Powering Energy Industry Progress with Platform-based Business Models
Energy providers are facing three compounding challenges – rising demand, complex supply challenges, and increasing customer expectations:
- Demand: From the electrification of transport and the proliferation of data centres, to population and industrial growth, multiple factors are increasing energy requirements among customers worldwide.
- Supply: Strain on power grids, supply chain bottlenecks, shortages, geopolitical tensions and fossil fuel volatility are making it difficult to keep pace with growing demand.
- Expectations: As complexity intensifies for companies, customers are calling for greater simplicity, cost-effectiveness, and transparency.
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To meet today’s energy demands and customer expectations despite supply issues, energy providers must innovate fast. But for many, skill gaps and legacy IT systems make rapid transformation seem impossible.
In this article, we will explain why platform-based business models and data-driven decision-making are now mission critical – and how BCG Platinion promotes innovation by building powerful partner ecosystems
1. The Platform-based Buzz
Scalability, modularity, and interoperability will all be essential if providers are to navigate complex conditions with agility (and boost operational efficiency at the same time). A platform-based business model combines these capabilities, but the key is implementing one as part of a wider customer-centric transformation.
“The platform model enables international scalability and operational efficiency.”
(anonymized energy industry leader)
On the one hand, achieving a customer-centric transformation will require providers to integrate energy solutions that are tailored to individual needs. Staying on the theme of bespoke offerings, the ability to provide dynamic, personalized AI-driven insights will be a valuable differentiator.
When a platform-based business model is successfully adopted, energy providers stand to gain a major competitive edge. Three primary advantages stand out:
- Significant cost reductions driven by economies of scale
- Accelerated go-to-market for new energy products
- Seamless cross-channel integration of new services
The ability to seamlessly integrate services across channels is particularly crucial when it comes to billing. Customers now expect their energy bills to be consolidated within a single invoice, capturing their use of connected services like EV charging and wall boxes. The siloed nature of legacy utility systems simply cannot adapt to the rapid changes we are seeing in today’s market.
2. Staying Grounded with Data@Scale
An integral aspect of this business model transition will be the shift to data-driven decision-making. But first, solid data foundations are required to achieve meaningful progress.
Laying the right foundations means adopting holistic data models that enable a 360°view of the customer, and the ability to gather real-time insights. This level of visibility can be used to enhance energy demand forecasting and improve grid stability.
“Before implementing AI use cases, data must be accessible, structured, and usable.”
(anonymized energy industry leader)
AI-powered customer engagement and predictive analytics also become realities with data-driven decision-making. This enables energy players to offer new cross-selling and up-selling options, as well as next generation customer support. Ultimately, the Data@Scale approach gives providers the power of interoperability. This equips them to connect energy assets with digital platforms and transform their operational efficiency.
3. Top 3 Success Factors
The platform transformation process is highly complex - from aligning business goals with implementation plans, to determining which products and functionalities need to be phased out.
To help bring clarity to the process, we have defined the top three success factors to focus on during the process:
- Strategic business focus – develop a clear business model (including a business case) and select well-defined target markets. Build a comprehensive roadmap in alignment with both business and customer needs
- Technology – ensure that architectures are modular and scalable enough to support flexible business expansion
- Organizational change – create interdisciplinary teams to foster innovation, fully leverage technology, and introduce agile, iterative methods to drive continuous improvement (in alignment with business objectives)
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Managing complexity is mission critical. Simultaneous transformation efforts across areas like billing and energy data management (EDM) can generate an overwhelming number of unresolved issues and delay going live. A phased approach and cross-departmental collaboration are highly recommended, ensuring that changes are introduced in a transparent, step-by-step way.
4. Lighting the Way
Energy providers that pioneer platform-based business models and embrace Data@Scale will gain a competitive advantage that will position them as industry leaders. They will be able to offer next generation services like real-time energy management, and untap new opportunities to expand.
“Start small, iterate fast, and align your business and IT goals from day one.”
(anonymized energy industry leader)
Those held back by talent shortages and legacy IT burdens can bridge the innovation gap by building a partner ecosystem. BCG Platinion enables industry players to do this in a way that ensures operations and legacy systems are maintained affordably, while simultaneously building the new landscape.
The success of a platform transformation hinges on balancing technology, strategic planning, and organizational agility. To find out more about this journey, get in touch with our expert team!
