFORMED DUE TO THE ADOPTION OF DIGITAL TECHNOLOGIES? FOCUSING ON THE NEXT 3-5 YEARS, PLEASE RATE THE FOLLOWING DIGITAL TECHNOLOGY AREAS IN TERMS OF IMPORTANCE IN DRIVING/ENABLING THE BUSINESS TRANSFORMATION YOU EXPECT? HOW HIGHLY WOULD YOU RATE THE FOLLOWING AS BARRIERS TO ACHIEVING THE DIGITAL TRANS- FORMATION YOU WANT TO SEE IN YOUR BUSINESS? Over the next 3-5 years Artificial intelligence The availability of funds for in- vestment Lack of holistic digital transformation strategy Lack of appetite for investing in new technolo- gies Lack of ap- propriate skills in the workforce to optimise investments Lack of under- standing at a senior level to inform invest- ment decision making The introduction of GDPR Cloud computing Advanced analytics Edge computing The Internet of Things Machine learning Blockchain Over the next 5-10 years Over the next 10-15 years 9-10 7-8 1-6 1 being 'not at all and 10 being 'radically transformed' 17% 54% 77% 40% 34% 9% 43% 11% 14% 24% 17% 10% 10% 14% 10% 34% 38% 31% 38% 28% 90% 41% 45% 59% 53% 59% 9-10 7-8 1-6 1 being 'not at all and 10 being 'radically transformed' 9-10 7-8 1-6 1 being 'not at all and 10 being 'radically transformed' Brought to you in association with 16% 37% 34% 3% 28% 25% 6% 37% 47% 31% 28% 44% 41% 31% 47% 16% 34% 69% 28% 34% 63%

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