As-a-Service: The New Dawn for Utilities

Changing technology landscapes, growing competition and demanding end users are forcing utilities companies to make significant capital expenditures to provide next generation products and services. Stringent industry regulation prevents utilities from recovering these expenses by automatically passing them on to consumers through rate hikes. This puts the utilities under pressure to reduce their cost to serve as well as increase operational efficiencies to help maintain profitability and margins.

While utilities companies are increasingly adopting Smart Metering as a way to measure and process power consumption, there is less momentum in using a similar consumption-based model, for operations and technology. HfS Research suggests that the Ideals of the As-a-Service Economy, the emerging way of sourcing that is based on a more flexible, agile, and modular approach to drive business outcomes, provide a fresh opportunity for utilities to optimize their cost to serve.

In years gone by, sourcing was all about driving out costs and achieving incremental improvement to processes. Now, with on-demand software as-a-service and other digital technologies and more innovative contracting and engagements, there is a way to achieve the next threshold of value and “freshen up” the utilities sourcing industry.