Data stewardship in a digitalized Energy & Utilities sector
The utilities sector refers to companies that provide basic amenities, such as water, sewage services, electricity, dams and natural gas. Although they earn profits, they are often part of the public service landscape and are therefore heavily regulated. There are emerging opportunities for the power and utilities industry, as it leads the economy-wide clean energy transition. Today most power companies see rapidly expanding opportunities to address their customers’ increasing interest in clean energy and new ways to manage and control their use and cost of energy. This has a big impact on capital expenditure and fixed assets. Another impact is on information technology. Smart meters mean digitization and a rapid increase in the amount of customer data. At the same time data security and defense against cyberattacks must be in place.
How does this impact the Office of Finance?
Regulatory reporting processes and systems need to be flexible to deal with changes. For Financial Planning & Analysis the demand for actionable information is getting more divers. When new business models are investigated, strategic plans need to be evaluated against various scenarios. For investments in fixed assets, a business case needs to be calculated for the longer term to assess return on investment and how to fulfill capital requirements in the short and longer term. When a business case morphs into a multi-year project, the financial reporting needs to track the fiscal year with, for example, correct calculation of work in progress and the duration of the project.
And with increasing, highly reliable customer data from smart meters resulting in more accurate non-financial and financial data, in-dept analysis can be carried out on use and profitability, for example. This can be used for better market segmentation and makes it possible to improve offerings and pricing strategies by segment.
The Office of Finance as a data steward
To keep up with these developments the Office of Finance has to define its vision and strategy as well. In my experience, legacy systems tend to mean manual error-prone activities or intermediate spreadsheets are used to process and bring data from one system to another for budgeting, planning and reporting. Today, with even more data available, there is a missed opportunity to combine operational and financial data for profitability management impacting the bottom-line directly. With the right software platform in place, the Office of Finance can collect, process and provide better, faster and smarter actionable information as a data steward to business operations and management.
Now it is time to act and replace your legacy system.
If you want to learn more about the benefits that energy & utilities companies can gain with CCH Tagetik’s modern software, check here!