Agile has its origins in software development, and therefore most associate it with big tech companies. The name itself – Agile – evokes thoughts of being nimble, dynamic, and responsive to change. Does the word “Utilities” evoke those same thoughts? Likely not.
When people think about electricity, gas, mail delivery, sewage, transportation, or water, they think of something that is static, consistent, unchanging. In many ways, companies in the utilities industry strive for this association. A great utility is one that simply works, without interruption, and is consistent across all consumers.
Due to the massive amount of infrastructure required to provide these goods and services, utilities have historically been publicly owned and regulated by public utilities commissions. However, primarily driven by advances in technology, utilities are becoming increasingly deregulated and privately owned. This shift has had a profound impact on electricity generation, electricity retailing, mail delivery, and the transportation industries. Beyond providing a good or service that is unwaveringly reliable, the utilities that will occupy the “top spot” in the market will be those that are agile.
Take electricity retailing, the final sale of electricity to an end consumer. These companies likely don’t generate, transmit, or distribute electricity. Their core offering is the retail experience. Now think about how your other retail experiences have changed. Do you go to stores as often, or phone a company to place an order? Probably not – you’re more likely to place an order online or through a mobile application. If I were consulting a company in the utilities industry, and they didn’t have that online-mobile foundation established, I’d argue this as priority one. Either way, what’s the methodology with which they deliver for their consumers?
Waterfall & Agile
Many utilities companies employ the Waterfall methodology, dividing work into phases where each phase is dependent on the previous phase to move forward. Terms for the phases vary across industries, but essentially you progress through a proposal phase, design phase, build phase, test phase, and finally the deployment phase. The major downfall is that this approach takes time… a lot of time. Who approves the proposal? What committee approves the design? We’re in the build phase, but the steering committee wants to add more requirements, so are we back to design? Who is going to test the product? Do we need to train them so they can test effectively? Sound familiar?
Increasingly companies are moving away from Waterfall to Agile. Agile is built around creating self-sustaining, cross-functional teams that are empowered to answer these questions for themselves. Agile also requires that teams take their big ideas, and break them into incremental, shippable items that can go from idea to deployment in a few weeks, defined as a “sprint”.
Why should utilities consider Agile?
When it comes to offering seasonal products, responding to natural disasters, or responding to increasingly aggressive competition in a deregulated market, the retail electric provider that can get their customers the products and information they need the fastest will win out.
The same can be said for electricity generators, as they adjust to the decreasing costs and increasing efficiencies of renewables and finding ways to incorporate those into their fleets. Or, mail services, as they adjust to very real competition and ever-changing consumer behavior. Or, telecommunications companies adjusting to broadband increasingly being considered a utility. Utilities aren’t insulated from these macro changes, and are in fact the companies that need to adjust to them early and often. Those that do will have greater advantages over their competition.
If you’re in the utilities industry, I’d urge you to seriously consider whether or not you can be successful without being Agile.