Background and challenge
A global provider of advisory and engineering services to power, water and gas utilities had been successfully helping its customers with the following industry drivers and modernization challenges:
- Decarbonization, including an increased focus on lower greenhouse gas emissions generation and on increased system efficiency
- Decentralization, including the need to accommodate micro-grids and individual, distributed power generation (e.g., residential solar energy generation)
- Digitalization, including the modernization of systems and increased integration of various data streams via automated smart systems, such as smart meters
- Reorganization, including the redesign of organizational structures to meet these challenges, especially with an aging workforce
The client enlisted L.E.K. Consulting to determine the drivers, size and growth outlook of the advisory and engineering services market. It also wanted to understand the landscape and current level of investment maturity in each of its target countries. We were also tasked with determining the most attractive service lines to prioritize, distilling the key points of the company’s value proposition to prospective buyers, and summarizing both the urgency of its challenges and the “right to win” it had been granted by its existing customers.
Approach and recommendations
We interviewed local participants in all of the client’s geographies and end markets, including our client’s customers and other customers. We also spoke with market observers, experts and potential competitors to get their perspectives on the adoption of various solutions, the level of individual players’ performances in each of those markets and more. Finally, we conducted desktop research to understand and characterize the degree of need in the market.
We concluded that our client was well positioned to benefit from growth in the overall market, but was even better positioned to help its utilities customers navigate the digitalization process, capitalize on the development of smart cities and leverage the adoption of smart meters. Moreover, we recommended ways the company could prioritize for growth based on market maturity, and we validated its positioning for growth in new capabilities and technologies (e.g., micro-mobility, smart streetlights and smart waste management). Most importantly, we concluded that our client does not have a true direct competitor, as no other company offers a singular focus on the utilities sector along with a full range of services.
Results
Our in-depth assessment not only validated our client’s value proposition and characterized the level of need for its various market segments, but also validated its business plan, including opportunities for expansion, revenue growth potential and profitability. Our analysis also identified ways it could use its capabilities to solve the four main challenges facing utilities today, and provided it with a strategic plan, tailored by end market and geography, that takes into consideration each segment’s maturity, needs and expected growth. We submitted our findings in a final report to support the company’s growth strategy development and further support discussions with potential investors.
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