Digital Transformation
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The Utilities Industry

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Industry Digital Progress

The progress to digital maturity by the electricity industry has as yet somewhat mixed. Some utilities are using advanced analytics to optimize assets; and in some systems there is widespread implementation of smart meters; while some utilities are beginning to digitally manage and integrate distributed generation resources. However, according to research sponsored by the WEF, overall only about 43% of utilities are currently investing in digital technologies as part of their overall business strategy, indicating this mixed status.

In a study involving more than 1,900 companies in Europe and the US, conducted by BCG, a consulting company, 57% of the utilities considered themselves to be digital laggards. Although utilities mostly invest on a project basis as vast bureaucracies, their close B2C orientation is now forcing them to also face increasing convergence between electric utilities and the home retail market, where intelligent appliances and smart meters are increasing demands for greater customer orientation. They are also facing pressure from their commercial and industrial markets where a platform for industrial-scale analytics, are connecting machines, sensors, control systems and devices.

Today's utility customers expect more than just reliable electricity service. They are becoming more proactive, demanding more choice and expecting more personalized services. What is missing for many utilities today is a top-tier customer experience (CX) and the systems that support it. Some utilities are investing in digital self-service technologies and mobile platforms. According to another survey, less than 14% of the utilities surveyed have any integrated digital transformation strategy.

Overall, we observe a sector that has considerable digital ambition but suffers a mismatch between those aspirations and its digital vision, investment, culture, and capabilities. Our assessment of the digital maturity of the utilities industry is thus under 40%.

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Case Studies

Digital Transformation in the Utilities Industry - CASE STUDIES

PAY PER LUX: As the name implies – Really! Anyone can do this!

Fortune magazine named Philips CEO Frans van Houten as one of the world’s top 25 ‘eco-innovators’. Here was why:

Schiphol airport pay for luxThe Challenge

Amsterdam’s Schiphol Airport, like any other real estate manager, was interested in reducing its utility bill. With lights on 24-7 this could be a big thing. Going to LED lighting would not only substantially reduce the utility bill but would also reduce other costs such as maintenance and inventory of lighting products given the much longer life of LED lighting. But best of all, the savings would be perpetual! But there was significant Capex involved and there were myriad other demands for it.

The Input

Philips, a manufacturer of lighting and other electrical products, was interested in the LED business this would generate and Cofely, an energy services company, would love some demand side management (now called Demand Response) to optimize its load and capex forecast. Philips and Cofely offered Schiphol a deal – “Light as a Service” that Schiphol just could not refuse.

The Output

Philips and Cofely would be jointly responsible for the performance and durability of the system and this included installation, maintenance and ultimately end of life re-use and recycling. Schiphol would only pay for the lux it used and nothing else. Philips will retain ownership of all the equipment and lease it with full service to Schiphol over the life of the contract.


By using energy-efficient LEDs, the airport expects to cut its energy consumption in half, compared to a conventional system. Philips also provided low maintenance and more efficient fixtures reducing material costs as well. Schiphol management were happy to bring to its Board, large Opex savings instead of a large Capex request! For Philips and Cofely, the payback was handsome and replicable elsewhere. The Metro in Washington has since also adopted this pay for lux model.


 Sources: Lux Review

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