26 May 2021
How Origin’s Digital Transformation is helping to get energy right for customers
Origin Executive General Manager, Retail, Jon Briskin's speech to the Australian Energy Week Conference, 26 May, 2021.
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I would like to begin by acknowledging the traditional custodians of the land we are meeting on today, the Bunurong Boon Wurrung and Wurundjeri Woi Wurrung peoples of the Eastern Kulin Nation and pay my respects to their elders past, present and emerging.
It’s been almost two full years since I last stood here at this conference to talk about how customers would engage with energy in the future.
A lot has happened since then. Including the acceleration of the energy transition that was already underway.
The predicted “energy future” we have been preparing for over the past few years is no longer in the future – it is here and now.
At Origin, we really started to put the foot to the floor on our digital transformation more than 5 years ago.
All in anticipation of an energy system that is smarter and cleaner, more electrified and connected. Where the role of data to inform decisions and solutions is key, and the role of digital to enable these solutions critical.
Customers have more power than ever before. And customers have more choice.
Take “James and Lisa” for example. They live in suburban Melbourne with their two school aged children, and like more than 2 million other Australians, they have rooftop solar.
They have set up smart plugs around the house to help them run appliances like their dishwasher and washing machine during the day to maximise the use of their solar energy. But they also have a home battery, so the solar energy they don’t use during the day now goes into their battery for use later.
James’ work car is an EV and they have a smart charger that is part of an Origin trial with ARENA. The smart charger helps optimise the vehicle’s charging. Charging the car with clean energy from their solar system during the day, or cheap off-peak power from the grid.
In the evening, they can use the energy stored in their home battery and in the near future, their EV battery to power their home.
They are also part of Origin’s Victorian Virtual Power Plant trial with the Victorian Government. Where they have agreed to make their battery available to support the network at times of peak demand, and they get paid for this.
And like more than 4 million other Australians, they have a digital smart meter that connects all of this and provides over 17,520 points of data per year.
All of this is here and now. Not in some far imagined future.
The worlds of energy, data and digital have converged.
The key role for energy retailers in this world is to help make it simple and easy for customers to benefit. Energy retailers who can do this will thrive.
This includes making sure that we are designing for all customers – not just for James and Lisa. Because while they have the means to adopt these technologies and the desire to actively manage their energy, not all customers do.
The ambitious and bold digital transformation journey we have been on at Origin has all been designed around getting energy right for our customers today and in the future.
And there are three key areas of our digital investment that have been critical.
The first is turning our traditional energy retail business into a digital first retailer. The second is our recent strategic investment in UK clean-tech start-up retailer Octopus Energy. And the third is our range of future energy products and services that are already enabling us to provide tailored solutions to customers across our portfolio.
When we accelerated our digital transformation journey 5 years ago, we did so with the ambition to create the world’s best digital energy experience.
This required us to become a “digital first” business and to provide customers with simple, smart, seamless digital experiences to meet their rising expectations.
We transformed and improved our existing digital channels, expanded our range of digital features, and built the capability to adapt and rapidly respond in our digital channels.
We did this by supercharging investment in our own internal digital capability and created a best in market digital and analytics team. We transformed our systems and processes to be more nimble, flexible and scalable.
Digital is now the dominant way that customers engage with us. Digital service interactions have increased by 295 per cent since 2018.
Digital customer experience has significantly increased. Our digital Net Promoter Score is positive 27, and our mobile app currently has a 4.5 star rating on iOS. Our TrustPilot rating is Excellent.
Our cost structures in retail have reduced - we have removed over $100 million of cost out of our business.
Digital sales of core and adjacent products like broadband have materially grown. Digital sales, including wins and moves, are up 149 per cent since 2018.
The capabilities required to sustain digital performance have been transformed. As a result, we can now rapidly and continuously deploy new features on our website. For example, in 2018 we used to do one digital release every 2 – 4 weeks, now we can do more than 20 releases a day.
The key to the success has been building out the breadth of service, while ensuring ease of use and building awareness.
And importantly ensuring all along the way that the customer is at the heart of all that we do by designing with customers to meet their needs and constantly optimising our channels to build on customer feedback and insights.
All of this work has radically improved the customer experience. But it was only ever the beginning. The building blocks and the foundation that would set us up for the next phase of evolution and growth to help us keep pace with continually rising customer expectations and a rapidly changing energy market.
Our strategic partnership with UK based energy Octopus Energy is going to take things to the next level.
A year ago, we announced a strategic partnership with this pioneering technology and energy leader that has taken the UK energy market by storm with their revolutionary proprietary customer service platform Kraken.
We have taken a 20 per cent equity interest in Octopus and have the license to Kraken in Australia.
Kraken is unlike any other energy retail customer service platform in the world. It’s built from the ground up for energy retailing and is geared around the customer’s needs and their relationships, rather than the meter.
It is very challenging to genuinely become a customer-focused retailer, when the systems you use are all geared around the meter, which of course is not the customer.
The Kraken tech platform is exciting, but what is even more exciting is the operating model and culture that the platform enables.
Octopus’ customer service teams are set up in a way that is completely unique.
Rather than handoffs across departments, like sales, service and credit, small teams of 10 ‘energy experts’ service their own designated group of 50,000 customers, looking after all their needs for their entire life with the company. From the moment they join until they leave. No transfers and hand offs. Every time you contact Octopus you will be serviced by one of the same 10 people, who are empowered to solve your enquiry, whether it’s a new home connection, a bill enquiry or payment, a natural gas connection, or a rooftop solar enquiry. It is personalised, small business quality service from a large energy provider.
And customers love it, with Octopus consistently rated the best UK energy retailer. Octopus was recently voted Uswitch.com energy supplier of the Year in the UK for the second year running. In this independent survey of over 17,000 people, Octopus won half of the 14 categories including best customer service, best account management, best billing service and best online services.
And since we announced our partnership in May 2020, Octopus has continued to grow.
Their UK customer numbers continue to grow by around 100,000 a month.
They now have over 2.2 million UK customers. In Australia, where we talk about “customer accounts”, this is equal to about 3.6 million customer accounts - the size of a large Australian retailer.
And other leading retailers around the world are seeing the value too. Joining Origin in licencing the Kraken platform are E.on and Npower. In the past 12 months, Octopus has established a strategic partnership with Tokyo Gas to enter the Japan market, and has also launched in the US and German markets.
We are already well on our journey to replicating this model, and success, at Origin.
We have been busy tailoring the Kraken platform for the Australian market and migrating our teams and our customers to the new platform.
We currently have more than 100,000 customers being serviced on Kraken today. Our next target is to hit 200,000 customers by 30 June this year, before rapidly scaling to get all our customers on this platform by the end of 2022.
Feedback from Origin customers has been outstanding so far with a “happiness index” of 73 per cent, and employee feedback has been even greater at 83 per cent.
While the foundational transformation of our digital customer platforms has helped make dealing with Origin simpler and easier – Kraken is helping take our customer service to the next level by providing smart and innovative back-end systems and processes.
Just as we can already deploy new digital releases quickly and easily, we now have a customer platform that will allow us to deploy new products and services to market in a fraction of the time possible under legacy systems.
Today’s energy market demands this level of flexibility and adaptability.
If our digital customer platforms are our shopfront, and Kraken is how our customer service teams work and operate, then the final part of getting energy right for our customers are the products and services we deliver.
For the past few years, we have been quietly investing in, and developing, digital smarts that will plug directly into Kraken and into our digital customer platforms to provide customers with seamless, intuitive, smart energy solutions that benefit them but also work to support a smarter, cleaner energy grid.
This includes the development of an Artificial Intelligence (AI) cloud automation platform that can help orchestrate and optimise energy supply and demand at scale for customers across the NEM.
Using this platform we have built a Virtual Power Plant (VPP) with over 52,000 connected services totalling 131MW of capacity across the NEM – that’s already the size of one unit at a gas fired power station and it’s growing constantly.
This is made up of hundreds of batteries, smart solar systems, smart EV chargers, hot water systems, large commercial customers, and thousands of residential customers.
Our VPP connects all of these services virtually and uses data and AI to orchestrate and help move electrons around the grid to balance out supply and demand in the most efficient way possible.
For example, when supply is high and demand is low, we are able to direct connected services to absorb some of that supply. For example, getting hot water systems to charge up during when solar generation is at its peak to act like a battery.
Alternatively, when demand is high but supply is low, we can direct batteries or EVs to deploy their stored energy into the grid or to their household. Through demand side response, we can also ask customers to reduce demand or shift demand to another time when demand is lower.
By virtually orchestrating existing energy infrastructure across the network using digital smarts, this provides an efficient alternative to investing in new generation capacity, and this is important for keeping energy bills down.
How else does this help get energy right for customers? At a household level, it means cleaner and more efficient energy – we can use advanced algorithms to determine the cleanest and most cost effective way to power your home.
And through smart connected devices in your home, you will be able to choose the level of control or influence you want to have over how your home is powered. You can have full automation if you want to set and forget. Or you can choose how and when you want to participate.
A working example of this is our customer demand management platform Spike that we have developed with US clean-tech start-up OhmConnect. Spike is unique - a gamified experience developed with the team behind games like “Words with Friends” and” Farmville” to make energy saving fun and rewarding.
Spike provides customers with the opportunity to earn cash rewards for reducing their energy usage during nominated ‘Spike Hours’. We launched Spike in late 2020, now have over 34,000 customers on board and have just surpassed $1 million in cash rewards to customers.
Customers are actively participating and enjoying the platform, with over 1,000 smart devices connected to the platform already, and some of the most engaged customers earning more than $300 in cash rewards in less than 9 months.
Spike customers are also much less likely to leave Origin than the rest of our customer base.
And while it is still early days with Spike, the potential for demand response to play a meaningful role in supporting the network was shown in California last summer. During an extended heatwave, OhmConnect users reduced demand by approximately 1GWh and helped the network avoid black-outs.
In addition to demand management, we are also running a smart EV charging trial with funding from ARENA and have launched a fully managed EV fleet management solution for our business customers.
EV uptake is growing rapidly around the world, and slowly starting to gain some momentum here in Australia too. By 2040, we expect EVs to add about 22TWh of electricity demand to the NEM.
With EVs set to play a critical role in helping to decarbonise the transport sector, we are committed to helping accelerate the uptake of EVs in the Australia market starting with business fleets, followed by solutions for households that will be made much easier for us to launch at scale as we transition across to Kraken.
We are currently witnessing the evolution of an exciting new energy world, one that is cleaner and smarter and that is good news for everyone.
The investments in digital and data that we have made at Origin over the past decade have put us well in front of our peers.
And we are truly excited about the new products, services and benefits we have already been able to share with customers like James and Lisa.
And as we rapidly scale our migration to Kraken and scale up other products and solutions, we are looking forward to delivering a further step-change improvement in customer experience.
All designed with one goal in mind – to continue to get energy right for our customers, community and the planet, both here in Australia and globally.