Feb. 7, 2022 | InBrief

Business integration: The DNA of successful digital investments for utilities

Unlocking value begins with operational efficiency. And at its core, that efficiency begins with a focus on the employee

Business integration: The DNA of successful digital investments for utilities

With every change comes an opportunity to unlock value. For utilities, this value can take the shape in driving operational efficiency by connecting the needs of the utility employee with the technology that helps to facilitate his or her work. Achieving this efficiency is key for value creation. 

The utility industry recently has come to terms with the need to realize the following megatrends—all of which have challenged traditional ways of delivering service: 

  • Energy production through decarbonization: It has been estimated that 77% of new generating capacity added by 2050 will originate from renewables.  
  • Increased demand: Large sectors—such as transport and heating—are estimated to increase global demand by 62% by 2050.  
  • Power generation through decentralization: Triggered by the fall of the cost of batteries for energy storage, consumers have become the new “CLEC provider” in which they sell their excess electricity back to the grid.
  • Unlocking IoT potential through digitization: Advancements made by grid modernization, have provided the industry with the opportunity to connect automation and sensors to achieve efficiency while reducing cost.

Acknowledging a need for change, but struggling to find value 

At the time of its 2017 session in Davos, Switzerland, the World Economic Forum (WEF) published a study that those above trends had the potential of unlocking $2.4 trillion in value (e.g., operational efficiency, reduced O&M requirements, etc.) over the next 10 years.  

Nearly five years later, many utilities have invested in one or more of these technology-driven trends that, once implemented, fell flat on delivering its intended value. Even though technology can enable efficiency, it shouldn’t serve as the primary focus that guides the lifecycle of the investment. Regardless of what that entails—e.g., Enterprise Asset Management (EAM), Customer Information Systems (CIS), Advanced Metering Infrastructure (AMI), or Advanced Distribution Management Systems (ADMS)—the primary focus must be centered on improving the efficiency of the employee to avoid unexpected gaps that result in bottlenecks to business operations and customer service. 

Focusing on the utility employee from the start 

As utilities contemplate their second or even third wave of change, there’s an opportunity to learn from the past and develop a way forward. 

It begins by seeing the point of impact, which is the employee that will be impacted the most by change–many of whom still rely on clipboards and checklists to carry out their work. 

By understanding how their ways of working will change, the impacted underlying business processes will help inform the roadmaps to prioritize the critical tasks that need to occur. 

With this perspective, the utility can align technology investments with the fulfillment of business strategy and supporting goals. 

By maintaining the focus on the utility employee—and not on technology—the utility can realize operational efficiency faster, which serves to prevent years of delay and budget overruns. 

The needs of business operators must serve as the primary influencer for how the technology will operate to achieve this perspective. Like our DNA, which operates as the recipe book for our distinctive characteristics, the method of how we design the instructions on who we will become matters. 

In short, if digital investments are planned purely from a technology enablement perspective, then it should come to no surprise that the outcome will fall short of connecting with the utility employee.

Building better instructions requires an end-to-end understanding of the impacts toward the existing business architecture. This is achieved by enabling the necessary connectivity and visibility between IT and OT systems/assets to make data-driven decisions. In doing so, both sides will be certain that all IT applications and supporting assets are compliant with regulatory and business operation requirements.

Delivering short- and long-term value through business integration

Through business integration, a tailored, actionable plan that considers regulatory, innovation, and customer demands can be realized. When realized, this plan can inspire collaboration across the organization, shape future technology investments, and deliver both short-term wins and long-term business value. 

The first step begins with the identification of desired value by understanding the right success measurements to align with organizational strategy, technology, and industry. By taking this foundational step, utilities can increase the likelihood that technology investments will serve as the catalyst toward the realization of committed social, environmental, and financial benefits—all achieved through business integration.

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