Article

Digital Risk: Creating confidence at the edge of possibility

Utilities

How is digitisation impacting the Utilities sector?

The race for competitive edge has never been fiercer, innovation and resilience never more essential to success. Pursuing advantage means boldly acknowledging risk and going confidently forward - leaning into new possibilities undaunted by scale or complexity. Leading organisations know that people, processes and technology combine to continually reshape the frontiers of possibility – from the adoption of cloud, the shift to remote working, automation and artificial intelligence.

We can create the confidence to marshal these possibilities to action and help the leaders driving digital transformation create sustainable value.

Responding to the risks that digital brings

Thriving in the new normal requires adapting to new technologies to stay competitively relevant while mitigating the risks to the business.

Safe and ethical implementation of artificial intelligence and machine learning
Create the confidence and understanding to successfully embrace radical and dynamic new decision support systems in order to explore new frontiers in value creation
  Risk conduct, regulation and culture in the digital world
Lean into the possibilities of digital while confidently controlling the risks created by having a closer relationships with the consumer
Transforming digitally with confidence
Step forward into possibility, while being prepared for the unknown
  Controlling disruptive technologies, cloud, data and agile ecosystems
Create positive change through controlled revolution; protect BAU activity whilst embracing disruption
Digitisation of risk, compliance and control management
Transform effectively and safely by embracing digital strategies for managing digital risks
 

Consider: How do these digital risks impact you?

Organisations should build the digital confidence required to thrive in the “digital world”

Board
Are we getting the right level of information about the digital change happening in the business?
  CIO
How can I confidently embrace new technologies and mitigate the risks of digital to allow for a more confident and effective business?
CMO
Am I able to harness the technologies and innovations that get the business closer to the customer and set us apart from the competition?
  CTO
How can I build the trust in digital that’s necessary to overcome transformation fears and realise transformation success?
CISO
How can I help the business embrace digital, build safe and secure solutions by embedding risk management and security throughout the innovation and development cycle?
     

Utilities: 2021 Digital Risk trends

Shift to Renewables

Trends

Utilities are decarbonising and shifting towards a renewable focus, driven by new capabilities and choices for customers around energy use 

Risks

  • Failure to adopt and adapt quickly enough
  • Failure to deliver efficiency and cost-competitiveness
  • Fundamental shift in sector operations risking efficiency and buy-in
  • Generalising the customer demand and experience 

Questions

  • Renewables: Do you have a strategy, budget and reach planned as you move away from commodity cost volatility? How is this determined? How is success measured?
  • Efficiency: How will you deliver efficiency of power generation and transmission? How will you be competitive in service delivery?
  • Customers: Are your customer journeys inclusive? Do you know your customers, their needs, and how to interact?

Scaling Digitisation & Automation

Trends

Digital tools and ‘Smart’ functions are being scaled to run tasks and optimise performance and productivity through the energy network, delivering increased service reliability and reduced costs for customers

Risks

  • High costs of implementation
  • Security of smart tools: Integration of functions in daily lives and risks posed through unwarranted access
  • Cyber, human, data and service risks posed through unwanted access to digital systems
  • Productivity loss through system malfunction and/or lost knowledge, feeding through to utilities consumers
  • Missed returns from digital transformation due to limited adoption

Questions

  • Strategy: What is your budget, reach, and plan for digital tools? Which processes could be optimised to deliver increased reliability and security?
  • Governance: What is the your governance process for technology? How do you track performance? Would your current governance controls pick up technology as a thing to be managed?
  • Security: How do you protect new technology and its role in relation to service delivery? How do you protect customer experience and data? How do you manage, track & respond to cyber, human and service risk?
  • Data: What backup processes do you have in place? How will you manage and ensure compliance?
  • Competitiveness: How do you balance change, consistency and security? 

Migrating to the cloud

Trends

Companies are adopting a cloud-first strategy and migrating legacy systems to the cloud, improving business operations, security and consistency

Risks

  • Costs of implementation and upkeep
  • Cyber risk of systems being managed online and the damage that could be posed by any breach
  • Data risk and loss through migration and storage
  • Lack of cloud strategy and migration plan
  • Limited data and infrastructure visibility, control and security 
  • Inappropriate delivery model resulting in gaps and inefficiencies

Questions

  • Security: How do you manage access and protect against risk currently? How will you adjust this infrastructure in the cloud?
  • Data: What is your current architecture? How scalable / flexible is your landscape? How do you secure & protect against data loss?
  • Governance: How will you encourage organisation buy-in? Can you control the speed and extent of your Cloud transformation? Where does responsibility end?
  • Control: How do you secure data and ensure regulatory compliance in both the front and back-office functions? Do you have oversight of your global landscape (costs/digital)?
  • Delivery: what delivery model will you adopt for cloud implementation?

Business continuity and buy-in

Trends

As organisations adopt increasingly digitised ways of working, back and front-office processes require new and prioritised thinking to enhance and protect operations

Risks

  • Failure to realise value from and benefits of investments in the face of aging assets 
  • Limited business capacity to support and drive digital infrastructure 
  • Failure to adopt a forward-looking and evolutionary mind-set towards technology and process optimisation, resulting in loss of market competitiveness 
  • Limited cyber risk awareness and defences 
  • Compromising of data privacy and confidentiality 

Questions

  • Tools & Technology: How to fast-track a rework of aging service assets to deliver consistent and reliable service supply? Is your technology investment achieving measurable outcomes for your stakeholders? Is this value communicated and accepted within the back and front-office functions? 
  • Buy-in: How to drive a fundamental mind-set change through digital transformation? How do you maximise technology adoption and minimise cultural resistance? How do you deliver your business ethics and practices to customers, the organisation and business community?  
  • Security: How do you track and ensure security? Do you implement constant monitoring and alerts for security and compliance requirements? 
  • Privacy: Do you implement it from the beginning, into all systems and operations? 
  • Data: How consistent, connected and transparent is your data? Do you run analytics to optimise performance? 

Ecosystem Resilience

Trends

Success in digital transformation in utilities is dependent on numerous energy sources and suppliers, requiring durable asset management and processes to deliver services reliably and consistently

Risks

  • Failure to successfully and securely integrate third parties and customers
  • Risk to customer experience and security through ecosystem-delivery model
  • Failure to deliver and update evolving business models across ecosystems
  • Failure to embrace a culture of connectivity and collaboration digitally

Questions

  • Supply chain: How in control are you? What is your supplier risk profile? What is your asset and delivery management process? How do you track security and delivery?
  • Support: How do you support suppliers, employees and customers in newly digitised environment?

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