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Why digital platforms are the key to the Octopus vision
27 September 2019
It’s been an exciting time for Octopus recently. Hot on the heels of our acquisition of Seccl, which we anticipate will revolutionise the investment industry, Octopus Energy has been making big waves of its own in the energy supply sector.
At the end of August, Octopus Energy announced it would be taking on the management and supply of energy to all customers of Co-Op Energy, Flow and GB Energy. While the Co-op brand will continue, all GB Energy and Flow Energy customers will now become fully-fledged Octopus Energy customers.
The deal also includes a joint venture with the Midcounties Co-operative, which will provide support and investment into more than 80 local community energy projects, and work to increase the amount of energy purchased from community schemes across the UK.
Octopus Energy now has more than one million customers (1,200,000 customers is closer to the mark), and is the eighth largest energy supplier in the UK, serving around 5% of homes across the country. That’s something to be incredibly proud of, especially considering it had just over 340,000 customers this time last year.
Much of this growth is down to the proven advantages of Kraken, which is the Octopus proprietary technology platform that allows us to scale the business efficiently and to ‘onboard’ large numbers of new customers, without raising prices or compromising on customer service.
Putting technology front and centre
It’s no coincidence that both of our recent announcements – within financial services and energy – relate to technology platforms. At Octopus, we believe in bringing about the digital transformation of sectors where customers demand and deserve better service and where innovation can make a real difference.
In a competitive market such as energy supply, our technology gives us a clear edge over the competition. In the words of Phil Ponsonby, the CEO of Midcounties Co-operative: “Octopus has developed what we consider to be the most innovative and customer-focused technology anywhere in the industry today”.
Why are platforms game-changing?
Some of the most valuable and innovative companies in the world operate a platform business model. Companies like Amazon, Google, Alibaba and Facebook have grown rapidly by building digital platforms that build communities and marketplaces that instantly connect businesses and customers all over the world. This connectivity extends far beyond a mere website.
Think of a digital platform as a self-contained ecosystem, greater than the sum of its parts, and designed with the specific needs of the inhabitants of that ecosystem in mind. No two digital platforms are the same: each is a complex combination of software, hardware, internal operations and networks, all functioning as separate, but connected entities. They can be used to exchange and share goods, information, knowledge, services and more.
Understanding the commercial benefits
Companies that understand the value of digital platforms, and are able to use them in the right way, can expect to reduce their running costs, improve revenues, collaborate more efficiently (both internally and with new partners) and follow innovation and market trends.
Platforms are hugely appealing from an internal business perspective too. One of the biggest benefits of a digital platform is that it improves communication, and the exchange of information, between different teams or functions within the same company. Business processes that used to take weeks to complete can take seconds, teams that never spoke the same language before now know intuitively what each other is thinking.
But above all, platforms are where companies can create a better user experience and build uniquely strong connections with customers. Too many companies, particularly large, well-established businesses, have forgotten what it’s like to have people as their primary focus. Digital platforms are designed with the aim of putting people first.
The importance of first-mover advantage
You may be asking yourself, if digital platforms are so invaluable, and carry such clear business advantages, why aren’t more companies creating them? The truth is that it’s not that easy. For most companies, innovation on this scale demands a dramatic overhaul of a business, both in terms of how things are done (how the business functions) and why they’re done (how the business thinks).
Building and operating a digital platform isn’t a decision to be entered into lightly, it needs to be a fundamental part of a company’s growth strategy. And once you decide to build it, you need to be able to do it quickly.
For Octopus, our fast-moving, innovative nature gives us a competitive edge. Octopus has always been a customer-obsessed business, but as we’ve grown, we’ve become increasingly aware of the role technology and innovation should play in making life easier for people. It’s been an exciting couple of months for Octopus, and we’re delighted to now be reaching more than a million customers, but in many ways, the exciting part begins now.
Digital platforms – such as the ones we’re building within the financial services and energy supply sectors – have the potential to help us achieve our vision of ‘Octopus in every home’ faster than we could have imagined just a couple of years ago.