Europe’s energy market is entering the digitalisation era. The European Union is turning to smart electricity meters and aims to replace at least 80 per cent of electricity meters with smart meters by 2020. Why? The new smart meters can help reduce the use of electricity and gas emissions, as the technology is enabling consumers to adapt their energy usage during the day according to different energy prices and thus save money. A win-win for consumers and the environment.
While the change to smart meters is a great benefit for the consumers and the European Union as a whole, it’s creating new challenges for energy companies. The digitalisation of the energy market means companies need to follow a new modernisation map for their business processes. Companies are looking for smart metering solutions that cover all relevant functions related to meter management, meter reading, invoicing, billing, receivables management and customer management.
So far, companies globally are using legacy customised software for meter management. However, that legacy software does not offer high agility and flexibility, in line with the prerequisites of the digitalised energy market. Estimates have shown that the costs of modernisation and optimisation of the old software might be more expensive than finding a new and smart solution. So, the question is: Should companies stick to their existing solution and modernise it, or should they make a fresh start and go for a greenfield approach?
Staying with the existing approach, which was created some decades ago, means staying with a basic system that has been heavily customised for each company’s needs — a system that will be very expensive to optimise, since it will require a lot of effort to completely change the IT systems, reprogram and restructure them. In the end, the organisation might not even reach the required digitalisation and agility level with its legacy IT environment. So, after all that work, the company might still not be able to address the market with the required speed.
Changing consumer needs and requirements are another factor. Just being an energy provider might not be enough to acquire new consumers or even retain existing ones. Companies need to think about offering new products and services for consumers in a bundle with the power contract. For example, consumers could be getting extra products such as game consoles or TV sets at a lower price or as gifts included in the contract with their energy provider.
Legacy software solutions will hardly be able to configure such bundle contracts, because that will require speed, agility and better use of data. The bundle offer portfolio will need to be tailored to the needs of the customers. Energy companies can retain existing customers and attract new ones only if they have a fast go-to-market strategy and offer convenient, fast and cost-effective solutions provided via digital sales channels.
So, how can energy companies get there? Greenfield solutions can help them be fast, more agile and flexible, as well as create bundle offers to increase customer satisfaction rates. These greenfield approaches can use agile software as service models to enable companies to configure new products and thus offer both energy — ideally green power — together with a new product, such as a game console, and provide them quickly to the market.
Are you ready to bid your legacy systems farewell and take a bold new digital step forward?