E.ON’s first Chief Digital Officer: The conductor: leading the digital transformation
As Chief Digital Officer, Matthew Timms is leading the transformation of E.ON, one of the largest investor-owned utilities, into the digital age. And when he’s done, it may well be that his company will look less like an energy provider and more like a technology company.
by Marc Engelhardt
It’s easy to think of Matthew Timms as a conductor, standing on one of the bridges that crisscross E.ON’s modern glass headquarters like a man about to direct a symphony in a huge concert hall. Illuminated by a single beam of sunlight on this cloudy afternoon, he talks in low notes about his responsibility to orchestrate a transformation program that will forever alter the face of one of Europe’s biggest energy companies. “In the future, you’ll look at E.ON and you won’t necessarily say that we’re an energy company,” says Timms, E.ON’s first-ever Chief Digital Officer (CDO). “You’d probably say we’re a software or a technology company.” While Timms has been leading a Digital Business Unit since July 2016, he sees digitalization as an overarching task touching every part of the business: “It’s a massive undertaking.”
That might even be British understatement. With more than 43,000 employees and around 27 million customers in over 30 countries, E.ON is one of the world’s largest investor-owned electric utility providers. Since its conventional generation and energy trading businesses were combined in a separate company, Uniper, in 2016, E.ON’s focus is on renewables, smart energy networks and customer solutions. “It’s a totally different market,” says Timms, “one with significant pressure and huge competition, which is having an impact on our margins – as a business, we need to be far more agile, more nimble and more lean than we were in the past.” In E.ON’s engineering tradition, ten-year cycles for building a power station or a grid were normal. “Now we need to see projects that are delivering change within weeks or months.”
We need to adapt our business models and identify new customer services as everything moves into a smart world with smart meters, so that we stay relevant in the new era of smart energy.Matthew Timms, Chief Digital Officer, E.ON
Digital at heart
It’s a new culture, and Timms recognizes that changing the mind-set will not happen overnight. “Thinking digital at one’s heart is something you build over time.” Timms should know, since he has been in the business of digitalizing businesses before, at the software giant SAP as well as in the financial services industry. “The experience I’ve brought from financial services is the relentless focus on the customer,” he says. “Banking customers have moved online, and today we see the same thing happening in the energy business.” Forty percent of E.ON’s business already originates from online channels, and that is just the beginning. “We need to adapt our business models and identify new customer services as everything moves into a smart world with smart meters, so that we stay relevant in the new era of smart energy.”
As huge as the changes are, Timms emphasizes that it’s important to stay focused in the short term. “You can’t change everything at once, so we looked to all of the value pools across the business in E.ON and identified what we call big ticket items.” Seven in total – plus one for staff – they revolve around three big themes. “The first is looking at how you radically improve your customer and employee experience through digitalization. This entails rethinking your customer journeys and the use of technology to create a better understanding of them,” Timms explains. “The second part is how to increase your process efficiency to drive productivity and simplify your business.” The CDO plans to think all new business solutions, like solar and storage, digitally from scratch. “Finally, we identify new business models because digital allows you to do things differently than you would have done in the past: how we’re using data, how we’re transforming ourselves to become a more software-driven company and how to actually develop new solutions for our customers. All in all, digital drives business growth.” Timms emphasizes, however, that how a company manages a digital change within their organization is just as important as what they do with digital initiatives.
From smart grids to artificial intelligence
Predictive maintenance is one of the first big ticket items that Timms and his Digital Business Unit have kicked off. It’s where the traditional energy world with their assets in the field meets the digital future. “We spend a significant amount of capital expenditure in our network business making sure that there is resiliency and that the quality of our grids is as good as it can be.” With the expansion of smart grids, the CDO wants to extract data to decide where to invest, which assets to replace and how to reduce outages. “Our data lab,” says Timms, “is currently going through all of our advanced analytics and data. They build algorithms for the mid- and low-voltage cables or substations that make up our grid, looking at how we’re then deploying our field force out to those assets in the most effective way.”
Eventually, not only customers, but also all of E.ON’s devices will be connected to the Internet of Things of Energy. “Data from our wind farms, cables and substations will drive our smart network,” Timms explains. Artificial intelligence and machine learning should soon improve the yield from wind farms, thanks to algorithms that take into consideration each wind turbine’s wake and thus optimize the farm’s overall output. “For instance, you might want to upset the front ones slightly to give the ones behind more wind so that overall you’re getting more out of the wind farm.”
A team with a goal
Timms sees himself as an agent of changing the business and a capability builder. “My job is to try to increase the speed and the adoption within the organization and our own capabilities on digital activity.” Of course not everything happens in-house. Companies like Siemens are working with E.ON to help the energy provider reach its goals. “We’ve got our partnerships up and running,” Timms beams. Conducting E.ON’s transformation into the digital age certainly is a team effort and requires many new ideas from all sides.
That’s probably why the office floor Timms and his team are sharing is different from all the others at E.ON, offering creative space also in the shape of a very orange hut standing smack in the middle. “My team are people working in the Internet of Things, on data science or augmented reality, and there are lots of other places those people could work,” the CDO says. To keep them with E.ON, the common goal is even more important than the working space. “In some respect, we’re trying to change the way that the world is working and solve one of the world’s biggest problems, which is energy – it doesn’t get any cooler than that.”
Marc Engelhardt reports from Geneva on the UN and business news.
Picture credits: Bernd Schumacher
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