How to shape digitalisation in the energy sector – a new approach for systematic business innovation

Abstract

Renewable energies and digital technologies are two of the strongest drivers for the ongoing energy transition. Due to current transformations new business models appear, while conventional ones vanish. This threatens incumbents, but also provides manifold opportunities. The current transition leads to falling barriers, changing roles and markets, and the appearance of new players – this rapidly changing environment allows agile companies to obtain new fields of business. The challenge is to shape new business models, which will successfully transform or extend current businesses. Therefore, we developed a novel approach to hands-on tackle this challenge in five phases: understand the environment, ideate new value propositions, cluster and select promising value proposition bundles, design business models around them, and evaluate their viability. This approach guides companies from endless possibilities to concrete options that can be chosen or rejected based on quantitative assessment – dissolving paralysis and enabling action. We successfully applied the approach to utilities in Germany, India and Italy. In this paper, we present our systematic business innovation approach by explaining the general process, a sample application with Enel Global Infrastructure & Networks and give our 10 key recommendations for successful business innovation projects tackling the digital transformation challenge in the energy sector.