My ear has been glued to the phone for the past two weeks as I chat with folks about their participation in our upcoming events, Utility Analytics Week and the Knowledge 2012 Summit. Although the calls have focused primarily on the events, I've managed to sneak in some broader analytics discussion. Yesterday brought a particularly nice stealth analytics conversation. I talked with the vice president of customer service for a large cooperative, and asked him to share his company's analytics story. Immediately, he jumped into a conversation about metrics. Refreshingly, not a smidge of technology talk, just what the company was looking to measure for its priorities of safety, cost containment, reliability and customer satisfaction, and how the company defined success in those areas. As he discussed the metrics they were studying, I started to think about how increasingly advanced analytics could redefine success for utilities. Let's take a few paragraphs to ponder how analytics could change the way utility companies measure success.
Effectively defining and measuring success
Whatever the business goal, what does it mean to be successful in achieving that goal? Essentially, what are the right metrics to measure success? Consider a goal of, say, improving customer communications. Companies need to clearly define what it means to deliver effective customer communications, and how to measure that success. If a company is looking to recruit customers for an energy efficiency program, for example, is increased program participation enough? What about ensuring that the company isn't spending valuable marketing resources on someone who would never participate, regardless of how much marketing is directed toward him or her? What about ensuring the company isn't marketing to someone who would sign up for the program anyway? The ability to dive deeper into such questions will require more advanced analytics.
In addition, as utilities seek to better measure success, they often look for opportunities to compare themselves with other utility companies. The utility I spoke with yesterday benchmarked itself against a whole host of companies, and segmented out that benchmarking where appropriate. For safety, as an example, the company compared itself against all utilities, but with reliability they compared themselves with utilities that have similar vegetation cover.
Next steps in success, metrics that represent complex relationships
Now the metrics this utility described yesterday included metrics such as days missed because of work-related accidents. Many were standard metrics that do not necessarily need more advanced real-time, predictive analytics. However, as utilities improve their analytics capabilities, we'll see a new level of metrics and relationships to consider when defining success. Utilities have excelled at managing individual functional areas, but advanced analytics will provide utilities with better capabilities to monitor, compare and analyze everything from generation to consumption. With these changes, utilities will be able to better understand how changes within one part of the company affect another through analytics. For example, how does an increase in CAIDI affect the average handle time in the call center? Is there a correlation between these two metrics? If so, what action is needed to be successful in both of those areas?
Furthermore, as analytics enable utilities to explore different metrics for success, how will this transform their ability to benchmark themselves against other utilities? It may not be as simple as comparing missed days.
How do you see the definition of success for utilities changing in an analytics-driven world? I invite you to share your thoughts with us on our Utility Analytics Professionals discussion group on LinkedIn. Or pick up the conversation at our Utility Analytics Week conference and exhibition in Arlington, Texas, September 18-20.
As always, thanks for reading!
H. Christine Richards is a director at the Utility Analytics Institute, a division of Energy Central. You may reach her at crichards@energycentral.com.
