Like never before in human history, modern society depends on energy, gas, water, and waste management on a daily basis. Every household, every individual is dependent on these services for their daily needs which gives Energy & Utilities (E&U) Industry, very unique position.
As the Insurance industry, the E&U industry is often under the regulation of government which varies from country to country. Challenges and constant transformation that follows modern civilization do not bypass the E&U industry, either. According to Capgemini report, the global energy and utility sector is undergoing unprecedented changes:
• “The three “Ds” of decarbonization, deregulation, and decentralization are having a significant impact.
• The sector is moving from its conservative, regulated past to a new future where innovation is key. Its consumer base, which used to be largely passive, has now moved to a world of ‘prosumers’ who expect a sophisticated, service-based industry.
• Digitalization will be critical to capitalize on these shifts. Technologies, such as automation and artificial intelligence (AI), are playing the main role in managing the balance between demand and supply, boosting efficiencies in all the entirety of the value chain, innovating the customer experience and transforming business models”
The sector E&U underestimates the power of intelligent automation´s true potential for example the rule-based technology such as Robotic Process Automation (RPA). Capgemini researches estimated that the E&U sector can save between $237 billion to $813 billion from RPA and intelligent automation at scale. For example, the automation front-runners such as Gazprom, the Russian gas giant, used RPA to automate verification of meter readings. In the first two weeks after the automation was implemented, an employee was able to validate about 130 invalid meter reads, saving 10 hours of the week per employee.
Robotic Process Automation (RPA) is a non-invasive, ruled-based software that automates repetitive tasks and processes, which was previously done by humans. Considering the high number of transactions that take place in the E&U sector which are handled by humans, it is not hard to conclude that more transactions handled by humans, the greater chance for human error.
With implementing RPA, utility providers who automate their business process recognize a significant decrease in errors, usually over 60%. Fewer errors - more satisfied customers, implies that RPA improves customer service and customer management which is crucial for E&U companies in order to have a competitive advantage on the market.
United Utilities, a United Kingdom-based water company, has been a pioneer in using RPA in automating its back-office processes. Since 2017, they automated more than 20 processes, with another 12 in development. The company´s Head of robots, Wallace Dean, had this to say about the importance of RPA: “The benefits are not just time savings, but making the process robust. We know the robots aren´t going to go on holiday or be off sick”.
And that is another benefit of implementing RPA. Robots are available 24 hours a day, 7 days in the week, 365 days a year. If you use a robot for an automated process that takes 4 hours per day, you still have 20 hours left to automate other processes.
Compared to traditional IT solutions, RPA can help the E&U industry to drive digital transformation and achieve very good results quickly and with minimal effort. Implementing Robotic Process Automation doesn’t effect the existing IT systems and doesn’t request changes in them, it can be used and accepted by employees without IT knowledge.
RPA technology focuses on the automation of recurring, rule-based processes. Tasks that can be performed by RPA are listed here.
E&U industry has a wide spectrum of processes that can be automated. Today more than 50% of automation use-cases are found in the E&U industry and most of them are core processes. These are just a few of them:
• Meter Reading Validation – Utility companies read the meter before billing the customer for consumption and it is handled by humans. Sometimes a human error could lead to generating an incorrect bill that results over or undercharging the consumer. Errors like this can have serious consequences on company reputation. With RPA you can automate meter reading validation - reducing time, cost, and a chance for error. Also, if there is an error found, the robot immediately flags that something is wrong, telling the human to resolve the problem. This leads to less complaints from customers and better customer experience.
• Correcting Misreads – Customer´s meter misreading can be fixed in just a few steps with RPA.
• Billing and Statements – By automating payment requests, RPA can easily manage receivables, correcting overcharges, or just process payments helping E&U companies build a better relationship with customers. Also, making reports and statements can be automated with RPA giving E&U companies better sales analytics and data management.
• New Account Setup – As rule-based technology RPA can speed up account opening by reducing errors such as wrong information provided by the customer or by checking all rules that have to be matched so the account can be opened. If there is any issue, the software flags it to an employee who then resolves it.
Even though there is still skeptic opinion about digitalization and automation in the E&U industry, automation front-runners and leading companies see benefits of implementing RPA just in few months, sometimes in a few weeks. We are listing some of the real-world use-cases of implementing RPA in core and support functions:
• Energy Trading - British Petroleum is using automation in its trading function. Ayman Assaf, CIO for compliance, regulatory, risk and finance at BP Supply & Trading says, “Automation is allowing us to consolidate data on the trading floor, using RPA to mimic repeated processes. This shifts the role of our analysts, increasingly freeing up their time to focus on higher-value tasks. So rather than collecting data sets, they can spend time interpreting and interrogating the meaning of that data”
• Complaints Management – Exeleon electricity and gas utility, from the United States, are using RPA chatbot to resolve customer complaints on specific issues helping them to develop deeper insights into customers' needs.
• Finance and Accounting: Pricing calculation and Order Entry – EDF Energy, based in the United Kingdom is using RPA to automate manual order entries that previously took 70 hours a month to complete. Automating eight processes delivered six times return on investment
• Procurement: Inventory records, Responding to customer/supplier request, Contract management – Exxon Mobil uses a contract planning bot that provides notification every time when contracts are due for renewal. Procurement has more time to find new suppliers or renegotiate existing contracts. This means that contracts cannot expire without anyone noticing
• Human Resources: Employee management, Absence management, HR compliance and reporting: Synergy, Western Australia´s leading energy generator and retailer uses RPA to automate processes in HR shared services
As technology changes, the traditional utility business models are under pressure worldwide, and increased competition make their presence felt. However, despite the monumental changes happening, the sector has only just started to advance beyond its existing conservative mindset.
Consulting firm Ernst & Young sees Robotic Process Automation as one of the four digital basic technologies for the energy sector of the future – alongside blockchain, smart metering, and the Internet of Things.
We believe that those organizations that develop a new culture of digitalization and automation will be able to innovate, make new business models, and grow at the expense of the organizations that fail to change.