Energy innovator
P R O J E CT PA R T N E R S
r o t a v o n n i y g r e n E on Written by Lucy Dix w Lloyd Produced by Andre
3
In eight short years First Utility has gone from a handful of customers to competing with the Big Six energy providers in the UK. Business Review Europe discovers how technology has made this possible
W
hen Bill Wilkins took on the joint roles of CIO and CTO at First Utility back in 2010, he was faced with two challenges: making the IT fit for purpose and also capable of scaling up as the business grew. The pilot platform First Utility originally deployed wasn’t performing as required, Wilkins explains, and he was asked to advise on the correct route to take. “The platform wasn’t scaling and the company was looking at re-engineering it, so I presented the founders with a plan and was asked to implement it. And it’s been a very exciting few years watching a concept with a small number of customers growing to the very large business is today with
4
close to a million customers and £1billion in revenue,” Wilkins adds. First Utility was started by a group of smart investors back in 2008, looking to replicate the success they had already achieved in the telco industry, building an independent company and offering customers a different proposition. Initially, the company was all about smart meters and accurate billing – relatively new concepts at the time – and it is still, primarily, a technology company, although the product it sells is energy. As CIO and CTO, Wilkins says, he has two distinct roles. The CTO part of his role is about designing digital solutions around First Utility’s core energy proposition, and his
w w w . f i r s t - u t i l i t y. c o m
5
Simple. Smart. Agile. LiveOps Cloud is building a happier world, one customer experience at a time. The world’s most passionate, customer-focused brands empower their workforces, delight customers and improve the bottom line – all with LiveOps Cloud’s always-on, highly secure, true multitenant and instantly scalable contact centreas-a-service (CCaaS) platform. Try it for free! - www.liveopscloud.com/trial
EUROPE OFFICE Davidson House | The Forbury Reading RG1 3EU | UNITED KINGDOM Phone: 020 3006 8280 | Fax: 020 3008 6171 www.liveopscloud.com
CIO role is all about making sure that technology was never a barrier to what the company wanted to do from a business perspective. “When you go from nothing to a million households and from 30 employees to 1,400 employees, the scalability of the platform is a
1400
Number of employees at First Utility
very important factor in how quickly you can grow. So the CIO part of my role is all about delivering that robust, secure, scale, fit-for-purpose business. The CTO part of my role is about positively evolving the way our customers engage with their energy consumption and also with us. So that it’s more convenient for them, they get a better service experience
and ultimately they end up staying longer with us,” Wilkins adds. Research and development
And a pivotal part of this technology delivery is First Utility’s preference for investing in developing its own solutions. It has a Business Technology Group – carefully named by Wilkins to highlight that technology is at the core of the company and not just an internal service provider – that works collaboratively with and as peers of the other departments. “We have 203 technologists that work in the Business Technology Group so we invest quite heavily in building our own solutions rather than buying shrink-wrapped products from the marketplace.” This focus on developing solutions in-house is partly the result of necessity, Wilkins says, as eight years ago there wasn’t much out there already for the relatively new independent energy sector. “There aren’t many specialist software vendors that deal with how
7
you support retail energy in the UK – because we couldn’t afford to go to SAP and buy their solution when we were a young company – so we had to hire a lot of smart software engineers and do a lot of that primary platform development ourselves.” In-house innovation
Keeping the software engineering team engaged has been key to enabling the flow of innovation, by providing regular research days
8
and encouraging contribution to open source communities. A good example is the successful research and development project that resulted in natural language processing techniques that works out what a customer is asking for in an intelligent way. Wilkins adds: “It handles a good proportion of our inbound customer contact traffic now via mail but also in our mobile platform, so customers can chat to what they think is an agent but it is an artificial intelligence brain and it’s available 24/7 helping fix a direct debit, find out what the last bill was or even submit a meter reading.” It was important to Wilkins that Ask First, as this product is called, wasn’t seen by customers as a barrier to good service or as a deflection technique. He adds: “We wanted Ask First to actually answer the question, not just give back some standard request. So when we build a product, there is instrumentation inside the product to make sure we know who is using it and what questions they’re asking.
First Utility Helps Customers Optimize Their Energy Consumption Using DataStax Enterprise Company Background First Utility is the largest independent energy supplier in the UK, servicing more than one million households. The company is focused on disrupting the legacy, slowchanging utilities industry through innovative new applications that deliver total transparency and help customers understand and manage their energy consumption. First Utility has a number of “firsts” to its name: it was the first supplier to offer dual-fuel Smart Metering to UK households, the first to offer an consumer energy analytics platform and the first to offer fully automated video meter reads in its mobile app. Business Objectives – Drive Better Customer Experience Before adopting the DataStax Enterprise (DSE) distributed database platform, First Utility sought to achieve two main goals – develop a modern platform to support a disruptive energy startup through innovation and evolve a highly efficient business model that allows us to offer consistently market leading prices to our customers – DSE supports both of these strategies. First Utility drives innovation through applications such as “My Energy”, a core component of the company’s digital proposition that helps customers optimize energy consumption and lower their bills. Many households now use the Smart Metering service on a monthly and even weekly basis, and First Utility seeks to bring more of these value-added applications to its
customers via DataStax Enterprise. Each smart meter produces up to 17 thousands meter readings per year. Most households have two meters – gas and electricity – and First Utility supplies nearly one million homes. That’s a lot of data to store and process within the My Energy platform and doing it in an affordable way is why they chose DSE. “Investing in digital engagements creates higher customer lifetime value, and First Utility is focused on delivering applications that build trust and create long-term profitable relationships with our customers,” said Bill Wilkins, CIO/CTO, First Utility. “DataStax Enterprise offers the data scale and analytics capabilities we need to bring these new innovations to market.” DataStax Enterprise – Database for Cloud Applications First Utility realized it needed a new platform that could store and manipulate large amounts of data for their My Energy and other applications, so the company adopted DataStax Enterprise. DSE is a distributed database platform based on the open source Apache CassandraTM database. DSE’s masterless architecture ensures very high availability and linear scalability to support the uptime and performance requirements of cloud applications. First Utility was initially drawn to using open source Apache CassandraTM, but realized that DSE’s integrated Analytics capabilities based on Apache Spark provided functionality not readily available
elsewhere. The company also quickly realized that DataStax could help them adopt a “digital shift” mindset and adopt the skills needed to create next-generation applications. When first undertaking their digital transformation, First Utility considered utilizing prepackaged software solutions that did not address their broader data management ecosystem. However for the long run, the company wanted its own framework for creating new applications and pursued a database platform that could accomplish innovative application delivery. Results – Drive Customer Retention Since rolling out the data platform with DataStax Enterprise, First Utility has grown its footprint in DSE. It started as a strategy to support a modern innovative new platform. However success there has spawned the desire to bring the benefits to more traditional areas of Energy I.T. and have deployed the framework in the Customer Care and Billing platform – a mission-critical, business facing system. With DSE, First Utility was the first company to offer an energy data analytics platform that shows how much energy customers are using and spending to help them optimize their usage. First Utility can now see that customers who use the platform regularly use 5-6% less energy and save, on an average, £45 a year based on an annual spend of £900. Customers are also happier, and stay with them 60% longer than before.
We also track customers through our digital platform and through our voice platform so we know if they subsequently call back in. This way we know that people that use Ask First have a very high percentage of satisfaction.” Identifying differentiators
When choosing whether to invest in its own solutions or to work with what the market has to offer, the deciding factor for Wilkins is whether First Utility can differentiate in some way. It has its own modern technology platform that uses very few third party technology players and therefore has a very low cost of ownership associated with it, but there are solutions that First Utility looks to external partners for. Wilkins adds: “Typically, if it’s a generic requirement and we can access it at a decent price and we think the price scales reasonably with our business model then we will buy. We don’t want to build for the sake of building.” Building something bespoke together with carefully selected partners is also an option, and is
“We invest quite heavily in building our own solutions rather than buying shrinkwrapped products from the marketplace” what Wilkins decided to do with the customer billing platform when its own system was no longer able to cope with the company’s growth. “We scanned the market and we found a multi-product billing platform in Israel from a company called LogNet Systems. We had fewer than 50,000 customers at the time and LogNet was willing to work with us at our relatively small scale and treat us like a very important customer. So we then embarked on a three-year project to jointly develop a UK energy billing system - the system we’re on today - and one that we’re very confident will get us way up into the Big Six territories.”
11
The Big Six he is referring to, of course, are the major players in the UK’s energy market including British Gas and EDF. So what does Wilkins think sets First Utility apart from these giants? From a business perspective, he says, it is the technology platform. “The economics of our technology platform is far superior because it’s more modern and with that comes cost advantage. Also, it follows that it is much more agile, much more nimble. Agile technical platforms enable agile businesses.” My Energy
The customer-facing My Energy platform, which was introduced in 2014, is another critical differentiator. It enables customers to understand their energy use in a way that can actually lead to savings. Wilkins says: “It shows you things like how you’re consuming energy versus people in your neighbourhood. Whether you’re more efficient or less efficient. It shows you how you might want
12
to save energy through energysaving calculators. It customises hints and tips for you. It shows you how your bill will change over the next six months based on your individual tariffs and individual consumption levels.” It provides our customers tailored information that typically leads to a five percent reduction in energy use of those who sign up for it. Great for the customer and the planet – but also great for First Utility, as it is a popular tool. “It’s very clear from our analytics that the more time people spend on our digital platforms, the longer they stay with us and the happier they are with our service. Many companies would look at investing in something like My Energy, which is completely outside of the required for what you need to operate in the energy space, as a luxury, maybe not an appropriate use of investment. Actually, it’s turned out to be as we believed it would be: a very good business investment.” In 2015, video meter reading
capability was added, which means a customer can simply hold the camera to the meter to submit a reading through the mobile app. “Although we led the introduction of residential smart meters, we are pragmatic and realise that not every UK household will have one soon,” adds Wilkins. Another important area of focus for First Utility is optimising its business model. Wilkins explains: “Technology plays a lead role here, as you would expect. A less conventional approach is to risk using emerging technologies to reduce the footprint of expensive commercial software. An example here is the use of Cassandra and DataStaxx to upgrade our meter data management store – improving our scalability, performance whilst slashing our vendor costs.” First Utility also makes use of a cloud-based voice platform from LiveOps by Unify Communications. “Not owning a large data centre allows us to focus on our business and allow other professional organisations use their economies
of scale to improve our efficiency. We have gone beyond using services like Amazon and Google for compute power and storage and use cloud-platforms for one of our most critical applications – supporting the voice channel for our customer contact centre.” Collaborative working
Wilkins also made the decision to put Google Apps inside First Utility, firstly because as CIO, he didn’t want to manage the email infrastructure. He explains: “In the same way I don’t want to manage the data centre or air conditioning or power supplies, as those things don’t differentiate us and there are experts out there already. Amazon is a great example: it knows more about how to do efficient data centre management than I ever will. And Google knows more about email and delivering a web-scale infrastructure for collaboration.” And Wilkins has witnessed a real transformation thanks to Google Apps, with staff working together,
real-time on shared documents, making use of Google Hangouts and even creating live broadcasts – Hangouts on Air – to run “townhalls” that update the business community on new innovations in data. It has also freed the company from what Wilkins calls ‘attachment hell’, which is an added bonus. The issue of scale comes up once again when the subject turns to the future of First Utility which, Wilkins says, includes the continual optimisation of its business model. “We have quite a large percentage of our resources analysing the data that comes out of our contact centre and our business process to see where the squeaky wheels are and see how we can automate better. To make us a more efficient machine.” The Business Technology Group will continue to focus on product development, particularly around mobile and My Energy, looking at what it can offer to First Utility’s growing number of customers.
w w w . f i r s t - u t i l i t y. c o m
15
Point 3, Opus 40 Business Park Haywood Road, Warwick, CV34 5AH
01926 320 700 www.first-utility.com