Still in the grip of the energy crisis

23.05.2024

Source: Energy & Management Powernews

A study by IT service provider Prego shows how managers from the energy industry assessed the digitalization of their own company in 2023.

The Act on the Restart of the Digitization of the Energy Transition of May 2023 has given the smart meter rollout a sustained boost. Smart metering systems are one of the key prerequisites for smart grids and ultimately for the integration of renewable energies and electromobility into the electricity grid. However, the digitalization of the grids must go hand in hand with the internal digitalization of company processes and customer relationships to ensure that the energy transition can be successfully implemented across all levels.

The seventh edition of the Utility 4.0 study by IT service provider Prego focuses in particular on the operational implementation of the digital transformation in companies in the energy sector.

The study, whose reference year is 2023, was conducted in collaboration with Energieforen Leipzig. The survey primarily questioned managers from the energy industry, 70 percent of whom, according to Prego, have an insight into the strategic development of their company. Of those surveyed, 48% are at management and divisional management level. In addition, 24 percent of participants are department heads or their deputies. The company size ranges from more than 500 employees (43 percent of respondents) to fewer than 50 employees (5 percent of respondents). The authors did not provide any information on the absolute number of study participants.

A total of 75 percent of respondents consider their company to be "fairly well" or even "very well" positioned in terms of IT structure. According to the authors of the study, the answers show a strong correlation with company size, as the 25 percent who see themselves as "not so well" or "not at all well" positioned are mainly from small and medium-sized suppliers. For this group, there is obviously a considerable need for action.

The assessment of the process management structure, i.e. the way in which projects are implemented, is more evenly distributed. Here, 46% consider themselves to be in a rather good position, while 43% responded with "not so good".

A very high number of respondents (96%) believe that digitalization will lead to efficiency gains. Digitalization is also of great or even very great importance for customer acquisition (81%), customer loyalty (74%) and new business models (69%). However, a quarter to a third of respondents also believe that these issues are not so important. At the same time, 89% indicate that digitalization is important or even very important for the competitiveness and future security of the current business model. This is an indication that the industry is still working through the energy crisis in 2023 and has focused on optimizing existing processes.

Skills shortage biggest obstacle to digitalization

"The future challenges of the energy transition, which require accelerated digitalization, innovations and new business models, have disappeared from the focus of almost a third of respondents," the authors said.

In contrast to the previous year (39%), significantly fewer respondents (27%) saw their company as being very resilient in grid operation in 2023. In the core competence "meter reading and meter reading procurement", the proportion fell from 27% to 17%. The authors of the study attribute this result to a stronger focus on security of supply in times of crisis. Compared to the previous year, their own positioning in customer service, billing processes, receivables management, procurement and switching processes was also rated significantly lower. Only 50 percent still rate their own processes as resilient.

The lack of time and personnel resources at supply companies remains one of the biggest challenges for digitalization. For around 80 per cent of respondents, the shortage of skilled workers was the most important obstacle to greater digitalization. In contrast, the proportion of respondents who see an inflexible IT infrastructure and the lack of integration of the system landscape as obstacles has fallen significantly from a high level, according to the study.

Finally, the authors also asked what percentage of the respective company's turnover is invested in IT. While 8 percent did not provide any information, 17 percent invest more than 2 percent of turnover, 29 percent invest around one-fiftieth of turnover, 22 percent invest around 1 percent of turnover and 24 percent invest less than 1 percent of turnover.

Author: Fritz Wilhelm