Digital Utility Transformation Best Practices

The transformation journey is not an easy path, and most companies will encounter many roadblocks on their way. However, for most network utilities, transformation is not optional. That energy markets are changing is an inescapable truth. But utilities will still have to navigate political uncertainty; manage market-specific regulatory policies; access project finance from skeptical and conservative shareholders; and confront legacy issues such as corporate culture, a lack of skills, and outdated technologies.

Navigant Research recommends that utilities take a pragmatic approach to transformation. This involves the creation of a strategy and an accompanying actionable roadmap that has the backing of executives. The strategy then needs to be communicated to various stakeholders via a carefully constructed communication program. By understanding where an organization’s strengths and weaknesses are, it can make the right investments in the areas that need it most. For instance, to create the right environment for innovation or a technology platform that supports the business’ future needs and to select the best partners.

This Navigant Research report aims to give network utilities practical recommendations to effect a successful transformation. The study is a companion report that develops some of the ideas presented in Navigant Research’s recent research brief, Distribution Utility Transformation Strategies, which highlights some of the leading examples of the business model transformation of distribution networks businesses and discusses the factors forcing change. This study, Digital Utility Transformation Best Practices, also builds on some of the recommendations provided in Navigant Consulting, Inc.’s (Navigant’s) “Energy Cloud Playbook” and provides utilities with best practices for creating an actionable roadmap for transformation.

Key Questions Addressed:
  • How should utilities approach transformation?
  • What transformation strategy should utilities adopt?
  • How should transformation be implemented within a business?
  • What barriers are there to transformation?
  • What can a utility do to overcome these barriers?
  • What is the best environment for innovation?
Who needs this report?
  • Utilities
  • Distributed energy resources (DER) manufacturers
  • IT vendors
  • Systems integrators
  • Regulators
  • Government agencies
  • Investor community

Table of Contents

1. Executive Summary

2. Market Update

2.1   There Is a Need for the Majority of DNOs to Transform

2.2   There Are Significant Barriers to Transformation

2.2.1   Political Uncertainty Can Stifle Investment

2.2.2   Regulatory Policies Will Shape the Industry Transformation

2.2.3   Shareholder Attitude to Risk Will Dictate Willingness to Invest

2.2.4   Internal Barriers Will Affect the Ability to Transform

3. Best Practices in Business Transformation

3.1   The Energy Cloud Playbook

3.2   Set the Strategy; Create an Actionable Roadmap

3.3   Back the Strategy

3.4   Communicate the Strategy

3.4.1   Shareholder Engagement

3.4.2   Workforce Engagement

3.4.3   Customer Engagement

3.5   Identify Organizational Strengths and Weaknesses

3.5.1   Foster Innovation

3.5.2   Manage Technology Transformations with Caution

3.5.3   Select Partners Wisely

3.6   Be Flexible

4. Conclusions

List of Charts and Figures

  • Energy Cloud in Numbers, World Markets: 2025
  • The Energy Cloud Playbook

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