Customer service, in-memory computing, and cloud? The utility industry is changing.

SAP For Utilities 2014 Exec Panel

I attended this year’s North American SAP for Utilities event and I was pleasantly surprised by some of the things I found there.

The utilities industry (electricity, gas, and water) are regulated industries which can’t go down (or at least, shouldn’t go down). Because of this, the industry is very slow to change (the old “if it ain’t broke…” mindset). However, with technology relentlessly enabling more and more efficiencies at the infrastructure level, utilities need to learn how to be agile without affecting their service.

This is challenging, sure. But, on the other hand, organisations like Google, Facebook, and Microsoft are incredibly nimble, updating their technologies all the time, and yet they have far better uptime figures than most utilities, I suspect (when is the last time Google was down for you, versus when did your electricity last go out?).

Having said all that, at this year’s event I saw glimmers of hope.

There were a number of areas where change is being embraced:

  1. Customer Service – utility companies have traditionally not been very consumer friendly. This is the industry which refers to its customers as rate payers, and end-points. However, that is starting to break down. This breakdown has been hastened in some regions by market liberalisation, and in all areas by the huge adoption of social media by utility customers. SAP for Utilities agenda
    Utility companies are now starting to adopt social media and utilise some of the strategies we have spoken about and written about so often here.
    What was really encouraging though, was to see that one of the four parallel tracks on the first day of the conference was dedicated to usability (which admittedly is more geared to usability of apps for utility employees, but there’s a knock-on for its customers too), and even better, on the second day of the conference, one of the four parallel tracks dedicated to customer engagement!
  2. In-memory computing – SAP has been pushing its SAP HANA in-memory computing platform to all its customers since it was announced in 2010. As mentioned previously, utility companies are slow to change, so it was interesting to listen to Snohomish County PUD CIO Benjamin Beberness, in the conference’s closing keynote, talking about his organisation’s decision to go all-in on SAP’s HANA in-memory platform. I shot an interview with Benjamin which I’ll be publishing here in the next few days where he talks about some of the advantages for Snohomish PUD of in-memory computing.
  3. Cloud computing – and finally, there was some serious talk of the move to Cloud computing by utilities. In the Utility Executive Panel (pictured above), Xcel Energy‘s CIO and VP, David Harkness said that before he retires his organisation will have closed their data center and moved their IT infrastructure entirely to the cloud. And he then added a rider that his retirement is not that far off.
    Given that this was the week after the celebrity photo leaks, there was also, understandably, some discussion about the requirement for cybersecurity, but there was broad acceptance of the inevitability of the move to cloud computing

I have been attending (and occasionally keynoting) this SAP for Utilities event now since 2008 so it has been very interesting to see these changes occurring over time. A year and a half ago I had a conversation with an SAP executive where I said it was too early to discuss cloud computing with utilities. And it was. Then. But now, cloud is seen by utilities as an a logical addition to their IT roadmap. I wouldn’t have predicted that change coming about so soon.

Disclosure – SAP paid my travel and accommodation to attend the event.