26 June 2024

White paper: Energising Innovation


How energy companies can embrace innovation

There is a widely accepted view that innovation is a good thing. The word itself dates from the Renaissance, when the world was embracing culture and new ideas in its transition to modernity.

Innovation is seen as something to be cherished and desired, but it is not always positive. The world is littered with examples of innovation that, quite frankly, failed to meet the expectation of their creators. Who now remembers the Microsoft Zune “a revolution in portable music players” and “the next generation of entertainment”? The company spent an estimated $290 million on it from launch in 2006 to its discontinuation in 2012. Looking further back there was New Coke, the launch of a new formulation of the soft drink so it would appeal to a wider consumer base. The relaunch backfired and classic Coke was reintroduced three months later.

These failures, however, are perhaps the exceptions to the rule. For every failed product launch, you can identify plenty of innovations that were spectacularly successful – Apple’s iPod – “1,000 songs in your pocket.” and the continuing success of the Rubik’s Cube, which has sales of more than half a billion, for example. Nestlé’s success with variations on the KitKat chocolate bar is a masterpiece of marketing innovation.

But what about hard evidence for innovation? Many have looked at what makes an innovative company.

One consulting firm that has done so is McKinsey. In 2023, it released the results of an in-depth survey into what makes companies innovative. It looked at the trajectory of 650 companies between 2012 and 2022 and found that companies that were identified as innovative growers delivered excess annual shareholder returns was 11 points higher than that for Global 2000 companies.

There are also many examples from the world of business of companies that failed to innovate and have fallen from their once seemingly unassailable positions at the top of the tree.

In 2004, video rental company Blockbuster employed 84,300 people worldwide and operated more than 9,000 stores – today there is only a single store, in the city of Bend in Oregon.

In 2008, the year after the launch of Apple’s first iPhone, the technology firm Blackberry had a market capitalisation of $78 billion. It would sell 50 million smartphones at its peak, around 20% of the entire global market at the time. The company no longer makes its own branded phones, and its market cap has dropped to just over $2 billion.

Where innovation comes into its own is in fast-changing industries and sectors, particularly those being disrupted by technology.

The energy sector is changing rapidly as disruptive technologies and new business models remake the traditional energy landscape. The sector has also seen tumultuous change over the last few years with numerous suppliers to both industrial and commercial (I&C) and residential markets going out of business. The challenges of competing within the UK energy market are likely to be exacerbated by the growing pressure on the industry to help manage the transition to Net Zero and an increasing number of new entrants.

Innovation comes easy to some companies, such as Procode and Ferranti.

Since 2006, Procode has been building and delivering apps, technology products and cloud-based platforms that reduce cost-to-serve while at the same time delighting users, improving customer experience and reducing churn.

Ferranti is a cloud first, customer-centric organisation with a sole vertical focus on energy and utilities. It has over 45 years of experience in building a prospect-to-cash platform for operators in the energy and utility market.

The companies have joined forces to publish a new white paper – Energising innovation: Why the energy sector needs to embrace new ideas and technology or be disrupted out of the market – which explains why today’s suppliers and intermediaries will have to embrace existing and new technologies such as smart meters, the cloud and artificial intelligence to remain relevant.

Download a copy of the white paper today.