Why people and tech are the fuel for customer-centric transformation
The better the question
What if you could power your future by empowering people?
Malaysia’s TNB decided to adopt a customer-centric, digital-first approach to reimagine its future.
In 2015, Tenaga Nasional Berhad (TNB), Malaysia’s national energy provider, identified a number of disruptive trends (deregulation, digitization, decentralization and decarbonization) that were changing the landscape in which they operated. As a result, it embarked on a bold 10-year transformation program which aimed to secure its future and prepare the organization for the challenges of today and opportunities of tomorrow.
TNB’s leadership team recognized that to successfully address these trends – and open-up new opportunities – wide-scale changes were needed in its business strategy, operations, digital offering and customer offering. The company realized that in order to maximize its impact on every single customer in Malaysia, it had to become more than just a kilowatt/hour business.
TNB had identified three major focus areas for change:
- Transition its energy generation sources from fossil fuels to renewables.
- Digitise the grid to enable decentralized power generation, greater use of renewables and better energy management amongst customers.
- Improve customer experience with new products and services, increasingly delivered through digital channels.
TNB realized that it would be able to maximize its impact on every single customer in Malaysia by becoming more than just a kilowatt/hour business.
Recognizing the need for change: Restructuring TNB Retail
Following this analysis, TNB decided to restructure its retail arm (TNB Retail), which would enable the business to focus on better engaging with its customers, develop new digital solutions, become more agile, and support the delivery of its big renewables ambition.
To do so successfully, TNB Retail decided to work with a partner on this transformation journey. TNB Retail began to seek an external partner to not only help it deliver its objectives at speed, but to provide a critical external perspective, and the competences to help the organization enhance its internal capabilities.
Following discussions with the local Malaysian EY team and a visit to meet some EY Power and Utilities clients and professionals based in the UK, TNB Retail chose EY as its transformation partner. As TNB’s Chief Retail Officer, Datuk Ir. Megat Jalaluddin Megat Hassan, explains, “We learned that the EY organization has a strong professional team in the utility sector with experiences in working with the top European utilities. We knew they would understand our challenges since we could speak the same language. We really wanted a partner who would share in-depth insights into developing a practical operating model for the Malaysian market, and work with us to co-create the best solution for TNB Retail, our people and our customers.”
Other factors in the decision included a commitment to bring global capabilities and experience to TNB, including the transfer of people to EY ASEAN to build a dedicated local Power and Utilities team, along with an ability to collaborate with other energy companies in the transformation of the retail business.
As a joint transformation team, TNB Retail and EY focused on three immediate priorities:
- Humans at center: Create a customer-led retail business and structure, while transforming TNB Retail employees into an agile-driven workforce and providing employees the opportunities and skills needed to make the business more customer-centric going forward.
- Innovation at scale: Create a retail business, structure and culture which enabled customers to better understand and manage their energy usage.
- Technology at speed: Establish a solutions business based on data to drive CX-led innovation and new business models in adjacent markets including electric vehicle (EV), solar, and connected homes.
The better the answer
EY worked with TNB to create a tech-enabled transformation
The transformation improved the customer experience and put the customers and employees in control.
At the heart of TNB Retail’s transformation journey is the desire to empower the customer. Becoming a customer-led organization means empathizing with customers and creating greater value through services that are more affordable, reliable and sustainable.
As the primary energy supplier for an entire country, this involves providing smart energy solutions that address the future energy needs of every customer – from a large organization that’s keen to explore solar solutions for multiple office premises to a homeowner hoping to better manage their power consumption.
The starting point was defining TNB Retail’s customer segments: large business and government sectors; SMEs and residential customers. This helped to identify how to enhance customer interactions across physical and digital channels, understand customer needs and better meet their differing expectations.
TNB Retail developed a key customer engagement initiative: myTNB, an app available on portal platforms that has become widely used. The myTNBapp now has over 5.5 million subscribers – more than half of the total number of energy customers in Malaysia.
To improve customer engagement with myTNB even further, the team identified a number of customer “pain” and “gain” points. Using this insight, the team developed digital prototype solutions or “microservices” for the myTNB app on the EY UtilityWave Platform, a cloud-based platform that supports new services to be developed tested and iterated with customers.
The platform, a product of EY’s industry knowledge and transformation capabilities, helped TNB incorporate technologies such as AI and machine learning to deploy smart meters, to monitor these to identify and resolve issues, and to enable processes to collect, store and analyze data to inform better decision-making. TNB can now track energy usage in real time to improve customer satisfaction.
As the development, testing and iteration of new services continue over the last 12 months, targeted customers are now able to enjoy two new features, namely:
- An energy budget feature that empowers customers with Smart Meters installed in their homes to set threshold alerts when they reach a certain level of energy usage, helping them to better manage their monthly consumption.
- Digital billing through the myTNB app, with a redesigned bill that is clearer for customers.
Another feature in the pipeline in 2022 is the Service Disruption alert, whereby customers with Smart Meters installed can receive alerts on myTNB when there is any disruption in the supply of electricity as well as when supply is restored.
These new app features also leverage on customer data generated from nearly two million smart meters. The delivery of new digital experiences benefits customers and companies alike.
“With an ever-improving app, and the roll-out of other digital technologies like smart meters, data analytics is now giving TNB Retail insights into its customers’ evolving preferences, faster than ever before,” says Mark Bennett, Partner, Consulting, Ernst & Young Advisory Services Sdn Bhd.
Making workplaces and homes smarter through constant innovation
Another important outcome of the transformation program was the establishment of a new solutions-based business, providing customers with innovative solutions to match their energy needs. By applying an iterative Voice of Customer (VOC) approach, the team was able to identify important customer needs and values which were unmet or underserved in the market.
From extensive customer research, new customer propositions were developed and tested with business and residential customers across different solution areas to gauge customer appetite. As a result, solar, EV and energy efficiency, and energy advisory solutions were developed, piloted and launched successfully, with battery storage another potential offering in the near future.
“Throughout the transformation journey, we’ve collaborated with TNB Retail and their customers to co-create innovative solutions,” says Sungkyu Chang, EY ASEAN Customer & Growth Leader.
As these new energy solutions continue to be piloted and launched, there is a growing demand for renewables and energy efficient solutions from both residential and businesses. For example, at the end of 2019, customers across residential, commercial and industrial sectors generated 25MW of renewable electricity, rising to 80MW in 2020. By the end of 2021 this figure had risen to 116MW.
Increase in renewable energy generation
364%
across residential, commercial and industrial sectors, from 2019 to 2021.
This means that TNB Retail is well-positioned to work with its larger customers in co-creating bespoke solutions for their energy needs. In fact, the next step in TNB Retail’s ongoing transformation is a collaboration with the Malaysian government to explore the potential for solar power at all government offices and facilities – another step closer to a greener, more sustainable future.
Throughout the transformation journey, we’ve collaborated with TNB Retail and their customers to co-create innovative solutions.
Developing new ways of working and skills through the TNB Retail Academy
Another important aspect of TNB’s transformation agenda focuses on its people – customers and employees – in the retail business, specifically ownership of the transformation, building new skills and embedding more agile ways of working.
When engaging with TNB Retail employees, the EY team focused on their concerns and the support they required to succeed. EY’s close collaboration with these employees has proven vital to the ongoing success of the transformation and has changed energy consumption behaviors across the nation.
“Every employee of TNB Retail must feel they own something, and that they’re able to contribute to the journey,” explains Datuk Megat. “That can only happen if there is a good co-creation mindset or mentality. This is the approach EY brought.”
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