Since the 1970s, utility companies have grown principally through mergers and
acquisitions. This industry consolidation has resulted in organizations with
diverse business processes (e.g., customer care, outage management, asset management,
financial management) reflecting the legacy operating company practices. Associated
with this business process portfolio is a software portfolio, including
homegrown and purchased applications (e.g., customer information systems, general
ledger systems, work management systems). This business and technology redundancy,
with long investment recovery timelines, has resulted in significantly higher
operating and maintenance costs.
Over time, utility companies have found that these sets of duplicative business
process and technology portfolios result in operating inefficiencies and are
difficult to adapt to new business requirements (e.g., operational excellence
programs, new customer programs, leveraging new technologies) as they emerge.
These requirements are driving companies to transform their business processes
and the associated technology foundation.
Transformation Is the Key to Improving
As utilities have refocused on their core businesses, they have embarked on
business process transformation initiatives to realize capital and operating
benefits. These transformation initiatives typically include rationalizing similar
processes across the company especially those that span different operating
areas. For example, many utilities continued to sustain multiple independent
customer call centers with separate policies, procedures and technology
for each of the legacy operating companies. A common business transformation
initiative is to consolidate the call-handling processes and then to combine
these call centers to allow the same resources to support multiple operating
companies. This rationalization process enables the company to better balance
its workload across the call centers.
Some companies adopt an approach that is targeted to a specific business process,
such as customer service, as described above. This focus allows companies to
establish an initial process, or methodology, to rationalize business processes
and the associated support systems. These companies then move into another area
to refine the methodology to continue the transformation and evolve to a Service-
Oriented Architecture (SOA) platform. In many cases, this focused approach is
coupled with a required technology upgrade or regulatory mandate.
Other companies adopt a broader, enterprisewide approach that includes multiple
business processes as part of a higher-impact corporate transformation to improve
operating effectiveness, customer service or shareholder returns. As a result,
these companies embark on an integrated program and methodology to transform
their businesses, supported with a proactively designed and built SOA environment.
These companies understand that while these methods and environments will serve
as the initial foundation, this foundation will continue to evolve as the company
moves ahead with its transformation activities.
A key element to enable this business process transformation is technology.
Given a diverse application software portfolio, a new technology platform based
on SOA offers key benefits:
- Leverages existing technology investments. SOA is a system design
technique that does not require wholesale replacement of business systems.
Rather, SOA focuses systems on individual capabilities or services. Business
and technical architects are then able to expose these services from existing
systems in a manner that supports SOA designs. As a result, companies are
able to continue leveraging existing technology investments such as enterprise
resource planning, customer information, asset management and work management
- Offers business process and technical flexibility. SOA also supports
more flexible business and technical designs. This flexibility is driven by
the consistent business processes resulting from transformationmodeling activities.
These processes are then encoded in SOA services. As a result, corporate restructuring
and partnerships (e.g., adding a generation facility, merging with another
company, integrating with a new company) become easier through the use of
these consistent services because one side of the business transaction is
already well-defined. The key to enabling this flexibility is the collaboration
between business and technology teams. This collaboration will help ensure
that the technical solution is positioned to meet not just current, but also
starting a transformation process, a company should have a sound understanding
of the business operations and functions. Most utilities have not documented the
myriad business processes in use across the enterprise. Rather, there are multiple
utility industry business models including the International Electrotechnical
Commissions (IECs) Common Information Model (CIM) specification and IBMs
Component Business Model (CBM) for Energy and Utilities (see Figure 1).
The CIM was developed with the participation of multiple utility companies,
technology vendors and standard bodies. In recent years, it has received increasing
interest from utilities seeking to rationalize their technology portfolios and
improve their independence from technology vendors.
IBMs CBM was developed as part of a structured process that focuses on high-value
transformation efforts that are enabled through SOA. A key distinction between
CIM and CBM is that CIM models utility industry business processes, while CBM
is integrated into an overall methodology that yields a transformation road
map to deliver business value. However, both models portray typical utility
industry processes and should be considered as a starting point for developing
a utility companys individual SOA design. For example, a company that is targeting
improved asset optimization might focus on the distribution network asset optimization
and asset design activities in the IBM CBM for utilities.
Key Elements of SOA?
SOA is a technical concept. Therefore, it can be reflected as shown in the
reference architecture (see Figure 2).
The business services shown in Figure 2 are intended to provide an initial
context for the business service classification. They include interaction services,
process services, information services, access services, partner services, business
application services, business innovation and optimization services, IT service
management services and development services.
Interaction services provide the capabilities required to deliver IT
functions and data to end users, meeting the end users specific usage preferences.
This includes traditional channels, like Web browsers and portals, as well as
pervasive devices such as mobile phones and PDAs.
Process services provide the control services required to manage the
flow and interactions of multiple services in ways that implement business processes.
Information services provide the capabilities required to federate,
replicate and transform data sources that may be implemented in a variety of
ways. Many of the services in an SOA are provided through existing applications;
others are provided in newly implemented components; and others are provided
through external connections to third-party systems.
Access services enable access to existing enterprise applications and
enterprise data from the Enterprise Services Bus (ESB). A set of access services
provide the bridging capabilities between legacy applications, prepackaged applications,
enterprise data stores and the ESB. These access services expose the data and
functions of the existing enterprise applications in a consistent way, allowing
them to be fully reused and incorporated into functional flows that represent
business processes. Existing enterprise applications and data leverage the business
application and data services of their operating environments, such as CICS,
IMS, DB2, etc. As these applications and data implementations evolve to become
more flexible participants in business processes, enhanced capabilities of their
underlying operating environments for example, support of emerging standards
can be fully utilized.
Partner services provide the document, protocol and partner management
capabilities required for business processes that involve interactions with
outside partners and suppliers. This includes, for example, the handling of
industry-specific document and message formats.
Business application services provide runtime services required for
new application components to be included in the integrated system. These application
components provide new business logic required to adapt existing business processes
to meet changing competitive and customer demands of the enterprise. Design
and implementation of new business logic components for integration enables
them to be fully reusable, allowing them to participate in new and updated business
processes over time. The business application services include functions important
to the traditional programmer for building maintainable, flexible and reusable
business logic components.
Business innovation and optimization services incorporate monitoring
capabilities that aggregate operational and process metrics to efficiently manage
systems and processes. Managing these systems requires a set of capabilities
that span the needs of IT operations professionals and business analysts who
manage the business operations of the enterprise.
These capabilities are delivered through a set of comprehensive services that
collect and present both IT and process-level data, allowing business dashboards,
administrative dashboards and other IT-level displays to be used to manage system
resources and business processes. Through these displays and services, it is
possible for the business and IT personnel to collaborate to determine, for
example, what business process paths may not be performing at optimum efficiency,
the impact of system problems on specific processes or the relationship of system
performance to business process performance. This collaboration allows IT personnel
and assets to be tied more directly to the business success of the enterprise
than they traditionally have been.
IT service management services include capabilities that relate to scale
and performance; for example, edge services, clustering services and virtualization
capabilities that allow efficient use of computing resources based on load patterns.
The ability to leverage grids and grid computing are also included in this category.
While many of the IT service management services perform functions tied directly
to hardware or system implementations, others provide functions that interact
directly with integration services provided in other elements of the SOA through
the ESB. These interactions typically involve services related to security,
directory and IT operational systems management. The security and directory
services include functions involving authentication and authorizations required
for implementing; for example, single sign-on capabilities across a distributed
and heterogeneous system. Monitoring allows managing service-level agreements
and the overall health of the system, which provide security, directory, IT
system management and virtualization functions.
Development services are an essential component of any comprehensive
integration architecture. The SOA includes development tools, which are used
to implement custom artifacts that leverage the infrastructure capabilities
and business performance management tools, which are used to monitor and manage
the runtime implementations at both the IT and business process levels. Development
tools allow people to efficiently complete specific tasks and create specific
output based on their skills, their expertise and their role within the enterprise.
Business analysts who analyze business process requirements need modeling tools
that allow business processes to be charted and simulated. Software architects
need tool perspectives that allow them to model such elements as data, functional
flows and system interactions. Integration specialists require capabilities
that allow them to configure specific interconnections in the integration solution.
Programmers need tools that allow them to develop new business logic with little
concern for the underlying platform. Yet while it is important for each person
to have a specific set of tool functions based on his or her role in the enterprise,
the tooling environment must provide a framework that promotes joint development,
asset management and deep collaboration among all these people. A common repository
and functions common across all the developer perspectives (e.g., version control
functions, project management functions, etc.) are provided in the SOA reference
architecture through a unified development platform.
The ESB serves as the communications channel for sharing services among the
different systems. A challenge for technical teams is to clearly define the
services to be exposed over the ESB. By exposing too many services, the design
becomes overly complex and ineffective due to the large number of services that
are available. By exposing too few services over the ESB, the design includes
compound services that are also difficult to reuse because too many functions
are bundled together.
By using business process models such as the CIM or CBM and the SOA reference
architecture model, companies can develop a reusable services portfolio to serve
as the foundation for the SOA design. These services can be used to integrate
existing technology investments and ultimately provide a flexible technology
environment that can be adapted more efficiently and effectively to meet
new business requirements. A partial list of services for a typical utility
company based on CBM, and compatible with the CIM, is presented by business
area in Figure 3.
So, what we have seen is that utility industry consolidation has resulted
in having diverse business process and technology portfolios within the same
corporate enterprise. This duplicative business environment leads to inefficiencies
that may affect customer service and reliability, limit shareholder returns
and limit business flexibility. Business transformation is the only viable approach
to resolving these inefficiencies.
Business transformation starts with corporate recognition of the need for change.
This change, when implemented with an SOA design, provides a flexible platform
that continues to leverage existing investments to help improve service delivery,
business flexibility and, ultimately, shareholder returns.