Future of Learning

The nuclear power industry is facing significant employee turnover, which may be exacerbated by the need to staff new nuclear units. To maintain a highly skilled workforce to safely operate U.S. nuclear plants, the industry must find ways to expedite training and qualification, enhance knowledge transfer to the next generation of workers, and develop leadership talent to achieve excellent organizational effectiveness.

Faced with these challenges, the Institute of Nuclear Power Operations (INPO), the organization charged with promoting safety and reliability across the 65 nuclear electric generation plants operating in the U.S., created a “Future of Learning” initiative. It identified ways the industry can maintain the same high standard of excellence and record of nuclear safety, while accelerating training development, individual competencies and plant training operations.

The nuclear power industry is facing the perfect storm. Like much of the industrialized world, it must address issues associated with an aging workforce since many of its skilled workers and nuclear engineering professionals are hitting retirement age, moving out of the industry and beginning other pursuits.

Second, as baby boomers transition out of the workforce, they will be replaced by an influx of Generation Y workers. Many workers in this “millenials” generation are not aware of the heritage driving the single-minded focus on safety. They are asking for new learning models, utilizing the technologies which are so much a part of their lives.

Third, even as this big crew change takes place, there is increasing demand for electricity. Many are turning to cleaner technologies – solar, wind, and nuclear – to close the gap. And there is resurgence in requests for building new nuclear plants, or adding new reactors at existing plants. This nuclear renaissance also requires training and preparation to take on the task of safely and reliably operating our nuclear power plants.

It is estimated there will be an influx of 25,000 new workers in the industry over the next five years, with an additional 7,000 new workers needed if just a third of the new plants are built. Given that incoming workers are more comfortable using technology for learning, and that delivery models that include a blend of classroom-based, instructor-led, and Web-based methods can be more effective and efficient, the industry is exploring new models and a new mix of training.

INPO was created by the nuclear industry in 1979 following the Three Mile Island accident. It has 350 full-time and loaned employees. As a nonprofit organization, it is chartered to promote the highest levels of safety and reliability – in essence, to promote excellence – in the operation of nuclear electric generating plants. All U.S. nuclear operating companies are members.

INPO’s responsibilities include evaluating member nuclear site operations, accrediting each site’s nuclear training programs and providing assistance and information exchange. It has established the National Academy for Nuclear Training, and an independent National Nuclear Accrediting Board. INPO sends teams to sites to evaluate their respective training activities, and each station is reviewed at least every four years by the accrediting board.

INPO has developed guidelines for 12 specifically accredited programs (six operations and six maintenance/technical), including accreditation objectives and criteria. It also offers courses and seminars on leadership, where more than 1,500 individuals participate annually, from supervisors to board members. Lastly, it operates NANTeL (National Academy for Nuclear Training e-Learning system) with 200 courses for general employee training for nuclear access. More than 80,000 nuclear workers and sub-contractors have completed training over the Web.

The Future of Learning

In 2008, to systematically address workforce and training challenges, the INPO Future of Learning team partnered with IBM Workforce and Learning Solutions to conduct more than 65 one-on-one interviews, with chief executive officers, chief nuclear officers, senior vice presidents, plant managers, plant training managers and other leaders in the extended industry community. The team also completed 46 interviews with plant staff during a series of visits to three nuclear power plants. Lastly, the team developed and distributed a survey that was sent to training managers at the 65 nuclear plants, achieving a 62 percent response rate.

These are statements the team heard:

  • “Need to standardize a lot of the training, deliver it remotely, preferably to a desktop, minimize the ‘You train in our classroom in our timeframe’ and have it delivered more autonomously so it’s likely more compatible with their lifestyles.”
  • “We’re extremely inefficient today in how we design/develop and administer training. We don’t want to carry inefficiencies that we have today into the future.”
  • “Right now, in all training programs, it’s a one-size-fits-all model that’s not customized to an individual’s background. Distance learning would enable this by allowing people to demonstrate knowledge and let some people move at a faster pace.”
  • “We need to have ‘real’ e-learning. We’ve been exposed to less than adequate, older models of e-learning. We need to move away from ‘page turners’ and onto quality content.”

Several recommendations were generated as a result of the study. The first focused on ways to improve INPO’s current training offerings by adding leadership development courses, ratcheting up the interactivity of the Web-based and e-learning offerings in NANTeL and developing a “nuclear citizenship” course for new workers in the industry.

Second, there were recommendations about better utilizing training resources across the industry by centralizing common training, beginning with instructor training and certification and generic fundamentals courses. It was estimated that 50 percent of the accredited training materials are common across the industry. To accomplish this objective, INPO is exploring an industry infrastructure that would enable centralized training material development, maintenance and delivery.

The last set of recommendations focused on methods for better coordination and efficiency of training, including developing processes for certifying vendor training programs, and providing a jump-start to common community college and university curriculum.

In 2009, INPO is piloting a series of Future of Learning initiatives which will help determine the feasibility, cost-effectiveness, readiness and acceptance of this first set of recommendations. It is starting to look more broadly at ways it can utilize learning technology to drive economies of scale, accelerative and prescriptive learning, and deliver value to the nuclear electric generation industry.

Where Do We Go From Here ?

Beyond the initial perfect storm is another set of factors driving the future of learning.

First, consider the need for speed. It has been said that “If you are not learning at the speed of change, you are falling behind.”

In his “25 Lessons from Jack Welch,” the former CEO of General Electric said, “The desire, and the ability, of an organization to continuously learn from any source, anywhere – and to rapidly convert this learning into action – is its ultimate competitive advantage.” Giving individuals, teams and organizations the tools and technologies to accelerate and broaden their learning is an important part of the future of learning.

Second, consider the information explosion – the sheer volume of information available, the convenience of information access (due, in large part, to continuing developments in technology) and the diversity of information available. When there is too much information to digest, a person is unable to locate and make use of the information that one needs. When one is unable to process the sheer volume of information, overload occurs. The future of learning should enable the learner to sort through information and find knowledge.

Third, consider new developments in technology. Generations X and Y are considered “digital natives.” They expect that the most current technologies are available to them – including social networking, blogging, wikis, immersive learning and gaming – and to not have them is unthinkable.

Impact of New Technology

Philosophy of training has morphed from “just-in-case” (teach them everything and hope they will remember when they need it), to “just-in-time” (provide access to training just before the point of need), to “just-for-me.” With respect to the latter, learning is presented in a preferred media, with a learning path customized to reflect the student’s preferred learning style, and personalized to address the current and desired level of expertise within any given time constraint.

Imagine a scenario in which a maintenance technician at a nuclear plant has to replace a specialized valve – something she either hasn’t done for awhile, or hasn’t replaced before. In a Web 2.0 world, she should be able to run a query on her iPhone or similar handheld device and pull up the maintenance of that particular valve, access the maintenance records, view a video of the approved replacement procedure, or access an expert who could coach her through the process.

Learning Devices

What needs to be in place to enable this vision of the future of learning? First, workers will need a device that can access the information by connecting over a secure wireless network inside the plant. Second, the learning has to be available in small chunks – learning nuggets or learning assets. Third, the learning needs to be assembled along the dimensions of learning style, desired and target level of expertise, time available and media type, among other factors. Finally, experts need to be identified, tagged to particular tasks and activities, and made accessible.

Fortunately, some of the same learning technology tools that will enable centralized maintenance and accelerated development will also facilitate personalized learning. When training is organized at a more granular level – the learning asset level – not only can it be leveraged over a variety of courses and courseware, it can also be re-assembled and ported to a variety of outputs such as lesson books, e-learning and m-learning (mobile-learning).

The example above pointed out another shift in our thinking about learning. Traditionally, our paradigm has been that learning occurs in a classroom, and when it occurs, it has taken the form of a course. In the example above, the learning takes place anywhere and anytime, moving from the formal classroom environment to an informal environment. Of course, just because learning is “informal” does not mean it is accidental, or that it occurs without preparation.

Some estimates claim 10 percent of our learning is achieved through formal channels, 20 percent from coaching, and 70 percent through informal means. Peter Henschel, former director of the Institute for Research on Learning, raised an important question: If nearly three-quarters of learning in corporations is informal, can we afford to leave it to chance?

There are still several open issues regarding informal learning:

  • How do we evaluate the impact/effectiveness of informal learning? (Informal learning, but formal demonstration of competency/proficiency);
  • How do we record one’s participation and skill-level progression in informal learning? (Information learning, but formal recording of learning completion);
  • Who will create and maintain informal learning assets? (Informal learning, but formal maintenance and quality assurance of the learning content); and
  • When does informal learning need a formal owner (in a full- or part-time role)? (Informal learning, but will need formal policies to help drive and manage).
    • In the nuclear industry, accurate and up-to-date documentation is a necessity. As the nuclear industry moves toward more effective use of informal channels of learning, it will need to address these issues.

      Immersive Learning (Or Virtual Worlds)

      The final frontier for the future of learning is expansion into virtual worlds, also known as immersive learning. Although Second Life (SL) is the best known virtual world, there are also emerging competitors, including Active Worlds, Forterra (OLIVE), Qwag and Unisfair.

      Created in 2003 by Linden Lab of San Francisco, SL is a three-dimensional, virtual world that allows users to buy “property,” create objects and buildings and interact with other users. Unlike a game with rules and goals, SL offers an open-ended platform where users can shape their own environment. In this world, avatars do many of the same things real people do: work, shop, go to school, socialize with friends and attend rock concerts.

      From a pragmatic perspective, working in an immersive learning environment such as a virtual world provides several benefits that make it an effective alternative to real life:

      • Movement in 3-D space. A virtual world could be useful in any learning situation involving movement, danger, tactics, or quick physical decisions, such as emergency response.
      • Engendering Empathy. Participants experience scenarios from another person’s perspective. For example, the Future of Learning team is exploring ways to re-create the control room experience during the Three-Mile Island incident, to provide a cathartic experience for the next generation workforce so they can better appreciate the importance of safety and human performance factors.
      • Rapid Prototyping and Co-Design. A virtual world is an inexpensive environment for quickly mocking up prototypes of tools or equipment.
      • Role Playing. By conducting role plays in realistic settings, instructors and learners can take on various avatars and play those characters.
      • Alternate Means of Online Interaction. Although users would likely not choose a virtual world as their primary online communication tool, it provides an alternative means of indicating presence and allowing interaction. Users can have conversations, share note cards, and give presentations. In some cases, SL might be ideal as a remote classroom or meeting place to engage across geographies and utility boundaries.

      Robert Amme, a physicist at the University of Denver, has another laboratory in SL. Funded by a grant from the Nuclear Regulatory Commission, his team is building a virtual nuclear reactor to help train the next generation of environmental engineers on how to deal with nuclear waste (see Figure 1). The INPO Future of Learning team is exploring ways to leverage this type of learning asset as part of the nuclear citizenship initiative.

      There is no doubt that nuclear power generation is once again on an upswing, but critical to its revival and longevity will be the manner in which we prepare the current and next generation of workers to become outstanding stewards of a safe, effective, clean-energy future.

Is Your Mobile Workforce Truly Optimized?

ClickSoftware is the leading provider of mobile workforce management and service optimization solutions that create business value for service operations through higher levels of productivity, customer satisfaction and cost effectiveness. Combining educational, implementation and support services with best practices and its industry leading solutions, ClickSoftware drives service decision making across all levels of the organization.

Our mobile workforce management solution helps utilities empower mobile workers with accurate, real-time information for optimum service and quick on-site decision making. From proactive customer demand forecasting and capacity planning to real-time decision making, incorporating scheduling, mobility and location- based services, ClickSoftware helps service organizations get the most out of their resources.

The IBM/ClickSoftware alliance provides the most comprehensive offering for Mobile Workforce and Asset Management powering the real-time service enterprise. Customers can benefit from maximized workforce productivity and customer satisfaction while controlling, and then minimizing, operational costs.

ClickSoftware provides a flexible, scalable and proven solution that has been deployed at many utility companies around the world. Highlights include the ability to:

  • Automatically update the schedule based on real-time information from the field;
  • Manage crews (parts and people);
  • Cover a wide variety of job types within one product: from short jobs requiring one person to multi-stage jobs requiring a multi-person team over several days or weeks;
  • Balance regulatory, environmental and union compliance;
  • Continuously strive to raise the bar in operational excellence;
  • Incorporate street-level routing into the decision making process; and
  • Plan for the catastrophic events and seasonal variability in field service operations.

The resulting value proposition to the customer is extremely compelling:

  • Typically, optimized scheduling and routing of the mobile workforce generates a 31 percent increase in jobs per day vs. the industry average. (Source: AFSMI survey, 2003)
  • A variety of solutions, ranging from entry level to advanced, that directly address the broad spectrum of pains experienced by service organizations around the world, including optimized scheduling, routing, mobile communications and integration of solutions components – within the service optimization solution itself and also into the CRM/ERP/ EAM back end.
  • An entry level offering with a staged upgrade path toward a fully automated service optimization solution ensures that risk is managed and the most challenging of customer requirements may be met. This “least risk” approach for the customer is delivered by a comprehensive set of IBM business consulting, installation and support services.
  • The industry-proven credibility of ClickSoftware’s ServiceOptimization Suite, combined with IBM’s wireless middleware, software, hardware and business consulting services provides the customer with the most effective platform for managing its field service operations.

ClickSoftware’s customers represent a cross-section of leaders in the utilities, telecommunications, computer and office equipment, home services and capital equipment industries. Over 100 customers around the world have deployed ClickSoftware workforce and service optimization solutions and services to achieve optimal levels of field service.

Be a People Person

I have to admit it. Despite all the exciting new technologies out there, I am finding myself to be a people person when it comes to building smarter grids and more intelligent utilities. Granted, technology is rapidly developing and the utility industry is finding itself in the middle of more and more automation. However, people – from linemen to consumers – will remain critical components for delivering information-enabled energy.

In the many conversations I have with utilities and other industry thought leaders, we often start out talking about smart technology, but eventually our chats settle on people. People can ultimately make or break even the most promising technologies – from personnel and consumers adopting and using the technology to executives driving technology investments. So, in a world buzzing with new technologies, it is important to reacquaint ourselves with people. This article traces some of my conversations about what an intelligent utility is, how people fit in – both on the consumer and utility personnel side – and what the utility industry can do to better involve people. As is my usual style, I will serve up these critical subjects with a side of humor and perspectives outside the utility industry. So be prepared to learn more about yoga, Nashville, crystal balls and the telecom industry, too.

What Is An Intelligent Utility ?

Before understanding the importance of people, let’s take a moment to understand where people fit into smart grids and intelligent utilities. Utilities are no longer exempt from change. From economic stimulus plans to carbon controls, to the impending electric vehicle flood, we must face the fact that the utility industry will undergo significant changes in the coming years, months and even minutes. Now, it is not so much a question of what changes will happen, but how – and how well – will the utility industry adapt to these changes?

A frequent answer to this question has been a “smart grid,” but most smart grid discussions inevitably lead to these questions:

  • How do we get to a smart grid?
  • When do we know when we are there?
  • What is a smart grid anyway?

These are not easy questions. Many groups define the smart grid, but how can you tell when a utility has one? Better understanding this challenge requires an unusual, but useful comparison: Nashville and Nirodha – a state of mind in yoga. Let’s say you are traveling to Nashville. You would see landmarks that you could only find in Nashville, such as the Grand Ole Opry, B.B. King’s Blues Club and the Bell- South Tower. Smart grid landmarks, however, are harder to come by. Utilities can install smart meters and other smart sensors on their grid, but having these technologies does not necessarily mean they have arrived at a smart grid. To add to the confusion, other smart grid components, such as demand response, distribution automation and more advanced metering, have already been around for years.

Although such technologies can support a smarter grid, the smart grid is more than just acquiring certain technology landmarks. So, although it is a nice place, you shouldn’t just think Nashville when you think smart grid. Think Nirodha. For those of you who aren’t yoga enthusiasts, Nirodha is a state of mind in yoga in which you become more focused and aware of an object. In the case of a utility, the object is primarily the transmission and distribution network. As a utility becomes more aware and ultimately more knowledgeable about its network, it can make better decisions about its operation.

Furthermore, as a company builds more knowledge about its grid, it develops not only a smarter grid, but also a more intelligent utility. An intelligent utility overlays information on energy that goes beyond the transmission and distribution network all the way from generation to end users, maximizing its reliability, affordability and sustainability. Essentially, utilities are delivering information-enabled energy. And technology is just one piece for delivering this sort of energy. Here is a quick run-down of the key components in an intelligent utility:

  • Process & technology: Utility objectives and their impact on business process change and smart technology deployment;
  • Economic models: The challenges and opportunities of new paradigms. So this is not just the changes involved with upgrading a technology – like a customer information or geographic information system – but the changes from initiatives like electrifying transportation and microgrids that could radically alter utility companies and the roles of generators and consumers;
  • Finance: Investment trends associated with smart technologies;
  • Public policy: The impact of politics on energy – including efforts by regulators and legislators. These groups ultimately set up the framework that determines whether and how intelligent initiatives move forward; and
  • People: The knowledge, skills and abilities required for both the workforce and consumers in an information-enabled environment.

Involving Workforce

The rest of this article will take a little bit closer look at the last component – people. As we move toward information-enabled energy, the utility workforce will undergo some significant changes – from new job titles, to new knowledge, skills and abilities (KSAs), to new people joining utility companies from other industries.

Ryan Cook, vice president of the employment services division at Energy Central, has pointed out that “In today’s utilities, employee KSAs are based primarily on providing electrical power as a product. These KSAs support the rules-based, process-oriented, functionally structured, and cost-focused business needs of today’s utility. In the future, however, there will be a massive paradigm shift from providing just a product to providing customers with customizable services and solutions for their unique energy needs. The result will be a shift toward KSAs that support a more agile, innovative, collaborative, cross-functional, service-oriented utility of the future. Employees will need to deal with constantly evolving technology.”

So, digitizing the grid will change personnel needs. We know that much, but the big unknown is how exactly will those needs change? And where is a good crystal ball when you need one? Since my snow globe wasn’t working, I thought about other industries that have gone through a digital revolution, which brought me to the telecom and cable industry. I learned much from Alan Babcock, president of Broadband Training Associates. As this industry digitized its grid over the last 13 years and began to focus more on services as opposed to products, it saw significant workforce changes – touching everyone from field crews, to executives, to marketing folks – that could happen to the utility industry as well.

Out In the Field

Before digitizing the telecom and cable industry, many field crews were still pencil and paper, and some still are today. But digitization changes weren’t just about figuring out how to use a truck-mounted laptop. The workforce has a whole new job to do today. In particular, they now have to troubleshoot new problems on multiple services in the network and become experts at devices on an end user’s premise.

Before digitization, field crews dealt with one service – like video in the cable industry – but now they have to balance multiple services in the same network, including voice, data and video. The decisions you make for one service will ultimately impact the others. So, with multiple services, it changes how you do regular maintenance, how you troubleshoot networks, and how you take the network down to make repairs. On top of that, technicians may not be able to take down certain parts of the network because of service level agreements with customers.

Besides dealing with multiple services, field crews have to better understand the devices that extend into customer premises – including modems for Internet or set-top boxes for cable. It can be embarrassing for a telecom or cable company when the consumer knows more about consumer devices than the technician.

Back In the Office

Digitizing the network not only changed KSAs for field crews, but has changed things in the back office of telecom and cable companies as well. These changes occurred in the areas of marketing, customer service, planning and IT.

  • Marketing to customers: Digitization provides cable and telecom companies with increased visibility into the customer premises. This is not only helpful with determining whether customers have service, but also understanding their entertainment preferences. These companies now better understand what entertainment you watch and when you watch it. Ultimately, they have a lot of information at their disposal to be able to better market to you. Telecom companies, however, weren’t traditionally in the entertainment industry, so better marketing to consumers required a new group of employees from outside telecom.
  • Customer service: Customer service has changed in many ways with the digitization of the telecom and cable industry. With a smarter grid, the utility industry often focuses on benefits that it will bring to the customer representatives in terms of access to more information, but there are other benefits to consider as well. An interesting twist in the telecom and cable industry is that as the network gets more complex, a customer service agent’s job gets somewhat simpler. Essentially, customer service representatives have to recall fewer technical details about the network than they did before. It is not as important that they understand how the networks function because they have better visibility into the premise and have more intelligent systems to walk them through trouble-shooting problems.
  • Capital and strategic planning: Digitization has changed the planning time horizon and knowledge requirements for telecom and cable executives. They must factor in the dizzying technology advancements in the industry; think about the rapid movement from 2G to 3G to 4G networks and beyond. The five-year plan now has to be the three-year plan. From a planning standpoint, they also need to better understand the networks in order to figure out how to best utilize and benefit from services that are enabled by those networks.
  • Designing and maintaining IT systems: Aside from learning how to design and maintain new technologies and systems, the technology personnel in telecom and the cable industry have learned some important lessons as they digitize the networks. The first is to more carefully consider the usefulness of new technologies. If a new technology comes along, it doesn’t mean that it has to be used. If a new technology does make sense to use, technology personnel need to consider the human aspects involved with making that change, including change management and making sure the technology is ready when people actually begin using it.

Involving Customers

Not only will the intelligent utility impact its own personnel, but it will impact consumers as well. In particular, utilities will have to help consumers to understand the value of changes and get them to participate in intelligent initiatives.

As I am sure many of you have realized from conversations with friends and family, many people do not understand smart grid benefits or even how the grid really works. Although more people are starting to realize the value, a key challenge is how to get consumers to grasp these concepts and support a smarter grid and more intelligent utility. Utilities have to figure out how to make these things real for people – and are finding many ways to do that. As one utility executive pointed out, “A technology center served to convince our community stakeholders and our PUC that this appears to be a worthwhile journey. The awareness to the consumer was a tremendous value. They were able to start thinking of the value of what we’re trying to build rather than what we’re trying to build.”

Many intelligent initiatives, from demand response to real-time pricing, focus on the end user and require some level of consumer effort. Consumer participation is key for success, but utilities are finding it challenging to get participation. Solutions range from more automation in controlling household appliances and HVAC systems to competition between neighbors regarding energy consumption, but there is still much work to be done in this area, depending on consumer demographics.

Be A People Person

It is easy to get caught up in the technology hype, but as the examples above demonstrate, it is important to keep people in the equation when looking at smart initiatives. People play a key role in determining their success or failure. By preparing for the people factor and considering them in smart initiatives, utilities can better ensure the adoption and success of new technologies and processes.

Is Your Mobile Workforce Truly Optimized?

ClickSoftware is the leading provider of mobile workforce management and service optimization solutions that create business value for service operations through higher levels of productivity, customer satisfaction and cost effectiveness. Combining educational, implementation and support services with best practices and its industry leading solutions, ClickSoftware drives service decision making across all levels of the organization.

Our mobile workforce management solution helps utilities empower mobile workers with accurate, real-time information for optimum service and quick on-site decision making. From proactive customer demand forecasting and capacity planning to real-time decision-making, incorporating scheduling, mobility and location-based services, ClickSoftware helps service organizations get the most out of their resources.

The IBM-ClickSoftware alliance provides the most comprehensive offering for Mobile Workforce and Asset Management powering the real-time service enterprise. Customers can benefit from maximized workforce productivity and customer satisfaction while controlling, and then minimizing, operational costs.

ClickSoftware provides a flexible, scalable and proven solution that has been deployed at many utility companies around the world. Highlights include the ability to:

  • Automatically update the schedule based on real-time information from the field;
  • Manage crews (parts and people);
  • Cover a wide variety of job types within one product – from short jobs requiring one person to multistage jobs needing a multi-person team over several days or weeks;
  • Balance regulatory, environmental and union compliance;
  • Continuously strive to raise the bar in operational excellence;
  • Incorporate street-level routing into the decision-making process; and
  • Plan for the catastrophic events and seasonal variability in field service operations.

The resulting value proposition to the customer is extremely compelling:

  • Typically, optimized scheduling and routing of the mobile workforce generates a 31 percent increase in jobs per day versus the industry average (Source: AFSMI survey 2003).
  • A variety of solutions, ranging from entry level to advanced, directly address the broad spectrum of pains experienced by service organizations around the world, including optimized scheduling, routing, mobile communications and integration of solutions components – within the service optimization solution itself and also into the CRM/ERP/EAM back end.
  • An entry level offering with a staged upgrade path toward a fully automated service optimization solution ensures that risk is managed and the most challenging of customer requirements may be met. This "least risk" approach for the customer is delivered by a comprehensive set of IBM business consulting, installation and support services.
  • The industry-proven credibility of ClickSoftware’s ServiceOptimization Suite, combined with IBM’s wireless middleware, software, hardware and business consulting services, provides the customer with the most effective platform for managing field service operations.

ClickSoftware’s customers represent a cross section of leaders in the utilities, telecommunications, computer and office equipment, home services, and capital equipment industries. Close to 100 customers around the world have employed ClickSoftware service optimization solutions and services to achieve optimal levels of field service.

To find out more visit www.clicksoftware.com or call 888.438.3308.

Making Change Work: Why Utilities Need Change Management

Many times organizations are reluctant to engage change management programs, plans and teams. More often, change management programs are launched too late in the project process, are only moderately funded or are absorbed within the team as part-time responsibilities – all of which we’ve seen happen time and again in the utility industry.

“Making Change Work,” an IBM study done in collaboration with the Center of Evaluation and Methods at Bonn University, analyzed the factors for successful implementation of change. The scope of this study, released in 2007, is now being expanded because the project management and change management professions, formerly aligned, are now at a turning point of differentiation. The reason is simple: too many projects fail to consider both components as critical to success – and therefore lack insight into the day-today impact of a change on members of the organization.

Despite this, many organizations have been reluctant to implement change management programs, plans and teams. And when they have put such programs in place, the programs tend to be launched too late in the project process, are inadequately funded or are perceived as part-time tasks that can be assigned to members of the project management team.

WHAT IS CHANGE MANAGEMENT?

Change management is a structured approach to business transformation that manages the transition from a current state to a desired future state. Far from being static or rigid, change management is an ever-evolving program that varies with the needs of the organization. Effective change management involves people and provides open communication.

Change management is as important as project management. However, whereas project management is a tactical activity, change management represents a strategic initiative. To understand the difference, consider the following

  • Change management is the process of driving corporate strategy by identifying, addressing and managing barriers to change across the organization or enterprise.
  • Project management is the process of implementing the tools needed to enable or mobilize the corporate strategy.

Change management is an ongoing process that works in close concert with project management. At any given time at least one phase of change management should be occurring. More likely, multiple phases will be taking place across various initiatives.

A change management program can be tailored to manage the needs of the organizational culture and relationships. The program must close the gaps among workforce, project team and sponsor leadership during all phases of all projects. It does this by:

  • Ensuring proper alignment of the organization with new technology and process requirements;
  • Preparing people for new processes and technology through training and communication;
  • Identifying and addressing human resource implications such as job definitions, union negotiations and performance measures;
  • Managing the reaction of both individuals and the entire organization to change; and
  • Providing the right level of support for ongoing implementation success.

The three fundamental activities of a change management program are leading, communicating and engaging. These three activities should span the project life cycle to maintain both awareness of the change and its momentum (Figure 1).

KEY ELEMENTS OF A CHANGE PROGRAM

There are three best practice elements that make the difference between successful projects and less successful projects: [1]

Organizational awareness for the challenges inherent in any change. This involves the following:

  • Getting a real understanding of – and leadership buy-in to – the stakeholders and culture;
  • Recognizing the interdependence of strategy and execution;
  • Ensuring an integrated strategy approach linking business strategy, operations, organization design and change and technology strategy; and
  • Educating leadership on change requirements and commitment.

Consistent use of formal methods for change management. This should include:

  • Covering the complete life cycle – from definition to deployment to post-implementation optimization;
  • Allowing for easy customization and flexibility through a modular design;
  • Incorporating change management and value realization components into each phase to increase the likelihood of success; and
  • Providing a published plan with ongoing accountability and sponsorship as well as continuous improvement.

A specified share of the project budget that is invested in change management. This should involve:

  • Investing in change linked to project success. Projects that invest more than 10 percent of the project budget have an average of 45 percent success (Figure 2). [2]
  • Assigning the right resources to support change management early on and maintaining the required support. This also limits the adverse impacts of change on an organization’s productivity (Figure 3). [3]

WHY DO UTILITIES NEED CHANGE MANAGEMENT?

Utilities today face a unique set of challenges. For starters, they’re simultaneously dealing with aging infrastructures and aging workforces. In addition, there are market pressures to improve performance, become more “green” and mitigate rising energy costs. To address these realities, many utilities are seeking mergers and acquisition (M&A) opportunities as well as implementing new technologies.

The cost cutting of the past decade combined with M&As has left utilities with gaps in workforce experience as well as budget challenges. Yet utilities are facing major business disruptions going into the next decade and beyond. To cope with these disruptions, companies are implementing new technologies such as the intelligent grid, advanced metering infrastructure (AMI), meter data management (MDM), enterprise asset management (EAM) and work management systems (WMS’s). It’s not uncommon for utilities to be implementing multiple new systems simultaneously that affect the day-to-day activities of people throughout the organization, from frontline workers to senior managers.

A change management program can address a number of challenges specific to the utilities industry.

CULTURAL CLIMATE: ‘BUT WE’RE DIFFERENT’

A utility is a utility is a utility. But a deeper look into individual businesses reveals nuances in their relationships with both internal and external stakeholders that are unique to each company. A change management team must intimately understand these relationships. For example, externally how is the utility perceived by regulators, customers, the community and even analysts? As for internal relationships, how do various operating divisions relate and work together? Some operating divisions work well together on project teams and respect each other and their differences; others do not.

There may be cultural differences, but work is work. Only change management can address these relationships. Knowing the utility’s cultural climate and relationships will help shape each phase of the change management program, and allow change management professionals to customize a project or system implementation to fit a company’s culture.

REGULATORY LANDSCAPE

With M&As and increasing market pressures across the United States, the regulatory landscape confronting utilities is becoming more variable. We’ve seen several types of regulatory-related challenges.

Regulatory pressure. Whether regulators mandate or simply encourage new technology implementations can make a significant difference in how stakeholders in a project behave. In general, there’s more resistance to a new technology when it’s required versus voluntarily implemented. Change management can help work through participant behaviors and mitigate obstacles so that project work can continue as planned.

Multiple regulatory jurisdictions. Many utilities with recently expanded footprints following M&As now have to manage requests from and expectations of multiple regulatory commissions. Often these commissions have different mandates. Change management initiatives are needed to work through the complexity of expectations, manage multiple regulatory relationships and drive utilities toward a unified corporate strategy.

Regulatory evolution. Just as markets evolve, so do regulatory influences and mandates. Often regulators will issue orders that can be interpreted in many ways. They may even do this to get information in the form of reactions from their various constituents. Whatever the reason, the reality is that utilities are managing an ever-changing portfolio of regulations. Change management can better prepare utilities for this constant change.

OPERATIONS MATURITY

When new systems and technologies being implemented encompass multiple operating divisions, it can be difficult for stakeholders to agree on operating standards or processes. Project team members representing the various operating regions can resist compromise for fear of losing control. This often occurs when utilities are attempting to integrate systems across operating regions following an acquisition.

Change management helps ensure that various constituents – for example, the regional operating divisions – are prepared for eminent business transformation. In large organizations, this preparation period can take a year or more. But for organizations to realize the benefits of new systems and technology implementations, they must be ready to receive the benefits. Readiness and preparedness are largely the responsibilities of the change management team.

ORGANIZATIONAL COHESIVENESS

The notion of organizational cohesiveness is that across the organization all constituents are equally committed to the business transformation initiative and have the same understanding of the overarching corporate strategy while also performing their individual roles and responsibilities.

Senior executives must align their visions and common commitment to change. After all, they set the tone for change through their respective organizations. If they are not in sync with each other, their organizations become silos, and business processes are less likely to be fluid across organizational boundaries. Frontline managers and associates must, in turn, be engaged and enthusiastic about the transformations to come.

Organizational cohesiveness is especially critical during large systems implementations involving utility field operations. Leaders at multiple locations must be ready to communicate and support change – and this support must be visible to the workforce. Utilities must understand this requirement at the beginning of a project to make change manageable, realistic and personal enough to sustain momentum. All too often, we’ve heard team members comment, “We had a lot of leadership at the project kickoff, but we really haven’t seen leadership at any of our activities or work locations since then. The project team tells us what to do.”

Moreover, leadership – when removed from the project – usually will not admit that they’re in the dark about what’s going on. Yet their lack of involvement will not escape the attention of frontline employees. Once the supervisor is perceived as lacking information – and therefore power – it’s all over. Improving customer service and quality, cutting costs and adopting new technology-merging operations all require changing employees. [4]

For utilities, the concept of organizational cohesiveness is especially important because just as much technology “lives” outside IT as inside. Yet the engineers who use this non-IT-controlled technology – what Gartner calls “operations technology” – are usually disconnected from the IT world in terms of both practical planning and execution. However, these worlds must act as one for a company to be truly agile. [5]

Change management methods and tools ensure that organization cohesiveness exists through project implementation and beyond.

UNION ENGAGEMENT

Successful change occurs with a sustained partnership among union representatives throughout the project life cycle. Project leadership and union leadership must work together and partner to implement change. Union representation should be on the project team. Representatives can be involved in process reviews, testing and training, or asked to serve as change champions. In addition, communication is critical throughout all phases of a project. Frontline employees must see real evidence of how this change will benefit them. Change is personal: everyone wants to know how his or her job will be impacted.

There should also be union representation in training activities, since workers tend to be more receptive to peer-to-peer support. Utilities should, for example, engage union change champions to help co-workers during training and to be site “go to” representatives. Utilities should also provide advance training and recognize all who participate in it.

Union representatives should also participate in design and/or testing, since they will be able to pinpoint issues that will impact routine daily tasks. It could be something as simple as changing screen labels per their recommendation to increase user understanding.

More than one union workforce may be involved in a project. Location cultures that exist in large service territories or that have resulted from mergers may try to isolate themselves from the project team and resist change. Utilities should assemble a team from various work groups and then do the following to address the history and differences in the workforce:

  • Request ongoing union participation throughout the life of the project.
  • Include union roles as part of the project charter and define these roles with union leadership.
  • Provide a kickoff overview to union leadership.
  • Include union representation in work process development with balanced representation from various areas. Union employees know the job and can quickly identify the pros and cons of work tasks. A structured facilitation process and issue resolution process is required.
  • Assign a corporate human resource or labor relations role to review processes that impact the union workforce.
  • Develop communication campaigns that address union concerns, such as conducting face-to-face presentations at employing locations and educating union leaders prior to each change rollout.
  • Involve union representatives in training and user support.

Change management is necessary to sort through the relationships of multiple union workforces so that projects and systems can be implemented.

AN AGING WORKFORCE

A successful change management program will help mitigate the aging workforce challenges utilities will be facing for many years to come.

WHAT TO EXPECT FROM A SUCCESSFUL CHANGE MANAGEMENT PROGRAM

The result of a successful change management program is a flexible organization that’s responsive to customer needs, regulatory mandates and market pressures, and readily embraces new technologies and systems. A change-ready organization anticipates, expects and is increasingly comfortable with change and exhibits the following characteristics:

  • The organization is aligned.
  • The leaders are committed.
  • Business processes are developed and defined across all operational units.
  • Associates at all levels have received communications and have continued access to resources.

Facing major business transformations and unique industry challenges, utilities cannot afford not to engage change management programs. This skill set is just as critical as any other role in your organization. Change is a cost. Change should be part of the project budget.

Change is an ongoing, long-term investment. Good change management designed specifically for your culture and challenges minimizes change’s adverse effect on daily productivity and helps you reach and sustain project goals.

ENDNOTES

  1. “Making Change Work” (an IBM study), Center of Evaluation and Methods, Bonn University, 2007; excerpts from “IBM Integrated Strategy and Change Methodology,” 2007.
  2. “Making Change Work,” Center of Evaluation and Methods, Bonn University, 2007.
  3. Ibid.
  4. T.J. Larkin and Sandar Larkin, “Communicating Change: Winning Employee Support for New Business Goals,” McGraw Hill, 1994, p. 31.
  5. K. Steenstrup, B. Williams, Z. Sumic, C. Moore; “Gartner’s Energy and Utilities Summit: Agility on Both Sides of the Divide”; Gartner Industry Research ID Number G00145388; Jan. 30, 2007; p. 2.
  6. P. R. Bruffy and J. Juliano, “Addressing the Aging Utility Workforce Challenge: ACT NOW,” Montgomery Research 2006 journal.

Weathering the Perfect Storm

A “perfect storm” of daunting proportions is bearing down on utility companies: assets are aging; the workforce is aging; and legacy information technology (IT) systems are becoming an impediment to efficiency improvements. This article suggests a three-pronged strategy to meet the challenges posed by this triple threat. By implementing best practices in the areas of business process management (BPM), system consolidation and IT service management (ITSM), utilities can operate more efficiently and profitably while addressing their aging infrastructure and staff.

BUSINESS PROCESS MANAGEMENT

In a recent speech before the Utilities Technology Conference, the CIO of one of North America’s largest integrated gas and electric utilities commented that “information technology is a key to future growth and will provide us with a sustainable competitive advantage.” The quest by utilities to improve shareholder and customer satisfaction has led many CIOs to reach this same conclusion: nearly all of their efforts to reduce the costs of managing assets depend on information management.

Echoing this observation, a survey of utility CIOs showed that the top business issue in the industry was the need to improve business process management (BPM).[1] It’s easy to see why.

BPM enables utilities to capture, propagate and evolve asset management best practices while maintaining alignment between work processes and business goals. For most companies, the standardized business processes associated with BPM drive work and asset management activities and bring a host of competitive advantages, including improvements in risk management, revenue generation and customer satisfaction. Standardized business processes also allow management to more successfully implement business transformation in an environment that may include workers acquired in a merger, workers nearing retirement and new workers of any age.

BPM also helps enforce a desirable culture change by creating an adaptive enterprise where agility, flexibility and top-to-bottom alignment of work processes with business goals drive the utility’s operations. These work processes need to be flexible so management can quickly respond to the next bump in the competitive landscape. Using standard work processes drives desired behavior across the organization while promoting the capture of asset-related knowledge held by many long-term employees.

Utility executives also depend on technology-based BPM to improve processes for managing assets. This allows them to reduce staffing levels without affecting worker safety, system reliability or customer satisfaction. These processes, when standardized and enforced, result in common work practices throughout the organization, regardless of region or business unit. BPM can thus yield an integrated set of applications that can be deployed in a pragmatic manner to improve work processes, meet regulatory requirements and reduce total cost of ownership (TCO) of assets.

BPM Capabilities

Although the terms business process management and work flow are often used synonymously – and are indeed related – they refer to distinctly different things. BPM is a strategic activity undertaken by an organization looking to standardize and optimize business processes, whereas work flow refers to IT solutions that automate processes – for example, solutions that support the execution phase of BPM.

There are a number of core BPM capabilities that, although individually important, are even more powerful than the sum of their parts when leveraged together. Combined, they provide a powerful solution to standardize, execute, enforce, test and continuously improve asset management business processes. These capabilities include:

  • Support for local process variations within a common process model;
  • Visual design tools;
  • Revision management of process definitions;
  • Web services interaction with other solutions;
  • XML-based process and escalation definitions;
  • Event-driven user interface interactions;
  • Component-based definition of processes and subprocesses; and
  • Single engine supporting push-based (work flow) and polling-based (escalation) processes.

Since BPM supports knowledge capture from experienced employees, what is the relationship between BPM and knowledge management? Research has shown that the best way to capture knowledge that resides in workers’ heads into some type of system is to transfer the knowledge to systems they already use. Work and asset management systems hold job plans, operational steps, procedures, images, drawings and other documents. These systems are also the best place to put information required to perform a task that an experienced worker “just knows” how to do.

By creating appropriate work flows in support of BPM, workers can be guided through a “debriefing” stage, where they can review existing job plans and procedures, and look for tasks not sufficiently defined to be performed without the tacit knowledge learned through experience. Then, the procedure can be flagged for additional input by a knowledgeable craftsperson. This same approach can even help ensure the success of the “debriefing” application itself, since BPM tools by definition allow guidance to be built in by creating online help or by enhancing screen text to explain the next step.

SYSTEM CONSOLIDATION

System consolidation needs to involve more than simply combining applications. For utilities, system consolidation efforts ought to focus on making systems agile enough to support near real-time visibility into critical asset data. This agility will yield transparency across lines of business on the one hand, and satisfies regulators and customers on the other. To achieve this level of transparency, utilities have an imperative to enforce a modern enterprise architecture that supports service-oriented architectures (SOAs) and also BPM.

Done right, system consolidation allows utilities to create a framework supporting three key business areas:

  • Optimization of both human and physical assets;
  • Standardization of processes, data and accountability; and
  • Flexibility to change and adapt to what’s next.

The Need for Consolidation

Many utility transmission and distribution (T&D) divisions exhibit this need for consolidation. Over time, the business operations of many of these divisions have introduced different systems to support a perceived immediate need – without considering similar systems that may already be implemented within the utility. Eventually, the business finds it owns three different “stacks” of systems managing assets, work assignments and mobile workers – one for short-cycle service work, one for construction and still another for maintenance and inspection work.

With these systems in place, it’s nearly impossible to implement productivity programs – such as cross-training field crews in both construction and service work – or to take advantage of a “common work queue” that would allow workers to fill open time slots without returning to their regional service center. In addition, owning and operating these “siloed” systems adds significant IT costs, as each one has annual maintenance fees, integration costs, yearly application upgrades and retraining requirements.

In such cases, using one system for all work and asset management would eliminate multiple applications and deliver bottom-line operational benefits: more productive workers, more reliable assets and technology cost savings. One large Midwestern utility adopting the system consolidation approach was able to standardize on six core applications: work and asset management, financials, document management, geographic information systems (GIS), scheduling and mobile workforce management. The asset management system alone was able to consolidate more than 60 legacy applications. In addition to the obvious cost savings, these consolidated asset management systems are better able to address operational risk, worker health and safety and regulatory compliance – both operational and financial – making utilities more competitive.

A related benefit of system consolidation concerns the elimination of rogue “pop-up” applications. These are niche applications, often spreadsheets or standalone databases, which “pop up” throughout an organization on engineers’ desktops. Many of these applications perform critical rolls in regulatory compliance yet are unlikely to pass muster at any Sarbanes-Oxley review. Typically, these pop-up applications are built to fill a “functionality gap” in existing legacy systems. Using an asset management system with a standards-based platform allows utilities to roll these pop-up applications directly into their standard supported work and asset management system.

Employees must interact with many systems in a typical day. How productive is the maintenance electrician who uses one system for work management, one for ordering parts and yet another for reporting his or her time at the end of a shift? Think of the time wasted navigating three distinct systems with different user interfaces, and the duplication of data that unavoidably occurs. How much more efficient would it be if the electrician were able to use one system that supported all of his or her work requirements? A logical grouping of systems clearly enables all workers to leverage information technology to be more efficient and effective.

Today, using modern, standards-based technologies like SOAs, utilities can eliminate the counterproductive mix of disparate commercial and “home-grown” systems. Automated processes can be delivered as Web services, allowing asset and service management to be included in the enterprise application portfolio, joining the ranks of human resource (HR), finance and other business-critical applications.

But although system consolidation in general is a good thing, there is a “tipping point” where consolidating simply for the sake of consolidation no longer provides a meaningful return and can actually erode savings and productivity gains. A system consolidation strategy should center on core competencies. For example, accountants or doctors are both skilled service professionals. But their similarity on that high level doesn’t mean you would trade one for the other just to “consolidate” the bills you receive and the checks you have to write. You don’t want accountants reading your X-rays. The same is true for your systems’ needs. Your organization’s accounting or human resource software does not possess the unique capabilities to help you manage your mission-critical transmission and distribution, facilities, vehicle fleet or IT assets. Hence it is unwise to consolidate these mission-critical systems.

System consolidation strategically aligned with business requirements offers huge opportunities for improving productivity and eliminating IT costs. It also improves an organization’s agility and reverses the historical drift toward stovepipe or niche systems by providing appropriate systems for critical roles and stakeholders within the organization.

IT SERVICE MANAGEMENT

IT Service Management (ITSM) is critical to helping utilities deal with aging assets, infrastructure and employees primarily because ITSM enables companies to surf the accelerating trend of asset management convergence instead of falling behind more nimble competitors. Used in combination with pragmatic BPM and system consolidation strategies, ITSM can help utilities exploit the opportunities that this trend presents.

Three key factors are driving the convergence of management processes across IT assets (PCs, servers and the like) and operational assets (the systems and equipment through which utilities deliver service). The first concerns corporate governance, whereby corporate-wide standards and policies are forcing operational units to rethink their use of “siloed” technologies and are paving the way for new, more integrated investments. Second, utilities are realizing that to deal with their aging assets, workforce and systems dilemmas, they must increase their investments in advanced information and engineering technologies. Finally, the functional boundaries between the IT and operational assets themselves are blurring beyond recognition as more and more equipment utilizes on-board computational systems and is linked over the network via IP addresses.

Utilities need to understand this growing interdependency among assets, including the way individual assets affect service to the business and the requirement to provide visibility into asset status in order to properly address questions relating to risk management and compliance.

Corporate Governance Fuels a Cultural Shift

The convergence of IT and operational technology is changing the relationship between the formerly separate operational and IT groups. The operational units are increasingly relying on IT to help deal with their “aging trilogy” problem, as well as to meet escalating regulatory compliance demands and customers’ reliability expectations. In the past, operating units purchased advanced technology (such as advanced metering or substation automation systems) on an as-needed basis, unfettered by corporate IT policies and standards. In the process, they created multiple silos of nonstandard, non-integrated systems. But now, as their dependence on IT grows, corporate governance policies are forcing operating units to work within IT’s framework. Utilities can’t afford the liability and maintenance costs of nonstandard, disparate systems scattered across their operational and IT efforts. This growing dependence on IT has thus created a new cultural challenge.

A study by Gartner of the interactions among IT and operational technology highlights this challenge. It found that “to improve agility and achieve the next level of efficiencies, utilities must embrace technologies that will enable enterprise application access to real-time information for dynamic optimization of business processes. On the other hand, lines of business (LOBs) will increasingly rely on IT organizations because IT is pervasively embedded in operational and energy technologies, and because standard IT platforms, application architectures and communication protocols are getting wider acceptance by OT [operational technology] vendors.”[2]

In fact, an InformationWeek article (“Changes at C-Level,” August 1, 2006) warned that this cultural shift could result in operational conflict if not dealt with. In that article, Nathan Bennett and Stephen Miles wrote, “Companies that look to the IT department to bring a competitive edge and drive revenue growth may find themselves facing an unexpected roadblock: their CIO and COO are butting heads.” As IT assumes more responsibility for running a utility’s operations, the roles of CIO and COO will increasingly converge.

What Is an IT Asset, Anyhow?

An important reason for this shift is the changing nature of the assets themselves, as mentioned previously. Consider the question “What is an IT asset?” In the past, most people would say that this referred to things like PCs, servers, networks and software. But what about a smart meter? It has firmware that needs updates; it resides on a wired or wireless network; and it has an IP address. In an intelligent utility network (IUN), this is true of substation automation equipment and other field-located equipment. The same is true for plant-based monitoring and control equipment. So today, if a smart device fails, do you send a mechanic or an IT technician?

This question underscores why IT asset and service management will play an increasingly important role in a utility’s operations. Utilities will certainly be using more complex technology to operate and maintain assets in the future. Electronic monitoring of asset health and performance based on conditions such as meter or sensor readings and state changes can dramatically improve asset reliability. Remote monitoring agents – from third-party condition monitoring vendors or original equipment manufacturers (OEMs) of highly specialized assets – can help analyze the increasingly complex assets being installed today as well as optimize preventive maintenance and resource planning.

Moreover, utilities will increasingly rely on advanced technology to help them overcome the challenges of their aging assets, workers and systems. For example, as noted above, advanced information technology will be needed to capture the tacit knowledge of experienced workers as well as replace some manual functions with automated systems. Inevitably, operational units will become technology-driven organizations, heavily dependent on the automated systems and processes associated with IT asset and service management.

The good news for utilities is that a playbook of sorts is available that can help them chart the ITSM waters in the future. The de facto global standard for best practices process guidance in ITSM is the IT Infrastructure Library (ITIL), which IT organizations can adopt to support their utility’s business goals. ITIL-based processes can help utilities better manage IT changes, assets, staff and service levels. ITIL extends beyond simple management of asset and service desk activities, creating a more proactive organization that can reduce asset failures, improve customer satisfaction and cut costs. Key components of ITIL best practices include configuration, problem, incident, change and service-level management activities.

Implemented together, ITSM best practices as embodied in ITIL can help utilities:

  • Better align asset health and performance with the needs of the business;
  • Improve risk and compliance management;
  • Improve operational excellence;
  • Reduce the cost of infrastructure support services;
  • Capture tactical knowledge from an aging workforce;
  • Utilize business process management concepts; and
  • More effectively leverage their intelligent assets.

CONCLUSION

The “perfect storm” brought about by aging assets, an aging workforce and legacy IT systems is challenging utilities in ways many have never experienced. The current, fragmented approach to managing assets and services has been a “good enough” solution for most utilities until now. But good enough isn’t good enough anymore, since this fragmentation often has led to siloed systems and organizational “blind spots” that compromise business operations and could lead to regulatory compliance risks.

The convergence of IT and operational technology (with its attendant convergence of asset management processes) represents a challenging cultural change; however, it’s a change that can ultimately confer benefits for utilities. These benefits include not only improvements to the bottom line but also improvements in the agility of the operation and its ability to control risks and meet compliance requirements associated with asset and service management activity.

To help weather the coming perfect storm, utilities can implement best practices in three key areas:

  • BP technology can help utilities capture and propagate asset management best practices to mitigate the looming “brain drain” and improve operational processes.
  • Judicious system consolidation can improve operational efficiency and eliminate legacy systems that are burdening the business.
  • ITSM best practices as exemplified by ITIL can streamline the convergence of IT and operational assets while supporting a positive cultural shift to help operational business units integrate with IT activities and standards.

Best-practices management of all critical assets based on these guidelines will help utilities facilitate the visibility, control and standardization required to continuously improve today’s power generation and delivery environment.

ENDNOTES

  1. Gartner’s 2006 CIO Agenda survey.
  2. 2. Bradley Williams, Zarko Sumic, James Spiers, Kristian Steenstrup, “IT and OT Interaction: Why Confl ict Resolution Is Important,” Gartner Industry Research, Sept. 15, 2006.

Opportunity Ahead: The Aging Workforce

Conventional thinking has it that the utility industry’s aging workforce represents a critical problem demanding a call to arms. But is an aging workforce really just a human resources dilemma? Or can it be viewed more broadly as a window through which utilities can examine ways to foster positive change for the future of their organizations? When viewed in this light, the exit of a large cohort of skilled workers may represent the most significant opportunity a utility will ever confront – one that could fundamentally alter the way it does business and upgrades financial performance.

At most utilities, little or no opportunity exists for significant revenue growth (a situation that’s persisted for some time) at the same time that personnel-related expenses have continued to increase and squeeze profit margins. To achieve the annual earnings improvement targets of 10 to 15 percent that stakeholders have come to expect, utilities have had no alternative but to reduce ongoing operational expenses dramatically – and often that’s meant cutting staff.

But the days of dramatic expense cuts based on typical cost reduction strategies are all but over. With nearly a third of the industry eligible to retire today, further personnel cuts aren’t warranted. Utilities are now confronted with a unique opportunity to make business improvements to reduce future costs. One approach involves using innovative technology to:

  • Lessen headcount requirements and make better use of reduced staffs;
  • Capture the knowledge base of skilled workers before they depart the workforce;
  • Reduce the number of people required to carry out a task by improving data access and communications among operating units;
  • Emphasize availability and use of key skills (rather than number of personnel);
  • Create true “best practices” (rather than continue to rely on “status quo practices”); and
  • Develop a “digital organization” that excites and retains new hires.

The utilities that will be successful in the future – the high-performance utilities – won’t hire their way to success. After all, there will be fewer skilled workers available for hire; recruitment will remain costly; and ongoing personnel-related expenses will continue to escalate. Instead, the high-performance utility will institutionalize its key procedures and business processes (by capturing existing employee knowledge) and exploit documented best practices before employees fly out the door.

Forward-looking utilities must invest in strategic technology, using a variety of partner models to meet their requirements. Technology solutions that solve localized issues will not address the future. Solutions that are able to look at a utility horizontally – as an organization with many parts that need to perform as a single entity – will serve as an important means of dealing with the disappearing workforce.

WHAT ARE UTILITIES LOSING … AND GAINING?

The imminent loss of critical skills and knowledge base caused by an aging workforce approaching retirement represents a demographic tsunami – a force unprecedented in business history. During the next five to 10 years, many utilities will lose as much as 50 percent of their current workforce to retirement. Clerical and administrative staff, as well as field technicians, managers and supervisors, engineers, IT personnel and business executives will all be part of the retirement wave.

The effect of utility workforce retirement is more profound than simple personnel turnover, because it represents a loss of critical knowledge. This knowledge base embodies the art of the organization – not just the information documented in manuals, maps, procedures and databases but also the organization’s culture and attitudes.

As younger workers replace an aging and departing workforce, utilities could witness the fracture of the motivational belief system that once bound the workforce. To meet the utility’s objectives, new workers need to have access to the expertise and knowledge of prior generations of workers. They can then build on this knowledge with their own experiences, helping the utility achieve a new and positive culture for success.

CONVENTIONAL SOLUTIONS

Industry literature suggests a number of solutions to the aging utility workforce problem:

  • Long-term staffing plans;
  • Partnerships with universities and community colleges;
  • Continuing education and training programs;
  • Active involvement in industry organizations; and
  • Internal knowledge sharing programs.

Each of these approaches plays a role in the solution, but collectively they still fall short of truly lessening the impact of the loss of half (or more) of a utility’s workforce. To wit: the number of students enrolled in college math and science programs (with the exception of computer and information science) continues to decline. And in the last 15 years, colleges and universities have seen a 50 percent decline in the number of graduating engineers (one of many skill sets a utility requires). All of which means that as utilities lose their skilled workers, they will not be able to replace those skills by drawing from the current labor pool. Solutions other than hiring programs will be needed to bridge the gap between skills lost and skills needed.

THE ROLE OF TECHNOLOGY

Much of the technology utilities have implemented over the past five to 10 years has taken the form of “point” software solutions. By solving specific and limited problems, this software has tended to reinforce status quo business practices rather than enable innovation or better problem solving.

In many utilities, status quo means a vertical organization – a group of departmental silos that define the utility’s corporate structure. In a vertical structure, each group or department operates as a somewhat isolated entity, and each group “owns” the work to which it is assigned. But the manner in which utilities conduct business is comprised of horizontal processes spanning the office and the field – processes that are driven by the customer, whether commercial, industrial or residential.

Thus, vertical organizations often inhibit the type of change that can reduce headcount requirements and ensure better communication between remaining personnel. But changes that help flatten an organization horizontally – so that operations and procedures are viewed from end to end – can streamline business processes to improve handoffs between job roles and eliminate time-consuming and labor-intensive administration steps.

In the future, high-performance utilities will of necessity implement horizontal business process solutions that involve multiple systems spanning former organizational silos such as customer service and distribution operations. Horizontal solutions represent a quantum change in project complexity that will stretch many utilities’ internal organizations and define the systems integration market in the future.

The major opportunity offered by an integrated, horizontal solution lies in the creation of a strategic technology platform that offers the benefits of positive change and value creation. Such changes will be critical in supporting a utility as it undergoes workforce attrition and cultural evolution due to workforce retirements. The following represent some of the opportunities for change that high-performance utilities should be reviewing.

Business Process Change Opportunities

The term best practices has sometimes been defined as a generic methodology or a detailed scripting of events rather than an organized, documented view of the preferred and streamlined way to carry out a particular procedure. Many major technology initiatives and systems implementations have failed to deliver value to the utility because the true “best” practice is never defined, and therefore the transformation of the business process never occurs. The pressure to reduce costs and the rush to adopt scripts of existing procedures are the primary reasons for this disappointment.

The high-performance utility of the future, then, must commit to accurately defined best practices and a program of continuous process improvement. Such programs reduce costs by simplifying and standardizing business processes, eliminating paperwork and redundant data, reducing personnel interface points and viewing a utility’s operations from office to field as a single continuum. A strong strategic technology platform can support the capture and reinforcement of these standards.

Design Engineering Opportunities

The average investor-owned utility in North America has more than 50 design engineers architecting construction work undertaken by the utility. The design of such work involves significant systems support, including a geographic information system (GIS) and a graphical work design interface that links the GIS to a work management system.

Much of the construction work and underlying design work undertaken by utilities is repetitive. This type of repetitive work – particularly for light or medium construction activities – lends itself to design templates. In fact, design templates could accommodate as much as 80 percent of the design engineering workload. The development of a best practice based on standard designs for discrete types of work (and institutionalizing a standard design as a replicable template for the engineering department) can reduce a utility’s dependence on an increasingly limited supply of talented engineering labor.

Scheduling and Dispatching Opportunities

The average investor-owned utility (IOU) in North America has more than 700 field crews serving trouble response, customer service, maintenance and construction activities. Although job function definitions and responsibilities vary among utilities, the roles that manage the deployment of field crews may be defined as 1) schedulers; 2) dispatchers; 3) administrative personnel; and 4) field supervisors. All of these individuals may actively schedule or dispatch the field workforce, even within the same utility.

The same average IOU also has as many as 60 full-time employees (approximately one for every 12 field crews) involved in scheduling, dispatching, monitoring and providing administrative support to the field workforce. The staff handling these tasks is often functionally, organizationally and geographically dispersed – thanks largely to the point software mobile applications that mirror the organizational silos that acquired the applications. Typically, each piece of software addresses one job type: emergencies, customer service, maintenance or construction. Accordingly, each department employs multiple staff to schedule and/or dispatch each type of job.

This kind of environment spells opportunity for utilities facing shrinking workforces, since a single scheduling and dispatching technology can have immense cost-reduction implications (including reducing redundant job roles.)

The scheduling of field personnel can also be worked into a single dispatch strategy. Utilities need a unified method of work allocation – a kind of utility command and control center for scheduling and dispatching all work. The right strategic technology platform incorporates significant business intelligence, understands job dependencies, employs least-cost routing and continually provides the user with an optimized schedule throughout the workday. As the scheduling software assumes more of the scheduling responsibility, the 60 full-time employees formerly required by an average utility become unnecessary, thereby eliminating a major staffing concern.

Wireless Opportunities

For the last two years in North America, utilities have issued more RFPs for mobile workforce management than any other application domain. All of the top 100 North American IOUs employ some form of mobile deployment. However, these applications are point software solutions that address one job type, such as trouble reporting; they do not currently support a horizontal dispatching and scheduling function. Furthermore, many utilities lack an overarching, dedicated wireless strategy to fully mobilize the workforce.

Utilities require a plug-and-play wireless communications architecture that 1) manages the fl ow of data between office and field; 2) maximizes the bandwidth and throughput of existing utility RF radio, wire line and wireless networks; 3) assigns priorities to time-sensitive data; and 4) provides least-cost routing (network choice). This represents a complex undertaking – and one that no utility has yet mastered. There is no generic plug-and-play platform that manages field workforces in this way. Indeed, a universal communications platform (dispatch) that manages all types of work has been the holy grail of the network connectivity business. No utility has this capability today.

Once it is achieved, however, a universal architecture will allow the utility to plug-and-play back-office and mobile applications to broaden the footprint of work conducted wirelessly in the field. A universal mobile application controller that manages all types of work will power the future of mobile computing for the industry – but no utility has this capability today. In addition to application and network independence, the utility’s wireless enterprise strategy must accommodate the management of multiple field devices, and the supporting server and communications hardware/middleware environment.

An integrated universal communications platform must be viewed as the next technology that will enable utilities to lessen their dependence on headcount. The technologies that support such a platform are being created now; in order to blunt the impact of a disappearing workforce, high-performance utilities need to begin partnering with systems integrators that can bring these technologies to the table.

THE FUTURE OF TECHNOLOGY: SOLUTION OPTIMIZATION

The next significant strategic technologies implemented by utilities will be those that optimize solutions and processes. These systems will help the utility institutionalize the knowledge of seasoned employees and incorporate that knowledge into documented, sustainable best practices. In addition, new strategic technologies will help the utility evolve best practices over time through a program of continuous process improvement. Furthermore, these new technologies will provide the utility with ways to most effectively use both new and existing applications to perform work across the entire horizontal utility organization.

Instead of tactically buying enabling technology such as software, utilities will strategically partner with organizations that can deliver technology that creates value within the utility. Utilities will increasingly seek partners who own the business result, not simply the process or the IT infrastructure. Such partners will share utility risk and reward in a program of continuous process improvement, as they and the utility constantly refine and optimize solutions.

CONCLUSION

What will the high-performance utility look like in 10 years? For starters, it will have fewer employees and more new faces. It will have lost much of the culture it relied on to drive its business forward. But if it makes the right plans today, it will ultimately gain a new culture that takes advantage of the best of the old knowledge combined with the advantages of a new strategic technology platform. The new platform will unite all segments of utility operations within a single set of business goals. A workforce that is disappearing due to retirement doesn’t need to spell disaster if a utility takes steps now. These steps include applying conventional hiring approaches, embracing new technology and seeking out vendor partnerships to help unite and optimize the utility’s work processes.

The Technology Demonstration Center

When a utility undergoes a major transformation – such as adopting new technologies like advanced metering – the costs and time involved require that the changes are accepted and adopted by each of the three major stakeholder groups: regulators, customers and the utility’s own employees. A technology demonstration center serves as an important tool for promoting acceptance and adoption of new technologies by displaying tangible examples and demonstrating the future customer experience. IBM has developed the technology center development framework as a methodology to efficiently define the strategy and tactics required to develop a technology center that will elicit the desired responses from those key stakeholders.

KEY STAKEHOLDER BUY-IN

To successfully implement major technology change, utilities need to consider the needs of the three major stakeholders: regulators, customers and employees.

Regulators. Utility regulators are naturally wary of any transformation that affects their constituents on a grand scale, and thus their concerns must be addressed to encourage regulatory approval. The technology center serves two purposes in this regard: educating the regulators and showing them that the utility is committed to educating its customers on how to receive the maximum benefits from these technologies.

Given the size of a transformation project, it’s critical that regulators support the increased spending required and any consequent increase in rates. Many regulators, even those who favor new technologies, believe that the utility will benefit the most and should thus cover the cost. If utilities expect cost recovery, the regulators need to understand the complexity of new technologies and the costs of the interrelated systems required to manage these technologies. An exhibit in the technology center can go “behind the curtain,” giving regulators a clearer view of these systems, their complexity and the overall cost of delivering them.

Finally, each stage in the deployment of new technologies requires a new approval process and provides opportunities for resistance from regulators. For the utility, staying engaged with regulators throughout the process is imperative, and the technology center provides an ideal way to continue the conversation.

Customers. Once regulators give their approval, the utility must still make its case to the public. The success of a new technology project rests on customers’ adoption of the technology. For example, if customers continue using appliances as they always did, at a regular pace throughout the day and not adjusting for off-peak pricing, the utility will fail to achieve the major planned cost advantage: a reduction in production facilities. Wide-scale customer adoption is therefore key. Indeed, general estimates indicate that customer adoption rates of roughly 20 percent are needed to break even in a critical peak-pricing model. [1]

Given the complexity of these technologies, it’s quite possible that customers will fail to see the value of the program – particularly in the context of the changes in energy use they will need to undertake. A well-designed campaign that demonstrates the benefits of tiered pricing will go a long way toward encouraging adoption. By showcasing the future customer experience, the technology center can provide a tangible example that serves to create buzz, get customers excited and educate them about benefits.

Employees. Obtaining employee buy-in on new programs is as important as winning over the other two stakeholder groups. For transformation to be successful, an understanding of the process must be moved out of the boardroom and communicated to the entire company. Employees whose responsibilities will change need to know how they will change, how their interactions with the customer will change and what benefits are in it for them. At the same time, utility employees are also customers. They talk to friends and spread the message. They can be the utility’s best advocates or its greatest detractors. Proper internal communication is essential for a smooth transition from the old ways to the new, and the technology center can and should be used to educate employees on the transformation.

OTHER GOALS FOR THE TECHNOLOGY DEMONSTRATION CENTER

The objectives discussed above represent one possible set of goals for a technology center. Utilities may well have other reasons for erecting the technology center, and these should be addressed as well. As an example, the utility may want to present a tangible display of its plans for the future to its investors, letting them know what’s in store for the company. Likewise, the utility may want to be a leader in its industry or region, and the technology center provides a way to demonstrate that to its peer companies. The utility may also want to be recognized as a trendsetter in environmental progress, and a technology center can help people understand the changes the company is making.

The technology center needs to be designed with the utility’s particular environment in mind. The technology center development framework is, in essence, a road map created to aid the utility in prioritizing the technology center’s key strategic priorities and components to maximize its impact on the intended audience.

DEVELOPING THE TECHNOLOGY CENTER

Unlike other aspects of a traditional utility, the technology center needs to appeal to customers visually, as well as explain the significance and impact of new technologies. The technology center development framework presented here was developed by leveraging trends and experiences in retail, including “experiential” retail environments such as the Apple Stores in malls across the United States. These new retail environments offer a much richer and more interactive experience than traditional retail outlets, which may employ some basic merchandising and simply offer products for sale.

Experiential environments have arisen partly as a response to competition from online retailers and the increased complexity of products. The Technology Center Development Framework uses the same state-of-the-art design strategies that we see adopted by high-end retailers, inspiring the executives and leadership of the utility to create a compelling experience that will enable the utility to elicit the desired response and buy-in from the stakeholders described above.

Phase 1: Technology Center Strategy

During this phase, a utility typically spends four to eight weeks developing an optimal strategy for the technology center. To accomplish this, planners identify and delineate in detail three major elements:

  • The technology center’s goals;
  • Its target audience; and
  • Content required to achieve those goals.

As shown in Figure 1, these pieces are not mutually exclusive; in fact, they’re more likely to be iterative: The technology center’s goals set the stage for determining the audience and content, and those two elements influence each other. The outcome of this phase is a complete strategy road map that defines the direction the technology center will take.

To understand the Phase 1 objectives properly, it’s necessary to examine the logic behind them. The methodology focuses on the three elements mentioned previously – goals, audience and content – because these are easily overlooked and misaligned by organizations.

Utility companies inevitably face multiple and competing goals. Thus, it’s critical to identify the goals specifically associated with the technology center and to distinguish them from other corporate goals or goals associated with implementing a new technology. Taking this step forces the organization to define which goals can be met by the technology center with the greatest efficiency, and establishes a clear plan that can be used as a guide in resolving the inevitable future conflicts.

Similarly, the stakeholders served by the utility represent distinct audiences. Based on the goals of the center and the organization, as well as the internal expectations set by managers, the target audience needs to be well defined. Many important facets of the technology center, such as content and location, will be partly determined by the target audience. Finally, the right content is critical to success. A regulator may want to see different information than customers.

In addition, the audience’s specific needs dictate different content options. Do the utility’s customers care about the environment? Do they care more about advances in technology? Are they concerned about how their lives will change in the future? These questions need to be answered early in the process.

The key to successfully completing Phase 1 is constant engagement with the utility’s decision makers, since their expectations for the technology center will vary greatly depending on their responsibilities. Throughout this phase, the technology center’s planners need to meet with these decision makers on a regular basis, gather and respect their opinions, and come to the optimal mix for the utility on the whole. This can be done through interviews or a series of workshops, whichever is better suited for the utility. We have found that by employing this process, an organization can develop a framework of goals, audience and content mix that everyone will agree on – despite differing expectations.

Phase 2: Design Characteristics

The second phase of the development framework focuses on the high-level physical layout of the technology center. These “design characteristics” will affect the overall layout and presentation of the technology center.

We have identified six key characteristics that need to be determined. Each is developed as a trade-off between two extremes; this helps utilities understand the issues involved and debate the solutions. Again, there are no right answers to these issues – the optimal solution depends on the utility’s environment and expectations:

  • Small versus large. The technology center can be small, like a cell phone store, or large, like a Best Buy.
  • Guided versus self-guided. The center can be designed to allow visitors to guide themselves, or staff can be retained to guide visitors through the facility.
  • Single versus multiple. There may be a single site, or multiple sites. As with the first issue (small versus large), one site may be a large flagship facility, while the others represent smaller satellite sites.
  • Independent versus linked. Depending on the nature of the exhibits, technology center sites may operate independently of each other or include exhibits that are remotely linked in order to display certain advanced technologies.
  • Fixed versus mobile. The technology center can be in a fixed physical location, but it can also be mounted on a truck bed to bring the center to audiences around the region.
  • Static versus dynamic. The exhibits in the technology center may become outdated. How easy will it be to change or swap them out?

Figure 2 illustrates a sample set of design characteristics for one technology center, using a sample design characteristic map. This map shows each of the characteristics laid out around the hexagon, with the preference ranges represented at each vertex. By mapping out the utility’s options with regard to the design characteristics, it’s possible to visualize the trade-offs inherent in these decisions, and thus identify the optimal design for a given environment. In addition, this type of map facilitates reporting on the project to higher-level executives, who may benefit from a visual executive summary of the technology center’s plan.

The tasks in Phase 2 require the utility’s staff to be just as engaged as in the strategy phase. A workshop or interviews with staff members who understand the various needs of the utility’s region and customer base should be conducted to work out an optimal plan.

Phase 3: Execution Variables

Phases 1 and 2 provide a strategy and design for the technology center, and allow the utility’s leadership to formulate a clear vision of the project and come to agreement on the ultimate purpose of the technology center. Phase 3 involves engaging the technology developers to identify which aspects of the new technology – for example, smart appliances, demand-side management, outage management and advanced metering – will be displayed at the technology center.

During this phase, utilities should create a complete catalog of the technologies that will be demonstrated, and match them up against the strategic content mix developed in Phase 1. A ranking is then assigned to each potential new technology based on several considerations, such as how well it matches the strategy, how feasible it is to demonstrate the given technology at the center, and what costs and resources would be required. Only the most efficient and well-matched technologies and exhibits will be displayed.

During Phase 3, outside vendors are also engaged, including architects, designers, mobile operators (if necessary) and real estate agents, among others. With the first two phases providing a guide, the utility can now open discussions with these vendors and present a clear picture of what it wants. The technical requirements for each exhibit will be cataloged and recorded to ensure that any design will take all requirements into account. Finally, the budget and work plan are written and finalized.

CONCLUSION

With the planning framework completed, the team can now build the center. The framework serves as the blueprint for the center, and all relevant benchmarks must be transparent and open for everyone to see. Disagreements during the buildout phase can be referred back to the framework, and issues that don’t fit the framework are discarded. In this way, the utility can ensure that the technology center will meet its goals and serve as a valuable tool in the process of transformation.

Thank you to Ian Simpson, IBM Global Business Services, for his contributions to this paper.

ENDNOTE

  1. Critical peak pricing refers to the model whereby utilities use peak pricing only on days when demand for electricity is at its peak, such as extremely hot days in the summer.

Using Analytics for Better Mobile Technology Decisions

Mobile computing capabilities have been proven to drive business value by providing traveling executives, field workers and customer service personnel with real-time access to customer data. Better and more timely access to information shortens response times, improves accuracy and makes the workforce more productive.

However, although your organization may agree that technology can improve business processes, different stakeholders – IT management, financial and business leadership and operations personnel – often have different perspectives on the real costs and value of mobility. For example, operations wants tools that help employees work faster and focus more intently on the customer; finance wants the solution that costs the least amount this quarter; and IT wants to implement mobile projects that can succeed without draining resources from other initiatives.

It may not be obvious, but there are ways to achieve everyone’s goals. Analytics can help operations, finance and IT find common ground. When teams understand the data, they can understand the logic. And when they understand the logic they can support making the right decision.

EXPOSING THE FORMULA

Deploying mobile technology is a strategic initiative with far-reaching consequences for the health of an enterprise. In the midst of evaluating a mobile project, however, it’s easy to forget that the real goal of hardware-acquisition initiatives is to make the workforce more productive and improve both the top and bottom lines over the long term.

Most decision-analytics tools focus on up-front procurement questions alone, because the numbers seem straightforward and uncomplicated. But these analyses miss the point. The best analysis is one that can determine which of the solutions will provide the most advantages to the workforce at the lowest possible overall cost to the organization.

To achieve the best return on investment we must do more than recoup an out-of-pocket expense: Are customers better served? Are employees working better, faster, smarter? Though hard to quantify, these are the fundamental aspects that determine the return on investment (ROI) of technology.

It’s possible to build a vendor-neutral analysis to calculate the total cost of ownership (TCO) and ROI of mobile computers. Panasonic Computer Solutions Company, the manufacturer of Toughbook notebooks, enlisted the services of my analytics company, Serious Networks, Inc., to develop an unbiased TCO/ROI application to help companies make better decisions when purchasing mobile computers.

The Panasonic-sponsored operational analysis tool provides statistically valid answers by performing a simulation of the devices as they would be used and managed in the field, generating a model that compares the costs and benefits of multiple manufacturers’ laptops. Purchase cost, projected downtime, the range of wireless options, notebook features, support and other related costs are all incorporated into this analytic toolset.

Using over 100 unique simulations with actual customers, four key TCO/ROI questions emerged:

  • What will it cost to buy a proposed notebook solution?
  • What will it cost to own it over the life of the project?
  • What will it cost to deploy and decommission the units?
  • What value will be created for the organization?

MOVING BEYOND GUESSTIMATES – CONSIDERING COSTS AND VALUE OVER A LIFETIME

There is no such thing as an average company, so an honest analysis uses actual corporate data instead of industry averages. Just because a device is the right choice for one company does not make it the right choice for yours.

An effective simulation takes into account the cost of each competing device, the number of units and the rate of deployment. It calculates the cost of maintaining a solution and establishes the value of productive time using real loaded labor rates or revenue hours. It considers buy versus lease questions and can extrapolate how features will be used in the field.

As real-world data is entered, the software determines which mobile computing solution is most likely to help the company reach its goals. Managers can perform what-if analyses by adjusting assumptions and re-running the simulation. Within this framework, managers will build a business case that forecasts the costs of each mobile device against the benefits derived over time (see Figures 1 and 2).

MAKING INTANGIBLES TANGIBLE

The 90-minute analysis process is very granular. It’s based on the industry segment – because it simulates the tasks of the workforce – and compares up to 10 competing devices.

Once devices are selected, purchase or lease prices are entered, followed by value-added benefits like no-fault warranties and on-site support. Intangible factors favoring one vendor over another, such as incumbency, are added to the data set. The size and rate of the deployment, as well as details that determine the cost of preparing the units for the workforce, are also considered.

Next the analysis accounts for the likelihood and cost of failure, using your own experience as a baseline. Somewhat surprisingly, the impact of failure is given less weight than most outside observers would expect. Reliability is important, but it’s not the only or most important attribute.

What is given more weight are productivity and operational enhancements, which can have a significantly greater financial impact than reliability, because statistically employees will spend much more of their time working than dealing with equipment malfunctions.

A matrix of features and key workforce behaviors is developed to examine the relative importance of touch screens, wireless and GPS, as well as each computer vendor’s ability to provide those features as standard or extra-cost equipment. The features are rated for their time and motion impact on your organization, and an operations efficiency score is applied to imitate real-world results.

During the session, the workforce is described in detail, because this information directly affects the cost and benefit. To assess the value of a telephone lineman’s time, for example, the system must know the average number of daily service orders, the percentage of those service calls that require re-work and whether linemen are normally in the field five, six or seven days a week.

Once the data is collected and input it can be modified to provide instantaneous what-if, heads-up and break-even analyses reports – without interference from the vendor. The model is built in Microsoft Excel so that anyone can assess the credibility of the analysis and determine independently that there are no hidden calculations or unfair formulas skewing the results.

CONCLUSION

The Panasonic simulation tool can help different organizations within a company come to consensus before making a buying decision. Analytics help clarify whether a purpose-built rugged or business-rugged system or some other commercial notebook solution is really the right choice for minimizing the TCO and maximizing the ROI of workforce mobility.

ABOUT THE AUTHOR

Jason Buk is an operations director at Serious Networks, Inc., a Denver-based business analytics firm. Serious Networks uses honest forecasting and rigorous analysis to determine what resources are most likely to increase the effectiveness of the workforce, meet corporate goals and manage risk in the future.