When I moved to Finland and joined Fortum in 2018, I did not know what to expect. The energy sector was new to me, as well as the Finnish culture and society. What I did know, however, was that the electricity consumption worldwide was growing rapidly, and there was tremendous potential for digitalisation to transform and disrupt the energy industry. I definitely wanted to be part of that change!
So, together with my colleagues I set out to explore how to make Fortum a digital winner in the decade of electricity. This work is now in full swing and in this blog I wanted to share three steps on how to transform a company to become a digital winner. This is based on a great model from the research and advisory company Gartner and my own experiences.
Step one: digitalise the way you work
The first perspective is digital enablement – what are we doing to digitalise the way we work and create a foundation for building a digital future? Think about what you can do to implement modern collaboration tools and processes, efficient new customer solutions and opportunities for employees to develop their skills to support the transformation to digital. How can you utilise new ways of working using methods like DevOps, Agile, Design Thinking or Value Chain Analysis?
At Fortum, we have for example established an internal Data Leadership Academy and are planning development studios in several locations to invest in our employees and encourage them to innovate new solutions in an inspiring environment. We also use efficient tools like Office365 to make it easier for people to connect and work together.
By creating a culture and environment that supports digitalisation, you can inspire people to come up with new innovations and ways of working in the blink of an eye!
Step two: optimise your customer experience
The second perspective is digital optimisation – how do we use digitalisation to optimise our customer experience and our costs? Electrification of the society brings endless opportunities to serve our customers better and more cost-efficiently with the help of technology. I bet you can see the same trend in your industry – think about what opportunities digitalisation can bring for your business.
At Fortum we can for example offer our customers smart heat to reduce energy consumption or help them to buy offsets for their CO2 emissions through the new CO2-removal marketplace Puro.
Digitalisation also helps to optimise our assets. One cool example of this is a pilot where we have installed sensors, analytics and machine learning in some of our CHP plants to predict failure, perform predictive maintenance and reduce unavailability costs.
Instead of seeing digitalisation as a cost – think of it as an opportunity to be efficient and create new revenue streams for your company and customers.
Step three: transform your business to create new revenue streams
The third perspective is digital transformation – the opportunity to transform, grow and create real value to your business. Digital leaders are constantly reshaping the market by building on their operational excellence and customer engagement to create new sources of value. How can you develop your existing business or come up with completely new solutions to create new revenue streams?
One example of this from the energy sector is hydro end-to-end optimisation. This is a prime example of how 70 year-old hydro assets can be linked to real time electricity markets through modern digital technology and analytics. If we could combine real time information about the reservoir, equipment, weather, demand, pricing, commitments and forecasts to steer our hydro power plants as a single optimised fleet, we could significantly increase our return on assets.
Build a shared mission – not an expensive strategy document
To conclude, becoming a digital winner is not about creating an expensive strategy document or engaging a handful of motivated people who want to try out cool stuff. It is about building a shared mission to deliver the best possible digital customer experience together with everyone in the organisation; executives, managers, staff, customers and other business partners.
Too many companies are turning over their digital strategy to consultants. Why don’t you instead take the opportunity to educate, engage, inspire and align the organisations as part of your strategy development process. Happy employees make great things happen!
For a more detailed framework on digital transformation, check out my LinkedIn-article.
I will also continue to talk with you about these exciting topics related to the changing energy industry and the potential digitalisation can bring. Things like digital customer experience, innovation and end-to-end optimisation can be real game changers in the future energy market!