Utilities have begun adopting cloud-based capabilities across a cluster of key business functions such as customer experience, asset management, and reliability reporting. For a deeper look at how more and more utilities have overcome initial challenges to begin “flying to the cloud,” please see our blog here.

After some foundational cloud-based capabilities have been implemented, where should utilities look to go next in their cloud journey? In this blog, we explore the answer. Beyond any specific feature or capability, the cloud should enable greater organizational agility for years to come, allowing utilities to meet dynamic new business challenges while keeping IT costs closely aligned to specific operational requirements.

Foundational Cloud-Based Capabilities for Utilities

Utilities are already investing in cloud-based capabilities, particularly common initial projects including:

1. User Experience Integration: more and more organizations are seeking to unite customer data silos across service, billing, sales, and marketing to create a true “360-degree” customer experience that is intuitive, and available across various touchpoints of the user’s choosing (i.e., text, web, app, phone, e-mail), and informed by rich historical data on past customer interactions. We take a deeper look at how utilities can leverage cloud-based analytics to deliver an improved customer experience in our blog here.
2. IoT Device Integration: smart devices can dramatically improve the volume and granularity of asset-level data generated, while cloud-based AI/ML capabilities can use this raw data as fuel for predictive analytics. You can learn more about predictive T&D asset management for utilities in our blog here.
3. Cloud Migrations for Core Business Functions: more and more core business functions are being migrated to the cloud, allowing utilities to get out of the business of managing data centers. A secure, well-planned migration is vital to ensuring that business-critical functions remain up and running during the transition process. We explore key concerns related to cloud migrations (and what a platform like Oracle Cloud Infrastructure can do to help) in our paper here.

As these initial projects mature, utilities will begin to look at where to go next in their cloud journey. Continually expanding employment of IoT-based solutions will drive growing demands on data infrastructure (and the analytics platforms needed to translate this data into actionable intelligence). As this infrastructure expands, utilities will have the opportunity to further leverage their cloud investments through capabilities such as workflow/process automation. We explore operational automation for utilities in more depth in our article here.

For example, utility customer service organizations process huge volumes of routine customer communications, both outgoing (i.e., service interruption notices, late payment reminders) and incoming (start/stops, notices of downed lines, etc.). Process automation solutions can handle large volumes of these communications with virtually zero ongoing human supervision—freeing up human customer service representatives for more complex cases, ensuring faster communication times, and ultimately helping the organization intake and communicate time-sensitive information more responsively than ever.

These efficiencies will be critical to meeting regulatory service level requirements, while reduced system patch cycles for cloud-based tools can help rapidly resolve data reporting issues. And, with the cloud, key workflows can be economically scaled up in high-demand periods (such as in stormy weather) and scaled down to save on infrastructure costs when extra users are not required. These benefits simply cannot be economically achieved without the help of the cloud. Scaling up the on-site data and computing infrastructure and staff needed to support robust, real-time process automation capabilities would be unduly costly for virtually any utility. But cloud services providers benefit from economies of scale that allow them to provide the same capabilities for a fraction of the cost.

Modern Cloud Technologies Enable Cost-Effective, Rapidly Deployment of New Capabilities

Looking forward, utilities should recognize that the cloud is about more than any one capability or set of capabilities. With its ability to facilitate rapid deployment, the cloud can support greater strategic agility for years to come. Modern technologies provide out-of-the-box solutions which enable customers to launch new features or updates within days—and often just hours. Modern cloud technologies should provide:

1. Flexible, Cost-Effective Solutions: cloud-based capabilities can be scaled up to a fraction of the cost of in-house infrastructure (and the IT support staff needed to maintain it). And the ability to purchase “Reserved Instances” opens greater financial flexibility for utilities which are only allowed a rate of return on capital expenditures (CAPEX), but not operational expenditures (OPEX). Reserved instances are prepaid cloud computing or storage commitments (as opposed to pay-as-you-go) which may be treated as a capital expenditure (CAPEX).
2. Integrated Monitoring: real-time quality measurements for performance, consistency, and reliability help simplify system administration and tracking. IT administrators can check the status of business-critical systems at a glance, ensuring complete transparency while moving away from on-premises infrastructure.
   
3. Extraordinary Business Agility: because new cloud-based features and updates can be implemented with close to zero time-to-market, the cloud enables unparalleled responsiveness to dynamic business challenges.
   
4. The Ability to Process Diverse Operational Data Streams: the cloud can help utilities synthesize organizational intelligence like never before. An effective cloud implementation can be integrated with source data streams across the organization, effectively de-soiling a range of data generated by everything from transactional systems to IoT sensor data, to customer care and billing systems.
5. Long-Term Cost Reduction: while some costs may be associated with the initial move to the cloud, the flexibility of cloud-based applications can drive substantial long-term cost reductions. Utilities are free to focus their IT talent on value-added projects instead of data center administration. Costs can be closely aligned to current usage needs. Administrative overhead for critical systems like disaster recovery and security is dramatically reduced. And service contracts offer a level of future-facing financial certainty that is simply impossible to achieve with on-premises infrastructure.

These benefits can drive substantial value for utilities, solving immediate, business-critical operational challenges (like improving customer experience) while setting the stage for future growth. By enabling enhanced technological capabilities without increased staffing and support requirements, the cloud offers a true win-win proposition.

For a deeper look at how to plan an effective cloud migration strategy, we recommend our whitepaper here. It focuses on Oracle Cloud Infrastructure as one example of a powerful platform capable of driving the benefits discussed in this blog, and the different pathways to cloud and hybrid-based solutions it enables. Or, reach out to our team to discuss the best way forward for your organization’s cloud strategy.