How Tenaga is digitally transforming electricity in Malaysia

In a fight for relevance and to capitalise on the potential of digital, organisations today are reinventing strategies and building new roadmaps for future growth.

One such organisation with digital ambitions is Tenaga Nasional Berhad, the largest electricity utility in Malaysia, with a presence throughout Peninsular Malaysia, Sabah, Labuan and regional areas. The 70-year-old company is reshaping the electricity industry through the deployment of digital technologies.

“Tenaga is creating the grid of the future through greater digitisation and automation,” said Haji Adibi Ambak, head (customer and market) of distribution network division, Tenaga Nasional Berhad. “We have piloted smart meters and advanced metering infrastructure facilities for customers in Melaka, alongside the automation of operations.”

Speaking to CIO ASEAN on the sidelines of Malaysia 2.0 Summit with IBM in Kuala Lumpur, Ambak said such an approach is aligned to the organisation’s shift in focus towards smart grid technologies as the company plans to become a leader in smart utilities across Southeast Asia.

Tackling disruption head-on

“The energy industry was facing technology disruption with challenges such as addressing new technologies, market deregulation, energy security and reliability, alongside providing access to affordable energy services and maintaining environmentally friendly production and use of energy,” Ambak observed.

In response to these challenges, Tenaga embraced a ‘Reimagining TNB’ mandate that “involved actively pursuing future generation sources, especially in renewable energy and the grid of the future, leveraging on a smart grid framework,” said Ambak.

In the pursuit of digital transformation, and in the context of a smarter approach to energy, Tenaga partnered with IBM in Malaysia, leveraging the vendor’s smart grid technologies to refine the way utilities work.

“A smart grid delivers electricity through an electric infrastructure that is more distributed and more variable in operation than traditional grids as it is designed for sustainability and driven by a diverse set of supply and demand resources that will require optimisation to deal with the underlying technical uncertainty inherent to newer energy technologies,” explained Catherine Lian, managing director of Malaysia at IBM. “And the underlying financing and reward structures will be increasingly more market-based than regulatory and asset-based.”

The company’s plans for continued investment in digitisation and automation of the grid “will lead to improved performance and reliability, which will ultimately benefit customers,” Ambak said. Some of the early business benefits Ambak cites include better performance through enhanced productivity and efficiency and lower operating costs.

Transformation at work

Worker productivity has improved at Tenaga, Ambak says, through optimising business processes, eliminating unnecessary paperwork, and simplifying data collection. But Ambak acknowledged that initiating transformation both internally and externally is seldom straightforward.

“Some of challenges we faced were changing the way work is done and delivered,” he said. To help change the mindset of the company’s staff, Ambak “created a different way of doing business such as creating a strategic business unit and providing a mandate to get thing done differently with clearly defined terms such as efficiency, productivity and growth based on KPIs. This instilled better entrepreneurship skills and competency in driving the business for the future.”

Ambak and his team educated employees on the new direction of the organisation, and crucially, their role within that change. “Numerous engagement sessions with the different levels of staff were held and we continuously monitor our progress,” he added. “The journey to the top entails a shift towards a more performance-oriented, adaptive culture and being agile.”

Focus on the customer

In a direct message for businesses embarking on digital transformation strategies in Malaysia, Ambak says that irrespective of industry, success will be centred around “focusing on the customer.” Enhancing the quality and value of services delivered to customers is the purpose behind Tenaga’s digital transformation, he says.

He advises companies to “create a business model that will create more value to the customer and the company though digitisation.” Customers should be at the heart of the strategic plan. “When the customer is at the heart of the strategic plan, in our case – more than just a meter – it is about understanding the values and needs beyond kWh consumption. Businesses will then gain unparalleled loyalty that is a scarce asset today.”

“Our simple business philosophy at Tenaga is that it’s all about serving needs of people,” he said. “Businesses must be clear who they serve and understand these people well.”