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Energy service providers 4.0

From energy suppliers to all-inclusive service providers

Push one button, and the light shines. Give the knob one turn, and the radiator heats up. Day after day, billions of people expect to be supplied with energy – in a sufficient amount, in the right form, and around the clock.

And the energy demand is growing: trends such as the internet of things and industry 4.0, the development of smart cities and smart homes, as well as e-mobility are making power supply in households, commercial and public space increasingly important.

The transformation of the energy industry

However, it is not only about quantity. Utilities also have to develop new products and solutions so as to meet changing needs and habits in the digital age. Examples are charging poles and stations, car-sharing solutions and customised electricity contracts.

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However, communication with end-customers and commercial clients is also changing: surveys such as the Monitor Deloitte survey 'Kundenerlebnis@EVU' (Customer experience at utility companies) show that more and more clients receive their invoices digitally, retrieve their customer and consumption data via apps, and wish to be informed about special events, such as a power failure, via their smart phone.

Utilities failing to react to these developments are quickly replaced on the highly competitive market for energy services providers – often by a start-up. According to the result of the PwC survey 'Deutschlands Energieversorger werden digital' (German utilities are becoming digital), 58 per cent of utility companies feel threatened by the market entry of companies from outside the energy industry. Approximately one-third of utilities interviewed in this survey even believe that one in four utility companies will disappear from the market in the years to come.

Digitalising processes

In short, utilities are under considerable pressure, and must adjust their business and operating models. To remain successful, they don't only have to optimise their structures, but also modify them and, in some instances, even establish new ones.

Most utilities are initially focusing on enhancing their process efficiency. 76 per cent of the companies interviewed in the PwC survey see increasing digitalisation as leverage to automate existing processes within their structures.

This comprises processes related to the preparation and review of invoices: establishing interfaces between the ERP systems of utility and housing industry companies can significantly reduce manual effort to record and review invoices on both sides. Aareal Bank's BK01 eConnect solution is one example. In connection with BK01 immoconnect, payment processes between the energy and the housing industry can be completely digitalised, enabling an easy exchange of invoices and data, as well as further processing in the respective ERP systems without manual efforts.

An example: the local public utility service in Lübeck.

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Automating analytical processes

However, digitalising existing processes is only the first step. In a second step, companies should use the data (provided in increasing abundance as a result of digitalisation) to gain new value-adding knowledge and provide their clients with a greater benefit, since the ultimate goal is to maintain their market position and position themselves visibly alongside other providers. An expedient use of data, i.e. carrying out business analytics, allows for the development of tools for predictive maintenance or for the analysis of customer behaviour. With intelligent data processing, companies succeed, for example, in forecasting developments or identifying deficits in the provision of services. Processes, systems and costs become more transparent, whilst company management is facilitated via indicators and benchmarks. Developing and offering promising solutions for specific client segments is also easier with business analytics.

New digital products and services

Finally, completely new products and services can be offered as a result of digitalisation, often taking up global trends, such as urbanisation, new mobility concepts, the increasing connectivity of devices, or the desire for individualisation. Notably, customer loyalty offers or offers to simplify client communication benefit from digitalisation. Examples are mobile applications, interactive websites, multi-channel communication products or real-time consumption information and analyses. Products fulfilling changing customer needs regarding invoice payment would also be a typical example. For instance, innovative payment methods such as seamless or mobile payments are becoming increasingly popular in the online and retail sectors; end-customers also want to use these methods for paying energy-related bills. Utilities offering such payment methods can set themselves apart from competitors, signal their innovative strength, and acquire new customers.

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