AGL Energy, which was founded almost 180 years ago and is today one of Australia’s biggest utilities with over three million customers, has put digital transformation at the heart of its 2017 corporate strategy.
In his presentation to investors at the annual general meeting this week, CEO Andrew Vesey highlighted the important role digital would have in the company’s overall transformation program and in driving productivity and unlocking growth.
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The company will commit as much as $300 million over three years, with a healthy chunk going into capital expenditure.
The goal is to deliver on the following elements:
- Foundational Capability Significant investment in core technologies, processes and people to enable platform for transformation;
- Digital Adoption Digital enablement of all key customer interactions (e.g. sign-up, billing, issue resolution, moving house);
- Signature Moments Deliver digital customer experiences at least equal to the best available experience in any industry, product or service.
Vesey said AGL expected to deliver improved customer acquisition and retention, improved productivity and the accelerated adoption of digital interactions. He later revealed that over a million customers have registered for digital billing.
Internet of Things
Quite apart from the marketing benefits that might attend better customer engagements, organisations like AGL are set to reap big wins from the Internet of Things if they can get their digital house in order. Already the company has installed over 50,000 digital meters, and in the years ahead technologies like predictive maintenance should deliver stronger cost outcomes.
According to Vesey, “Today we have announced an indicative $300 million capital expenditure program over three years to drive the digital transformation of our customers’ experience. This is a key component of the delivery of our strategic framework to embrace transformation, drive productivity and unlock growth as the energy sector evolves.”
It its most recent results, released this week, AGL revealed a statutory loss after tax of $408 million for the financial year ended 30 June 2016 (FY16). In a statement to the ASX coinciding with the results, the company said this was $626 million less than the previous financial year, primarily reflecting significant items associated with the exit of gas exploration and production assets announced in February 2016 and with changes in the fair value of certain electricity derivatives.
Statutory operating cash flow after tax was $1186 million, up 13.6 per cent.