Business Intelligence: The ”Better Light Bulb” for Improved Decision Making

Although some utilities have improved organizational agility by providing high-level executives with real-time visibility into operations, if they’re to be truly effective, these businesses must do more than simply implement CEO-level dashboards. They must provide this kind of visibility to every employee who needs it. To achieve this, utilities need to be able to collect data from many disparate sources and present it in a way that allows people company-wide to access the right information at the right time in the form of easy-to-use and actionable business intelligence (BI).

The following statement from the Gartner EXP CIO report “Creating Enterprise Leverage: The 2007 CIO Agenda,” led by Mark McDonald and Tina Nunno (February 2007).

Success in 2007 requires making the enterprise different to attract and retain customers. In response, many CIOs are looking for new sources of enterprise leverage, including technical excellence, agility, information and innovation.

This statement holds true. But converting data into useful information for employees in different levels and roles creates a new challenge. Technological advances that produce exponentially increasing volumes of data, coupled with historical data silos, have made it extremely difficult for utilities professionals to access, process and analyze data in a way that allows them to make effective decisions. What’s needed: BI technology tools that are not only available to the C-level executive or the accounting department, but to everyone – civil and electrical engineers, technicians, planners, customer service representatives, safety officers and others.

BI solutions also need to handle data in a way that mirrors the way people work. Such solutions should be capable of supporting the full spectrum of use – from individuals’ personal content to information created by team members for use by the team and formal IT-created structured and controlled content for use enterprise-wide.

The good news is that BI has become more accessible, easier to use and more affordable so that people throughout the enterprise – not just accountants or senior executives – can gain insight into the business and make better informed decisions.

RIGHT-TIME PERFORMANCE MANAGEMENT

“The Gartner Magic Quadrant for Business Intelligence Platforms, 2008,” by James Richardson, Kurt Schlegel, Bill Hostmann and Neil McMurchy (February 2008), has this to say about the value of BI:

CIOs are coming under increasing pressure to invest in technologies that drive business transformation and strategic change. BI can deliver on this promise if deployed successfully, because it could improve decision making and operational efficiency, which in turn drive the top line and the bottom line.

Greg Todd, Accenture Information Management Services global lead for resources at Accenture, advises that monthly, or even weekly, reports just aren’t enough for utilities to remain agile. Says Todd, “The utilities industry is dynamic. Everything from plant status and market demand to generation capacity and asset condition needs near real-time performance management to provide the insight for people enterprise-wide to make the right decisions in a timely fashion – not days or weeks after the event.”

By having access to near real-time performance monitoring across the enterprise, utilities executives, managers, engineers and front-line operations personnel can rapidly analyze information and make decisions to improve performance. This in turn allows them more agility to respond to today’s regulatory, competitive and economic imperatives.

For example, Edipower, one of Italy’s leading energy providers, has implemented an infrastructure that will grow as its business grows and support the BI technology it needs to guarantee power plant availability as market conditions and regulations dictate. According to Massimo Pernigotti, CIO of Edison, consolidating the family of companies’ technology platforms and centralizing its data network allowed the utility to fully integrate its financial and production data analyses. Says Pernigotti, “Using the new application, staff can prepare scorecards and business intelligence summaries that plant managers can then access from portable devices, ensuring near real-time performance management.”

To achieve this level of performance management, utilities professionals need easy access to both structured and unstructured data from multiple sources, as illustrated in Figure 1. This data can be “owned” by many different departments and span multiple locations. It can come from operational control systems, meter data systems, customer information systems, financial systems and human resources and enterprise resource planning (ERP) systems, to name a few sources. New and more widely available BI tools allow engineers and others to quickly view near real-time information and use it to create key performance indicators (KPIs) that can be used to monitor and manage the operational health of an organization.

KPIs commonly include things like effective forced outage factors (EFOFs), average customer downtime, average customer call resolution time, fuel cost per megawatt hour (MWh), heat rates, capacity utilization, profit margin, total sales and many other critical indicators. Traditionally, this data would be reported in dozens of documents that took days or weeks to compile while problems continued to progress. Using BI, however, these KPIs can be calculated in minutes.

With context-sensitive BI, safety professionals have the visibility to monitor safety incidents and environmental impacts. In addition, engineers can analyze an asset’s performance and energy consumption – and solve problems before they become critical.

One of the largest U.S.-based electric power companies recently completed a corporate acquisition and divestiture. As part of its reorganization, the company sought a way to reduce capital expenditures for producing power as well as an effective way to capture and transfer knowledge in light of an aging workforce. By adopting a new BI platform and monitoring a comprehensive set of custom KPIs in near real time, the company was able to give employees access to its generation performance metrics, which in turn led to improved generation demand-and-surplus forecasts. As a result, the company was able to better utilize its existing power plants and reduce capital expenditures for building new ones.

BI tools are also merging with collaboration tools to provide right-time information about business performance that employees at every organizational level can access and which can be shared across corporate boundaries and continents. This will truly change the way people work. Indeed, the right solution combines BI and collaboration, which not only improves business insight, but also enables staff to work together in real time to make sound decisions more quickly and easily and to proactively solve problems.

With these collaboration capabilities increasingly built into today’s BI solutions, firms can create virtual teams that interact using audio and video over large geographical distances. When coupled with real-time monitoring and alerting, this virtual collaboration enables employees – and companies – to make more informed decisions and subsequently become more agile.

Andre Blumberg, group information technology manager for Hong Kong’s CLP Group, believes that user friendliness and user empowerment are key success factors for BI adoption. Says Blumberg, “Enabling users to create reports and perform slice-and-dice analysis in a familiar Windows user interface is important to successfully leveraging BI capabilities.”

As more utilities implement KPI dashboards and scorecards as performance management tools, they open the door for next-generation technologies that feature dynamic mashups and equipment animations, and create a 24×7 collaborative environment to help managers, engineers and operations personnel detect and analyze problems faster and more effectively in a familiar and secure environment. The environment will be common across roles and cost much less than other solutions with similar capabilities. All this allows utilities operations personnel to “see the needle in the haystack” and make quicker and better decisions that drive operational efficiency and improve the bottom line. Collaboration enables personnel to engage in key issues in a timely fashion via this new desktop environment. In addition, utilities can gain preemptive knowledge of operational problems and act before the problems become critical.

BETTER DECISIONS IMPROVE BUSINESS INSIGHT

Everyone in the organization can benefit from understanding what drives a utility, the key metrics for success and how the company is performing against those metrics (see Figure 2). By definition, BI encompasses everyone, so logically everyone should be able to use it.

According to Rick Nicholson, vice president of research for Energy Insights, an IDC company, the nature of BI recently changed dramatically. For many years, BI was a reporting solution and capability used primarily by a small number of business analysts. “Today, BI solutions have become more accessible, easier to use and more affordable, and they’re being deployed to managers, supervisors, line-of-business staff and external stakeholders,” says Nicholson. “We expect the use of business intelligence in the utility industry to continue to increase due to factors such as new report and compliance requirements, changes in trading markets, new customer programs such as energy efficiency and demand response, and intelligent grid initiatives.”

Accenture’s Todd believes that traditional BI focuses on analyzing the past, whereas real-time BI today can provide an immediate chance to affect the future. Says Todd, “Smart users of BI today take the growing volume of corporate operational data and the constant fl ow of raw information and turn it into usable and business-relevant insight – in near real time – and even seek to manage future events using analytics.” (See Figure 2.)

Most importantly, today’s BI gives utility information workers a way of understanding what’s going on in the business that’s both practical and actionable. Dr. J. Patrick Kennedy, the founder and CEO of performance management vendor OSIsoft, says that the transaction-level detail provided from enterprise software often offers a good long-term history, but it does not answer many of the important operations questions. Further, this type of software typically represents a “pull” rather than a “push” technology.

Says Kennedy, “People think in terms of context, trends, interactions, risk and reward – to answer these questions effectively requires actionable information to help them make the right decisions. Integrating systems enables these decisions by providing users with a dynamic BI application within a familiar platform.”

WHAT GOOD BI SYSTEMS LOOK LIKE

Here are some critical characteristics to look for in an enterprise-class BI solution:

  • The BI solution should integrate with the existing IT infrastructure and not require major infrastructure changes or replacement of legacy software applications.
  • The technology should mirror day-today business processes already in place (rather than expect users to adapt to it).
  • The application should be easy to use without extensive IT support.
  • The BI solution should connect seamlessly to multiple data sources rather than require workers to toggle in and out of a broad range of proprietary applications.
  • An effective BI solution will provide the ability to forecast, plan, budget and create scorecards and consolidated financial reports in a single, integrated product.
  • The BI solution should support navigation directly from each KPI to the underlying data supporting that KPI.
  • Analysis and reporting capabilities should be flexible and allow for everything from collecting complex data from unique sources to heavy-duty analytics and enterprise-wide production reporting.
  • The BI solution should support security by role, location and more. If access to certain data needs to be restricted, access management should be automated.

The true measure of BI success is that users actually use it. For this to happen, BI must be easy to learn and use. It should provide the right information in the right amount of detail to the right people. And it must present this information in easily customized scorecards, dashboards and wikis, and be available to anyone. If utilities can achieve this, they’ll be able to make better decisions much more quickly.

SEEING THE LIGHT

BI is about empowering people to make decisions based on relevant and current information so that they can focus on the right problems and pay attention to the right customers. By using BI to monitor performance and analyze both financial and operational data, organizations can perform real-time collaboration and make truly transformational decisions. Given the dynamic nature of the utilities industry, BI is a critical tool for making organizations more flexible and agile – and for enabling them to easily anticipate and manage change.