Data Analytics

How AI in the Energy Sector Improves Customer Experience

The pandemic catalyzed a rapid elevation of customer expectations across all industries, and automation can play a key role in meeting those demands.

Joe Kuehne

Joe Kuehne is an Associate Editorial Director at BizTech magazine.

Customer expectations have changed in recent years, as modernized apps have delivered convenience and improved customer service. Consumers expect the same from all companies they’re doing business with, including energy providers.

“For decades, utility companies have consistently been at the bottom of the list for customer satisfaction and engagement,” a recent Forbes article notes. “The reason? Most utilities operate in heavily regulated markets, so customers don’t have a choice in their provider. With no need to earn customers, service and engagement often take a backseat.”

Energy companies haven’t exactly been known for cutting-edge technology for multiple reasons. For one, many of them are using legacy technology, such as supervisory control and data acquisition (SCADA) networks, that has been in place for decades and wasn’t designed to be used in complex environments or handle the vast amounts of data being produced by mobile and Internet of Things devices.

In addition, energy providers and utilities are part of what the federal government has designated “critical infrastructure.” The sheer scale of the services they provide naturally makes them risk averse. As a recent Utility Dive article notes, “When your fundamental mission is to literally keep the lights on and provide the power modern society needs to function, dabbling with untested technologies and business models can have profoundly bad outcomes.”

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How Tech Tools Help Provide a Better Customer Experience

Still, the industry is in need of some modernization if it hopes to meet customer expectations. Tech tools such as cloud computing, smart meters and mobile customer service apps have been making steady gains for energy providers and utilities and supporting much-needed digital transformation.

In addition, some tech companies already offer customer service platforms specifically designed for the unique needs of utilities. Oracle has developed a utilities customer service and billing tool to assist energy and water providers by transforming valuable data collected by smart meters to personalize the customer experience.

Tech leaders such as IBM and cloud providers including Amazon, Google and Microsoft Azure currently offer robust cloud solutions for the energy industry, as well.

DIVE DEEPER: Find out how energy companies can use artificial intelligence to boost operations.

AI Can Help Utilities Move to a Modern Customer Experience

Utilities and energy companies looking to turn this trend around are looking to automation for help. “The energy sector is starting to use AI and machine learning for customer engagement,” notes Energy magazine. “By using AI and machine learning, energy companies can provide customers with information that is specific to their needs. This involves using data analytics to understand customer energy usage and then providing customers with information about how they can reduce their energy consumption by changing their usage habits.”

Many utilities currently lag behind other industries in their efforts to leverage the data they generate to provide better customer service. In a recent article, McKinsey recommends a phased approach to using data analytics “because many utilities have yet to implement advanced analytics in customer care at an enterprise level.”

In the first phase of the approach, McKinsey notes, “utilities first need to identify and prioritize use cases, aggregate the necessary data, establish cross-functional teams, and adapt operations.”

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After laying a good foundation for data analytics, McKinsey suggests that utilities should prioritize the next generation of use cases: “This process typically requires brainstorming with the business to come up with a list of new use cases, capturing incremental data such as text transcription data from voice recordings, and enhancing their understanding of advanced-analytics techniques.”

All of these efforts can produce significant improvement in the customer experience. A recent article from Business Insider details the experience of a U.K. energy provider where “AI is doing the work of 250 people” and producing a higher customer satisfaction rate.

It's very interesting to see how the security posture is going to evolve around this, both in terms of training it but also interacting with it.”

Sanjay Sood Senior Vice President and CTO, CDW

Is Generative AI the Next Step in Customer Service for Utilities?

In many regards, the customer expectations faced by energy companies and utilities are similar to those in any other industry. Using data analytics to personalize the customer experience has heightened consumer demands, and automation is stepping in to provide an elevated experience.

Generative AI, including tools such as OpenAI’s ChatGPT or Google’s Bard, has the potential to be a game changer for the industry. According to Energy Central, “Generative AI can be used to optimize energy consumption, reduce waste, and improve efficiency. For example, generative AI can be used to generate new routing and scheduling strategies that minimize costs and maximize efficiency for utilities companies. This can lead to significant cost savings and improved customer satisfaction.”

While generative AI certainly shows promise for increasing productivity and improving the customer experience, it doesn’t come without risk. As Sanjay Sood, senior vice president and CTO at CDW, pointed out at the company’s recent Executive SummIT, it remains to be seen how government agencies will regulate the use of generative AI. The technology also raises concerns about data privacy and cybersecurity.

"It's very interesting to see how the security posture is going to evolve around this, both in terms of training it but also interacting with it," Sood said. "It's going to open a whole new set of questions in terms of how do you ensure that these autonomous agents are creating the right security and privacy posture that best fits the risk policies of your enterprise.” So, while it offers great potential to improve the customer experience, organizations considering AI should adopt it with a healthy dose of caution and forethought.

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