All Aboard For Utility Digital Transformation
The utility industry is experiencing the most transformation it has inception to date. In days past, the utility industry was viewed as a static, non-tech savvy business. Folks likely conjured up images of meter readers coming to their homes, apartments, or businesses to manually take meter readings on a notebook pad. Those days are quickly melting into the sunset. Digital transformation is happening in the utility industry at an explosive rate. You might ask, “What’s driving the change and how do CFO’s prepare for the digital revolution?”
Some say, data is the new currency. As such, data management through artificial intelligence (AI), machine learning (ML), and big data is tantamount to the success of any thriving business.
The Digital Transformation or 4th Industrial Revolution is happening now!
According to CFO Dive, 86% of finance execs expect digital transformation to have high impact. With this learning, CFOs should dive in and make the necessary changes to embrace the fast-moving digital train. For example, with the utility sector evolving at breakneck speed, businesses will need to get on board or simply get left behind. Some companies have been using AI for automated account and bank reconciliations, forecasting, and variance analysis for a decade. We need finance folks who can drive creative solutions with new products and services quickly and accurately. Examples include Smart street lights, Advanced Metering Infrastructure (AMI) meters, and environmental sensors, providing millions of data points in seconds to gain a better understanding of our customers and their systems. Smart street lights will allow increased and decreased lighting as the city requires. AMI meters are collecting millions of data points that are being used to understand customer patterns and trends, which is utilized for rate design. Environmental sensors throughout cities are collecting data associated with pollution levels and environmental quality. This data can be used to determine ozone action days or other measures that manage better more sustainable environments. Transportation sensors are being used to monitor traffic patterns and could ultimately factor into urban planning. These are just a few utility-specific examples of AI, ML and big data.
Deep Business Insights leads to better decision making and operational excellence.
Driving business insights through analytics by artificial intelligence, machine learning, and the management of big data is moving towards being a commonplace practice. One example of how utilities are using AI is through data visualization, which provides analytics in seconds and is very interactive and real-time. In the past, I have seen business unit leaders become very dependent on executive data visualization dashboards for their daily decision making. Data visualization can help business leaders understand data intricacies to aid in better business decisions. One way a company is can use AI is through robotics process automation (RPA) by automating manual invoice processing. RPA can reduce invoicing processing cycle time by 2-3 days. We are looking forward to experiencing how utilities can use AI and ML in other facets of the business.
Story Telling is not for only children anymore.
In today’s world, you need to be a financial translator and tell the financial story such that a 5th grader can understand. I often tell my team building presentations should have the essential elements of storytelling and can be likened to conducting an orchestra. The music starts out slow and then it builds. Then towards the middle, you hit the crescendo (aka known as the “money slide”) and music is brought down and then there’s a finale at the end or a compelling conclusion or valu. The meta point is that you’re telling a story and it must have all the requisite parts to be believable by the reader and ignite action.
Clients want finance professionals who can communicate effectively with a range of stakeholders. Key success factors include the presenter’s ability to be at ease communicating complex topics in a simple manner, netting out the message to satisfy executives need to consume information quickly and succinctly, and being able to articulate the value proposition or outline a specific plan of action.
We need to work together and foster collaboration across industries to optimize our digital transformation. Digital transformation is happening not only in the tech industry, but also in unlikely industries like the utility business. Over the last decade, digital transformation has accelerated. In another decade, our daily work and personal lives will be infused with digital operations. It is important for CFOs and their teams to get on board now to ensure we are adequately prepared for the future.