Getting operationally ready for change in a dynamic energy market

Change is inevitable and perhaps no more so than in the Energy industry. In recent years, we’ve seen large shake-ups such as the introduction of smart, new suppliers emerging, price cap changes, and new billing platforms being built.

And this high level of change isn’t slowing down any time soon. This week, Ofgem called for a culture shift in the sector, proposing plans to transform customer service standards, focusing particularly on billing and communication. It’s set to shape the change initiatives prioritised by suppliers as we head into winter, alongside two major challenges - smart install targets and Market-wide Half Hourly Settlement (MHHS).

As the energy market becomes increasingly dynamic, we’ve looked at why these challenges can be seen as opportunities to approach change differently. Below, we highlight the importance of operational readiness to deliver impactful change in today’s market, sharing five focus areas to ensure operational readiness doesn’t hold you back delivering change benefits.

Smart and MHHS present opportunities to enhance operational readiness

Smart installs continue to be a challenge, with suppliers looking to optimise install journeys to achieve 2025’s target. Non communicating sites need new, creative solutions, and there’s still the question of how you service those customers who still aren’t eligible, or opt out of Smart metering.

Smart is an enabler for MHHS, which will see suppliers dealing with up to 48 instances of consumption data per day, compared to one read per day, week, or month. There’ll be new ToU tariffs built around this data, bringing new complexities for advisors to understand and support customers with, alongside new billing complexities, and a higher bar to achieve with settlements; all of which will potentially drive cost up, at least in the short term.

For protection against this, suppliers are increasingly looking to leverage AI and automation tools, exploring new billing solutions and focusing on identifying internal improvement opportunities.

These changes are as varied as they come, but they all have two things in common. They impact the customer, and they impact the people supporting those customers.

With this in mind, how well we support these colleagues in preparing for a change of any size is crucially important.

In Utilities, we deal with anything from local changes within teams, through to changes which disrupt and shake the whole market, such as MHHS. Delivering these changes can take months to years, and any delays can reduce benefit realisation by up to 30%. This cost is seldom factored into benefit cases, meaning the delivery, and acceptance, of a change has to deliver - and deliver well.

Operational readiness often comes with costs, but suppliers have the power to act differently

Operational readiness often goes in and out of fashion. An agile approach which many companies adopt these days is fantastic for delivering fast paced change, but if those receiving the change aren’t in a position to behave differently, albeit due to cultural, skill, leadership or system issues, the expected benefit will not be realised.

We’ve seen great improvements in operational readiness across the board, with many suppliers getting more effective at communicating faster and effectively. But this often comes at a cost of correct process rigour and documentation, rushed training plans, incorrect or no targets, and limited involvement of leaders to role model and inspire the change.

So what constitutes ‘good’ operational readiness?

At its heart, effective operational readiness is focussed on protecting the people, customer and business. This is a skill that can be taught and one that, once learned, can be repeated. Investing in developing this skill will help repeatedly unlock these benefits.

Five focus areas for enhanced operational readiness

We focus on five areas when assessing how prepared a company is to land change, and maximise the opportunity they’re presented with. The areas are:

1. Air traffic control (Governance)

This relates to how well directed, controlled, and governed a change is. There are many aspects to this ranging from setting up, agreeing, and updating benefit cases; to stakeholder mapping and agreeing RACI’s, or setting up meeting rigour. However, the main goal is always to ensure change is delivered on time, on cost, and with no surprises.

To check if this is something you should focus on, ask yourself and your team:

• If there’s a delay or change to the delivery plan, can I see the benefits reforecast out, the RACI showing the risk, and is there a regular meeting already in my diary to discuss this?

If the answer’s no, you may want to focus here.

Often, mandated changes such as smart install targets or MHHS changes involve iterations of products, which require tighter governance to control. Take MHHS as an example, where some processes are still being built and debated. The impact of these changes needs to be understood and communicated quickly and effectively to not fall behind.

2. Engine (Process)

All changes, even those not system based, involve a change of process. This section ensures that any system and process architecture is protected and updated, with costs and impacts fed into the benefits case. The goal is once again no surprises, and seeks to ensure that on day one of going live, everything operates as planned.

A key question to ask is:

• Can I see the before and after?

3. Pilot and flight crew (Your people)

Your people receiving the change are the people who will make the change work. If they don’t adapt, the behaviour will not change and neither will the result.

Here, you should assess multiple elements of communication plans, cultural risks, training needs, and costs and quality checks, to ensure your people are ready to support the change.

A simple check here is to ask yourself:

• Do all my people who need to know about this, know it and believe in it?

This will become even more critical as what’s expected of your people gets more complicated. The additional changes and available data that MHHS brings about will present front end users with more information and options than ever before. How well they absorb this extra knowledge will separate exceptional service from good service.

4. Cockpit (Controls)

This is where you view and control everything. In the same way that a pilot needs reliable readings in the cockpit to guide a plane home, you need to know at any time how things are performing and when to take action.

It’s useful to consider multiple elements here, not just availability of reporting, such as the team’s ability to interpret and take decisive action from a report, communication of changes from c-suite down, and how effectively ownership of a change is being passed from change team to BAU.

Here, a good measure of success is:

• Do you know how fast and how efficiently a change is progressing?

5. Passengers (Your customers)

Finally, we focus on protecting the customer through any change, regardless of size. The goal of this stage is to ensure the customer remains central to decision making, and spans areas such as how to deal with fall out, what is expected, and whether customers are being treated fairly.

In some instances, protecting the customer may not be an option and instead we need to partner with them to educate. Smart has given customers more power, and as the range of ToU tariffs increases following MHHS, they’ll have more options to explore. Ensuring you’re educating customers on how best to apply this power is critical.

A simple question to challenge here is:

• How much consideration have we given to the end customers impacted by a change?

If you’ve delivered change in the past and not seen the results you’d expect, the answer isn’t always to find a new solution – benefits can often be realised by changing the delivery.

A comprehensive approach to operational readiness is central to this, and it shouldn’t be overlooked as new change opportunities emerge in an increasingly dynamic market.

If you’d like more guidance on what this means for your organisation, contact Jon Vincent.