Energy suppliers dawdle with digitization

The force of digitization has taken hold of the utilities. It is both a threat and an opportunity - and therefore, along with the energy transition, the top issue for the German energy industry. The auditing and consulting firm PwC surveyed almost 120 German utilities on their degree of digitization and their focus areas. The study "Germany's energy suppliers are becoming digital" thus shows the current level of digitization in the industry.

New competitors

"The German energy industry has recognized the importance of the issue"

says Norbert Schwieters, Head of Energy Management at PwC.

"But in many areas, there is still an acute need for action."

80 percent of utilities expect that digitization will have affected the entire company by the end of 2017 and that new business models will therefore be needed. One driver of this development is digitally oriented start-ups, but also Internet groups, which are pushing into the energy market with all their might.

Business Analytics

Digitalization is forcing utilities to act faster, more flexibly, and more innovatively, but it also offers them the opportunity to optimize internal processes and thus reduce costs.

"Nevertheless, most companies lack a strategy to take advantage of the opportunities presented by digitization"

says Felix Hasse, who leads the digitalization of the energy industry in Germany at PwC.

"So far, only 17 percent of utilities have developed a digitization strategy."

Accordingly, three quarters of the respondents will have to increase their activities. 72 percent of the utilities surveyed intend to increase their budget for digitization in the next two years.

62 percent name investments in business analytics as a top priority. New digital business models - another opportunity of digitization - are not yet a priority topic.

"German utilities are taking the first steps - and are pushing ahead with the digitization of business processes and customer interfaces. But there is still a long way to go before the utilities are fully digitized.

says Norbert Schwieters.

"Our impression is also that companies are largely more technical and tool-oriented, paying too little attention to important issues."

PwC recommends that utilities take concrete action steps in the form of a "digital agenda": they should identify and prioritize digitization approaches throughout the company and plan their concrete implementation.

In addition, a "digital corporate culture" is crucial for success, in which employees break down "corporate silos," make rigid process flows more flexible, and management promotes digital skills.

In addition, utilities must develop digital products and services, expand partnerships, reduce their costs through digitized processes, increase their efficiency, and focus on the changing needs of customers - who have long been digitally spoiled from other industries.

"The specific paths to the goal can be different"

says PwC digitization expert Felix Hasse.

"What's important is that RUs are getting on track."

Otherwise, they could disappear from the market as a result of digitization, as the industry itself fears.