The better the question
What if the natural energy that powered your future was human?
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 identified three major areas to focus on:
- 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
Transforming into a customer-led business
Digital adoption and employee training lie at the heart of TNB’s approach to transform its retail arm to become a "Retailer of Choice".
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.
A key customer engagement initiative TNB Retail had established is myTNB, available on app and portal platforms. Since it was launched, it has been widely used by customers, with over 4.8 million subscribers – more than half the total number of energy customers in Malaysia.
To improve customer engagement with myTNB even further, the team took a human-centered approach and 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 EY UtilityWave Platform, a cloud-based platform that supports new services to be developed, tested and iterated with customers. The platform enabled myTNB to incorporate technologies such as AI and machine learning to deliver an improved customer experience.
As a result, customers can look forward to two upcoming features for the app, namely:
- An energy budget manager that empowers customers to set alerts when they reach a certain level of energy usage, helping them to better manage their monthly consumption.
- A supply interruption alert whereby myTNB users receive alerts 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 over 1 million smart meters.
“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.
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 solution areas including solar, battery storage and EV, energy efficiency and energy advice, helping to gauge customer appetite.
“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.
A number of these energy solutions have been piloted and launched, and 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 compared to over 80MW generated at the end of 2020.
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 revolves around its people in the newly formed 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 understanding 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.
“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.”
Securing employee engagement and internal buy-in is critical to the success of any transformation.
The EY team’s experience in learning and development has helped to develop TNB Retail’s future workforce, through the establishment of The Retail Academy. The Academy uses a mix of formal and experiential learning through exercises and projects to build employees’ skillsets. This includes skills for roles such as service designers, product owners, data scientists, and front-line workers, with a strong focus on customer experience. The Academy has helped TNB Retail unite its people around a common purpose: to deliver customers a truly world-class experience.
TNB Retail has also embarked on a transformative program to reinvent how its people work together. A “network of teams” model was designed by EY to build on the key principles of customer centricity, accountability and empowerment, all while working as a team.
This new way of working removes a typical top-down management style, enabling employees to deliver faster, better and more effective results for both customers and the business as a whole. As a completely new initiative, this is being piloted across TNB Retail’s customer-facing business in 2021.
Notable achievements of the transformation include:
- The establishment of a new customer-led retail division comprising over 4.5k employees.
- Segmentation of 9.4 million customers, enabling TNB Retail to better meet their needs.
- Delivery of new digital experiences to customers, with over 1 million customers now benefiting from smart meters in their homes, and more than 4.8 million of TNB's customers registered and using myTNB app.
- A growing solutions business, incubating multiple beyond kWh solutions within its innovation hub such as solar, electric vehicles and energy efficiency.
- The establishment of the Retail Academy, where more than 1.3k employees are benefitting from their first learning journey.
- The introduction of a new agile way of working that facilitates quicker responses to ever changing customer needs.
The better the world works
A customer-led and agile company
TNB's transformation is an example any organization that wants to become more customer-centric can follow.
The benefits of TNB Retail’s transformation were immediately evident when COVID-19 hit. As Datuk Megat explains: “The strategies and methodologies proposed by EY proved to be providential when the COVID-19 pandemic reached Malaysia’s shores and impacted our day-to-day business. Valuable customer insights were gained during the height of the pandemic, which influenced our plans to further enhance our processes, systems, structure and people, while ensuring there was no disruption to our daily operations.”
Many customers with smart meters benefited from clearer information on their energy consumption and usage, and others were able to pay their bills easily through the app. Usage of the myTNB app almost tripled during the pandemic, confirming the value customers placed on these digitalization efforts.
Employees also appreciated the special support that was put in place to check on their health and well-being over this challenging time. During the national Movement Control Order in March 2020, EY leveraged its strategic partnership with SAP and Qualtrics to design and implement a health check survey for TNB Retail employees.
“We are very appreciative of EY’s strong collaborative spirit in helping to co-create our retail strategy and operating model,” says Datuk Megat. “The EY project team has promptly responded to our needs and provided practical, yet innovative solutions and options to address any issues raised. We are thankful of the team’s willingness to go the extra mile and assist us on our transformation journey. The co-creation exercise with our employees provided opportunities for everyone to feel that they owned the transformation and raised their commitment and engagement levels throughout the journey. Our TNB staff were also able to expand their capabilities via knowledge-sharing sessions during this project with EY.”
“We work on the basis of action and take a long-term view to support TNB Retail, and in doing so we build trust. It is great to be able to bring capabilities from across the firm and sector knowledge from around the world to positively impact a client’s journey,” says Philip Rao, EY Global Client Service Leader for TNB.
The company is now positioned to help Malaysia tap its abundant renewable energy sources and improve its portfolio of renewable energy and smart energy solutions, which will provide lasting benefits to Malaysians. The EY organization continues to play a crucial part in this ambition by enabling TNB Retail to become a successful, sustainable retail energy provider.