We recently took the opportunity to sit down with experienced CIO, Luke Stow, to pick his brains on the technology landscape in energy retail. Luke has a wealth of experience in business transformations, having led successful digital reinventions at huge businesses including Hydro Tasmania, Telstra and Cathay Pacific.
During our conversation, Luke covered some of the key topics affecting today's energy retailers in this unrelentingly competitive marketplace – from the importance of customer-centricity to the types of technology energy retailers should be implementing if they want to succeed.
Can you please tell us a bit about your background?
Hi, my name's Luke Stow and I’m an experienced CIO. I’ve led multiple business and technology transformation programs, particularly where cloud-based technology has been adopted, most recently working with Hydro Tasmania on their recent business reinvention.
Following your time working in energy, in your opinion, what are the biggest market factors affecting energy providers at the moment?
I think the biggest market factor that’s impacting energy providers at the moment, particularly those with a retail arm, is how customer-centricity is now driving behavior and processes internally to enable energy providers to deliver customers a better experience.
And what challenges do you think adopting a customer-centric approach brings?
Just shifting to become customer-centric is the main challenge itself because it involves a complete rethink in the way most energy providers conduct their business. They have to reassess everything from the viewpoint that what’s best for the customer is best for the organization.
This makes cultural change vital. Your transformation needs to be supported company-wide, at every level, to succeed. Both IT and business teams must drive change and share responsibility. More important still, every individual needs to know they play a vital role in your transformation. Processes and technology are enablers, but it’s individuals who drive and implement change – they're the ones who will make a difference to your customers.
So what are the opportunities for energy retailers reinventing their businesses?
It’s a genuinely exciting time for energy retailers. Energy has become more than just electrons that are passed to the end customer.
Customers are now looking for additional services and product ranges from their energy providers. This creates a wealth of opportunities – for example with the emergence of electric vehicles and the digital home. The potential to diversify their product ranges presents multiple exciting avenues of growth for energy retailers.
How can energy retailers best harness technology to reinvent themselves?
What stands out for me is the opportunity of moving to modern, integrated platforms that enable interactions with customers to be frictionless.
By that I mean that the emergence of cloud technology enables businesses to work in a different way, in a much more agile way. A way that is suitable for responding to customer needs quickly, while also meeting market expectations faster too.
What should Energy providers be looking for from their technology systems?
Energy providers need to think about the platforms that are going to offer the most agility and flexibility – but importantly also give you out of the box processes.
You need a platform that makes your customers feel like they are being personally marketed to, but keeps those processes vanilla and repeatable, while using as much automation for your user base as possible.
How do you go about selecting technology that delivers this kind of functionality and customer experience?
With all the components and integration work required putting in place new cloud-based technology, it really makes sense to look at proven technologies that work together.
So when considering what you want to put in place, look at what works for other companies today. It doesn’t necessarily have to be the industry you’ve come from. I think current technology problems are solved by pretty consistent methods of implementation. For example, you could look at the Salesforce AppExchange and what technologies work well there, pick those and move forward with an implementation.
They’re already working together, there’s no need to reinvent the wheel. Getting those technologies in place can be quite simple if you stick to that plan.
Why do energy retailers need to change now?
Energy is reaching a tipping point. I’ve seen so many energy retailing organizations growing very rapidly, whether that’s from a startup or due to acquisitions, but they’re still using a base of legacy systems. This means the cost to serve is high, the cost of operation is high and the amount of manual intervention necessary to keep business running is also high.
Energy retailers need to find platforms that enable a reduction in all these areas. Not only to make sure they are serving their customers well, but also to ensure they’re complying with regulations. For both these reasons, energy retailers need to rapidly reduce the friction they’re experiencing across those areas and the adoption of cloud-based technologies is a proven way to do this.
What are the dangers for energy retailers if they don’t adopt cloud technology?
Energy retailing is really competitive. You need to make sure you’ve got what you need to engage customers in what realistically is a very unengaging topic. Making sure the platforms you put in place are going to enable your future growth in new products and new services is really key. Otherwise you’ll be left behind by your competitors.
You need to focus on how to reinvent from a product-driven organization that’s thinking purely about supplying energy to the home, to a customer-driven business that considers all the things customers could be able to get from you in the future.
What results can energy retailers achieve if they embrace customer-centricity?
Becoming a customer-centric organization brings substantial benefits. Particularly if you put in place componentized cloud-based technology with processes built into those technologies that enable you to work in new ways to provide a great customer experience.
Energy providers will see the biggest benefits by enabling digital channels. Customers can then visit digital portals and complete the tasks they may have called you about in the past. Vitally you can also sell products and services on your digital channel too.
With more customers coming through digital channels you can reduce FTE and invest more into your marketing and campaigns. You will also have less manual intervention in order acceptance and you can process customers through your systems coherently, enabling you to fulfill all obligations and truly engage your customers.
This brings benefits for both the organization and the customer; the savings we’re talking about for your organization are huge and the benefit you’re bringing your customers is enormous.
Read how CloudSense helped Momentum Energy deliver customer-centricity through a single integrated platform