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5 Reasons to Modernize with Cloud: Utilities Edition


Even before the emergence of the pandemic and the 2+ years of uncertainty that have followed, the utilities industry was undergoing major change.

Global clean energy and decarbonization initiatives were already demanding major change across the utilities sector — a situation that has now been compounded by geopolitical issues, supply chain delays, and a slew of other factors making it harder to stay profitable, let alone transform.

But utility companies that want to stay ahead in the future have no choice but to do just that — transform — and cloud modernization is an essential piece to the puzzle.

It’s understandable why organizations hesitate. Cloud modernization is an investment and must be executed the right way to avoid disruption. The long-term ROI on modernizing now is undeniable — companies that do will be able to operate with greater agility and take advantage of new technologies as they emerge to bring value to the business.

In this article, we’ll walk through five compelling reasons why the time is now for utility companies to modernize with cloud — plus why Protera is the right partner to help you do it.

Quick Takeaways

  • Top utilities industry performers are leveraging cloud technology to implement smarter, more agile procurement strategies.
  • Cloud modernization enables better connectivity with field devices and collaboration with third-party organizations to accelerate initiatives like weather resiliency and the clean energy transition.
  • By the end of 2025, nearly half of all utility monitoring and control systems will use cloud-powered IoT technology for more intelligent operations.

5 Reasons Utilities Companies Should Modernize with Cloud

#1: Agile Procurement

The pandemic and its ripple effects on supply chains and the economy have made an already complicated utilities procurement job even more challenging.

Inflation, a looming recession, sky-high commodities prices, shipping delays, geopolitical unrest — these factors and more have pulled the curtain back and exposed utility companies still trying to stay ahead with outdated systems.

CPOs and procurement teams need systems that deliver higher visibility, transparency, and agile capabilities to navigate this environment.

But McKinsey reports that the utilities industry noticeably lags behind others when it comes to procurement maturity, scoring a 2.0 on their 2022 CPO survey.

Protera Blog Utilities Procurement Lag

The cloud can help companies close this gap. In fact, McKinsey notes that the outlying high performers from their survey “have successfully led company-wide transformation efforts” — no doubt in large part digital — to achieve greater strategic capability.

#2: Smart Resiliency Planning

Weather is not a new consideration for utility companies, but the recent jump in significant weather events has put it at the top of the priority list.

Deloitte reports that there were 3,165 extreme weather events recorded globally in the 2010s and 3,536 in the decade prior. In 2021, financial losses related to weather events in the United States alone exceeded $1B.

Resiliency planning for utility companies not only minimizes financial loss but more importantly improves supply and demand handling before, during, and after weather events occur.

As Deloitte outlines in their report, this type of planning doesn’t happen overnight — it requires collaboration with government and NGO organizations and investment in strengthening infrastructure (among other things), but the cloud is a key foundational piece in establishing the intelligence and data analytics capabilities needed to optimize these strategies.

Further, the cloud allows for integration with other global intelligence systems that level up a company’s ability to continuously predict and prepare for weather events as they occur.

#3: IoT Enhancement

IoT technology has created new opportunities across the utilities industry to optimize field resources, achieve greater connectivity with field workers, and leverage automation to improve resource monitoring and enhance the customer experience.

Gartner reports that by the end of 2025, 40% of new monitoring and control systems will utilize IoT for more intelligent operations. IoT is made more powerful when it’s cloud-supported to handle Big Data, provide real-time updates, and eliminate any lingering dependencies on on-site infrastructures.

Utility companies that invest in the cloud now will be better equipped to advance their own strategies as IoT technologies and capabilities inevitably become more sophisticated in coming years.

#4: Elevated Customer Experience

Utilities is just one of many industries being challenged by elevated expectations around the customer experience.

But the challenge is compounded for utility companies by new entrants to their market (such as startups and automotive companies) that can provide the alternatives customers are looking for and have better tools and technologies to meet modern customer needs.

In an industry that has been comfortable for decades, the appearance of legitimate (and more agile) competitors is a new phenomenon.

Harvard Business Review cites technology as one of four key factors impacting the ability of established utility companies to maintain their positions as industry leaders. They must equip themselves with the right tools and technologies to compete with their digitally-native new counterparts.

The cloud, of course, is central to nearly any digital transformation effort today and is key for utility companies looking to elevate the customer experience with digital communication, centralized platform services, higher levels of automation, and similar new capabilities driving the modern CX.

#5: Accelerated Clean Energy Transition

As the world works to modernize the grid and continue decarbonizing, the cloud will enable key capabilities to help utility companies stay aligned. Cloud-powered 5G technology is essential to this effort, allowing data to be easily transferred from field devices to the cloud, where it can be better analyzed to drive action toward change.

Deloitte reports that the majority (58%) of utility companies already deploy cloud technologies for this purpose, meaning those still hesitating to make the investment are likely to soon fall behind.

Why Protera is the Best Partner for Utility Companies Modernizing with Cloud

Protera’s solutions are designed to help utility companies meet new and demanding customer expectations, navigate complex and changing macroenvironments, and operate with new levels of operational agility.

With Protera as your SAP modernization partner, you’ll experience:

  • Financial Governance - Real time dashboard of cloud costs and continuous monitoring of potential cost reduction and budget reallocation opportunities.
  • Data Security - Data intelligence and 24/7 security and monitoring to unearth insights as well as protect every layer of your company and data.
  • Operational Scale - Managed IT services team that manages, deploys, and backs up your enterprise assets so you can focus on projects up the stack.
  • Automation Experts - Fully integrated SAP and enterprise technology solutions driven by automation reduce risk and accelerate time to value.
  • Continuous Improvement - Embedded across Protera’s application and cloud-managed services model.

Contact us to start your cloud modernization journey.