Big Data will become one of the most important strategic differentiators for players in the utilities market in the coming years. Especially the use of Big Data techniques for commercial objectives will separate the wheat from the chaff, concludes BearingPoint in a recent research.
In the coming year, the utilities market will undergo a strong change. Technology will lead to new ways of generating and distributing power. In addition, more emphasis will be placed on customer centricity, and there will be more intensive regulation of the market. As a result, energy companies are forced to work more efficient and lower their costs.
Five strategic factors
In a recent research executed together with IDC Energy Insights, BearingPoint has identified five areas that will be crucial for creating/maintaining a competitive advantage in the marketplace. One of those factors is Big Data – the analysis of large amounts of data that is used in decision-making processes.
Although Big Data is currently a hot topic in the utilities market, the research shows that the actual implementation is pretty limited. The foundation is in place – 92% of the researched firms acknowledge it uses complex predictive models based on data analytics – but firms are far from maximising the potential. Currently, analytics is mainly used for improving operational aspects or gaining knowledge on internal or external behaviour.
However, the researchers claim that the real value of Big Data lies in the link with commercial processes. This view is shared by others – when asked how important Big Data would be in driving company revenue in 2025, almost half of the energy companies said they expect Big Data to be responsible for 10% to 50% of the revenue.
In the year 2014, only 28% of the energy companies use Big Data to personalize tariff plans and one-third to offer personalized products and/or services. The researchers of BearingPoint expect a big increase of this percentage by 2025, especially among the energy companies that are ahead in terms of integrating Big Data in their business operations.
Move quickly or fail slowly
Against the backdrop of the big changes foreseen in the energy landscape, BearingPoint warns utility companies to act quickly if they don’t want to lose their competitive position. There is no balance. Big Data will be crucial: information means power, conclude the consultants of BearingPoint.