Can a Digital Revolution really change the energy market?
I recently read a great article on SME Web (http://www.smeweb.com) talking about the need for the Financial Services sector to up its game in terms of the lack of digital transformation. I wholly agree and the same is true of insurance and utilities.
Digital technology, when deployed sensibly has revolutionised many sectors of the consumer market: think of the ease in which you are now able to review, buy and receive your online shopping. The same is not yet true of all the services that small businesses need to access to run their company in the most efficient way possible.
For obvious reasons my focus will by utilities and specifically energy. Research shows that many small businesses find the energy supply market confusing.
They have little time to dedicate to it and feel that they are badly served.
You’d therefore expect that by deploying digital technology in this market you would reap great rewards for both the small business owner and the service providers.
However, this clearly isn’t the case. Why would this be? In short, I think its because its just plain difficult and the margins are small. Energy suppliers are typically either dealing with a range of IT systems for managing their customer data. Or they’ve got the IT side sorted, but are reliant on third party sales channels. Therefore see no incentive to enhance their digital offering as customers will likely always switch supplier at the end of their contract term.
So, with the barriers to entry seemingly high, how can digital technologies begin to improve the lot of both the suppliers and their business customers?
Evidence is beginning to show that the change will happen slowly, but in key parts of the energy value chain, starting with data. A number of start-ups and larger digital tech companies are beginning to leverage the vast data the energy market creates. These offerings are typically leaning towards gaining insight from the data by machine learning, creating new ways of thinking about when to consume energy and when to take advantage of wholesale prices.
Arguably the last to benefit from this activity will be small business owners: as the technology improves it drip feeds down through the entire business market. However, we’re trying to address the balance. Small businesses can now find our App in the Apple Store: https://itunes.apple.com/gb/app/switching-energy-app or alternatively start online here: http://www.switchingenergy.co.uk/
Our work in this area is at the very beginning and we believe that by demonstrating the value of “digital” via our app, we can start to revolutionise the way small businesses engage in the utility market for the better.