Utility companies to exceedingly gain from advanced analytics
Enterprises in the energy and utility sector have mostly operated in a traditional environment by adopting standard technology practices. Currently however, many of these companies are switching to innovative IT to reduce costs, drive efficiencies and most importantly to enhance customer relationships. Analysts believe that energy and utility companies are plagued by ongoing factors such as depleting infrastructure, political turmoil, extreme climate issues and currently under the pressure to meet the growing customer expectations.As a result, they are compelled to adopt new and emerging technologies to transform the way they function.
Currently, a number of utility companies are investing in smart meters and smart grids for forecasting demand, shaping customer usage patterns and preventing outages. “However, none of these benefits can be realized without the application of analytics,” believes Alyssa Farrell, Product Manager, Energy and Sustainability, SAS. In a recent blog, she states that “smart meters and smarter grids in themselves do not bring actionable insight or competitive differentiation. It is only through advanced analytics that utility becomes intelligent.”
Gain from analytics… Increasingly, with real-time data on the smart grid, analytics is being applied to determine the best-case scenario for delivering reliable power to end consumers. For example, if utilities firms are enrolling customers in demand response programs and compensating them each month for the option to tweak their air conditioners during peak events. Each enrolled customer has unique quantified load reduction potential. Therefore utility must determine which units (customers) to schedule, when, and for how long. To make such determinations, these firms require more data and proven models that are available for decision support, returning results quickly and reliably, explains Farrell in her blog.
Kristian Steenstrup, VP and Gartner Fellow and author of a newly released report that identifies the top technology trends affecting utility markets in 2013 points out that advanced analytics not only provide utilities with the right customer insights based on their credit ratings, usage patterns and payment history, but also has the ability to aggregate data and transform them into useful information quickly for accurate risk exposures. Farrell believes that with adequate planning, data analytics can drive down costs considerably and improve the quality of service delivery for energy and utilities companies, thereby offering them significant return on investment.
Enters social analytics Steenstrup states that CIOs of utility companies should use social media analytics as a consumer engagement channel to drive customer participation and innovation. As per the Gartner report, a number of firms will start leveraging predictive and social analysis for understanding the future failure patterns of equipment, or the likely load from certain customer groups or regions. By understanding future circumstances, organizations can better allocate investments to maximize returns.
However, the most essential step for utilities companies to deploy technologies such as advanced analytics and big data is that there has to be a radical shift in the mindset, says Ranjit Chakraborty, Director – strategies and Planning, Bharat Solar energy. “Most utility companies often underestimate the ability to use vast resources of new data to optimize their daily business activities. As a result, valuable information remains trapped in silos and they continue to underperform in critical areas such as meter data quality, asset management and customer service,” he says. According to Chakraborty, executive leadership must support the fundamental transformation from separate business units to an organization that is focused on information sharing and data quality, with an understanding of how analytics can bring business value to the organization.
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