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Digitization And Utilities: The Song Remains The Same Featured

14 October 2016
(9 votes)

As in the telco market, energy suppliers now face the same transition to the digital economy as the one that telcos have made in recent years. There are lessons to be learned about how to make it work.

Just like telcos before them, utility businesses today find themselves at a crossroads. They’re leaving behind the old and familiar commercial world, where ways of doing business are well established…..and they’re entering the new, digitalized economy where commercial demands differ and experience is lacking.

The fact is that operating models, legacy supporting IT infrastructures and network asset communications and control systems are not presently primed to deal with the changing business practices required by the digitization of energy networks. This is principally because real-time management of infrastructure and instant response to customer needs are vital components of success in the digital economy.

Pointing this out is all well and good. The challenge lies in changing the status quo and adapting to the new set of demands, which is difficult for utilities because their legacy IT infrastructures have not been built to be flexible and to allow new, customer-friendly creative services to be developed and deployed with minimal impact and costs.

Furthermore, the control of network assets has historically been a function intended only to ensure healthy performance rather than to use assets as part of a flexible monetization strategy.

If utilities want to optimize their assets for new business opportunities, establish new billing models that will improve their market share and leverage operating scenarios (that require better forecasting and insights into optimal or sub-optimal regulating conditions) then things have to change. The question is, how?

All Change

At present, many utilities have little, if any, ability to use network assets in the new and flexible ways necessary to keep up with their evolving commercial goals. IT infrastructures have become barriers to progress, not designed to enable adaptability (changes can be slow and costly) and not built to allow new services to be easily developed and deployed. This is a data problem: Critically, data is locked-in to silos, meaning that the value it contains can’t be fully exploited to drive commercial decisions.           

Like telcos before them, energy players today have to take their network assets and integrate their performance with strategy in order to generate offers that maximize the commercial opportunity with each individual customer. This requires simplifying and automating processes that can in the end move the businesses ahead.

The Problem Is Data

What the utilities need to do is this:

Access to high quality data from any combination and type of asset in real-time.

The ability to leverage insights based on the right data and to control the assets accordingly.

Integration across IT infrastructures to support fast decision-making and adaptation to commercial changes, based on key business processes and time-critical data analysis.

Having high value data available to drive more effective commerce is a mission critical requirement for the modern utility to achieve commercial success. Failure to have this will not be acceptable. To spell out why, let’s examine some common use cases.

Trading Optimisation Is The Future Now

 

Utilities need flexibility in how they manage their assets. The more that can be realized in the same IoT platform, without the need to buy additional point solutions, the better. This Use Case addresses one example: Optimizing the use of distributed energy resources in real-time, based on specific market, customer and environmental conditions opens the possibility for the utility to direct energy where it generates the most profit. This delivers a balanced grid that compensates for the lack of cost-effective energy sources when demand is high and, in turn, is a path to enabling higher margin trades when prices are favorable.

To realize these gains, the utility needs to process all distributed energy resources and market data through one information management hub that drives the flexible use of assets in a commercially optimal way leveraging clean, high quality data that simplifies business processing. The proposed technology is directly connected to the new layer of algorithm-based smart applications and business services that can predict optimal use of resources. The result is the considerably heightened optimization of assets.

Another Use Case utilities commonly face shows what’s required to smooth the path to digitization.

Bimodal Service Innovation Is A Par Requirement For The Digitized Utility

Protecting legacy IT and, at the same time, enabling new, data-driven services and products to be introduced is vital – yet, as we’ve seen, legacy business systems support is not designed to enable dynamic monetization strategies based for products built on non-periodic, streaming data from new devices or events generated from interactions with external partners or customers.

To allow the development of new services in today’s landscape, a control point for data must be applied as close to the data sources as possible. This source must preserve existing data flows but, at the same time, allow for new applications and services to react to new data in a different way.

The requirement here is for an IoT platform that allows (or handles) any form of data flow (traditional, periodic, event based, streaming) to support the easy onboarding of new assets and portfolios, permit flexible mapping of asset data to business products and is adaptable to multiple monetization strategies for all assets.

Simplification Isn’t Simple Until You Make It Simple

Replacing legacy IT is rarely practical, and even less often desirable, for cost reasons. But, as the commercial landscape changes, how do you turn it into a lean, high-performing infrastructure fit for a modern commercial landscape? The answer is that utilities need to access a technology that accommodates the already wide and still growing range of assets in their networks with ease, feeding growing volumes of key information to business systems in real-time. 

If they can do this, the utility reduces costs for managing data across multiple silos, through a single data management layer. In so doing, it consolidates (and extends the life of) legacy point data solutions through one enterprise wide platform. The simplified business support that follows reduces network connection complexity.  The separation of business and network allows transformation to happen in both layers, without dependency to each other, in turn speeding up delivery of new services.

Data Management – Where Digital Success Starts

Today’s utility needs access to a technology that future-proofs both commercial strategy, now and in future. It needs to answer three key questions:

How can I offset the exponentially increased cost of new ways of doing business by maximizing the performance of my network assets as effectively as possible?

How can I overcome the limitations of siloed data sited across assets that results from a legacy IT that may prevent me quickly accessing data I now find is critical?

How can I manage network assets in a way that ensures new services can be identified and launched quickly enough that I can lead the market, instead of reacting to the strategies of my competitors?

Fortunately, the answers are available and leading energy companies are already deploying them. The latest data integration and management technology is a proving to be key strategic weapon for the utility in undergoing transformation. It provides a backbone from which assets can be profitably managed, data can be collected and processed in real-time, and new commercial opportunities can be identified.

 

Jonas Wejdin is Chief Utilities Strategy Officer at DigitalRoute. He has been with DigitalRoute some fourteen years and is currently responsible for the strategic market exploration and alignment of DigitalRoute software to long-term market trends; the purpose being to define the future direction of the DigitalRoute software and to create a technology fundamental to the continued successful growth of the company.

 

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