Last updated on June 8, 2023
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, and 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 technology advances, the utilities industry is also experiencing a general increase in the velocity of change fueled by evolving consumer demand, policies and regulations, physical and cybersecurity requirements, environmental factors, and competitors. To occupy the “top spot” in the market, utilities organizations must find ways to surpass unwavering reliability and become industry innovators.
Take electricity retailing, the final sale of electricity to an end consumer, as an example. These companies likely don’t generate, transmit, or distribute electricity. Their core offering is the retail experience. Think about how your other retail experiences have changed in the past decade. Do you do most of your shopping in brick-and-mortar stores or regularly place orders via phone calls? Probably not. You’re more likely to order your new shoes or groceries or a replacement phone charger online or through a mobile application. As consumers, we’ve grown to expect this retail experience across the board. Utilities companies are no longer the exception.
So, how can a utilities organization prepare to meet current customer demands and prepare to respond quickly to future disruptors? Agile product development.
WATERFALL & AGILE
Many utilities companies employ the Waterfall project management methodology, where work is divided into phases. 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. You cannot move on to the next phase before the previous one has been completed. The major downfall is that this approach takes time… a lot of time.
Waterfall methodology also opens the door for a lot of questions: Who approves the proposal? What committee approves the design? If we reach the build phase, but the steering committee wants to add more project requirements, do we have to regress into the design phase again? Who is going to test the product? What do training needs look like?
Increasingly, companies are moving from Waterfall to Agile. Agile is built around self-sustaining, cross-functional teams that are empowered to answer these questions for themselves. Agile also requires teams to take their big ideas and break them into incremental steps that can go from ideation to deployment in just a few weeks, defined as a “sprint.” This style of work is ideal for iterating on an existing product.
The true value of Agile lies in the ability for an organization to make smaller, less costly iterative improvements to existing systems, without committing to huge technology projects. However, while Agile does offer the clear speed advantage, there are elements of Waterfall product development that have enormous value. Establishing a clear business case, for example, is a cornerstone of the proposal phase that should not be overlooked in an Agile project.
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 provider that can get their customers the products and information they need the fastest will win out.
The utilities industry isn’t insulated from the macro market changes happening around us. Instead, they’re the companies that need to adjust to market trends early and often. Those that do will have greater advantages over their competition and be better positioned to quickly respond to industry disruptors. Agile is a tool that can help you keep up with those trends without overcommitting to a new direction, especially as economic uncertainty continues to percolate.
If you’re curious about learning more about what Agile may look like at your company, fill out the form below to connect with one of our consultants.