Bill Schmarzo

I recently had the opportunity to keynote at the Utility Analytics Summit in Phoenix.  What a great conference – with several presentations about how different utilities are leveraging new sources of customer and operational data to optimize key business processes and uncover new monetization opportunities.

For those of you who were not able to attend, I want to share some of the key points from the presentation.  And for the folks who I spoke with afterwards, here’s a summary of my presentation.  I hope you enjoy it!

What’s Important to Utilities

Like most other businesses in most other industries, companies in the energy business are turning to big data to find ways to increase customer satisfaction, improve energy production reliability and efficiency, plan for future demands, and lead energy and water conservation initiatives.  This annual report excerpt from a utility company is probably typical of most utilities (see Figure 1).

Figure 1:  Utility Annual Report

Utilities are at the intersection of the “Internet of Things” and Customer Behavioral Analytics.  Utilities have an opportunity to couple robust customer energy and water usage data with data spewing off of intelligent devices and the smart grid to create entirely new value propositions for their residential and business customers (see Figure 2).

Figure 2:  Big Data Opportunities in Utilities

The rapidly growing abundance of data across the energy network – both at points of energy generation (wind, solar, coal, natural gas, hydro) and energy consumption (residential appliances and commercial equipment) – will enable utilities to uncover new usage, performance and conservation insights across customers (residential, commercial), products and operations.  And just imagine the possibilities of bringing in other data sources from internal operations such technician notes, work orders, problem tickets, and consumer comments, as well external data sources such as weather, traffic, demographics, and social media (see Figure 3).

Figure 3:  Wealth of Potential Predictive Data Sources

Begin With an End in Mind

As my services organization recommends in our big data engagements (Vision Workshop, Proof of Value Service), let’s begin with the end in mind; let’s contemplate early in the definition and development process how we might want to render our customer, product and operational insights to both our customers (residential, commercial) as well as front-line employees (technicians, call center agents).  Below is an example of taking what one utility is sharing with their customers via a web page (section A in Figure 4), and modifying it with prescriptive analytics (evidence-based recommendations) about actions the customer could take to optimize their energy usage, improve conservation efforts and reduce their costs (section B in Figure 4).

Figure 4:  Residential Customer Actionable Dashboard

In fact, utilities might even be able to leverage other data sources to show their residential and commercial customers how their energy usage and conservation efforts could impact the value of their properties (section C in Figure 4).

Because utilities can monitor energy and water usage as well as appliance and equipment performance across all of their residential and commercial customers, utilities can leverage these “benchmarks” to provide new services such as:

• Leverage energy usage behavioral analysis to make energy usage recommendations such as when to run the washer, dryer, dishwasher and pool pumps.
• Analyze appliance and equipment usage and performance data to flag under-performing appliances and equipment (predictive maintenance), and leverage external data to make appliance and equipment service and replacement recommendations (using sources such as Yelp, Angie’s List, Consumer Reports and Amazon reviews).
• Leverage soil and weather data to make lawn conservation recommendations
• Leverage Zillow and traffic data to make landscaping recommendations

The potential for the new monetization opportunities is only constrained by the creative and innovative thinking of the utilities in collaboration with their customers and front-line employees.

Utilities Big Data Business Model Maturity Index

Big data is going to be a big deal for utilities, but only if they have a plan for where and how they are going to leverage these new sources of customer, product and operation data with advanced analytics to uncover new customer, product and operational insights.

The Big Data Business Model (BDBM) Maturity Index provides such a guide, but it requires organizations to embrace a technology and data build out process driven by business opportunities.  And there are a multitude of analytics-driven application opportunities to advance the utilities along the BDBM Maturity Index (see Figure 5).

Figure 5:  Big Data Business Model Maturity Index for Utilities

But as I told the audience this past week, don’t try to address all of these application opportunities at once.  Prioritize one strategic opportunity (based upon a combination of business value and feasibility of success) and focus on the delivery of that application. We have found that this is the best way to build out your big data and data science people, technology, data and organizational capabilities – one analytics-powered use case at a time.

Big Data in the Utilities Industry
Bill Schmarzo