This year represents a make-or-break period for power & utilities companies. Digital technologies are finally at a point where they can transform the industry. The ability to adopt them effectively will determine which companies own the market. Starting with operations, you can disrupt your company in a way that allows you to continue to thrive.
Yet although some utilities are aware of the importance of digitization, only a few of them have taken significant steps toward transforming their business operations with these new tools. According to our study only 2 percent of utilities in the EMEA region (Europe, the Middle East, and Africa) could be ranked as Digital Champions (leaders in digitization), and 45 percent lag behind as Digital Novices. This outcome falls well below the results among EMEA chemicals companies and global oil and gas firms, which were also studied in the survey (Oil & Gas and Chemicals study to launch later in 2019).
Based on what more than 500 leaders of C-suite and just below C-suite executives told us, we assessed where their companies are on the four-step digital maturity scale established in our 2018 report, Digital Champions. This analysis is important in understanding the industry’s preparedness for digital transformation. High levels of digital maturity are linked with profitability and viability in all three sectors.
Dr. Marcus Eul, Partner PwC Strategy& Germany, outlines why utilities companies are far behind in the digitization process compared to oil & gas and chemicals companies. Watch this video to learn more about their current challenges and the four main hurdles to run the transformation journey.
Folker Trepte, Partner PwC Germany, explains which four technologies will play the main role in the future of transforming utilities. What are our recommendations in order to keep up with the digitization journey?
Looking ahead to the next five years, the picture improves somewhat and offers more hope for the utilities sector. For instance, of the EMEA utilities surveyed by Strategy&, 5 percent said they had already implemented AI applications and another 9 percent sa they had piloted such programs. That compares with 20 percent and 6 percent, respectively, for chemicals companies. But through 2024, including planned technologies, AI adoption in the utilities sector may increase by another 15 percent, according to the survey, and that would be on par with chemicals companies and just below oil and gas AI implementation.