Tag: Ron Wallace

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Today’s utility companies are being driven to upgrade their aging transmission and distribution networks in the face of escalating energy generation costs, serious environmental challenges and rising demand for cleaner, distributed generation from both developing and digital economies worldwide.

The current utilities environment requires companies to drive down costs while increasing their ability to monitor and control utility assets. Yet, due to aging infrastructure, many utilities operate without the benefit of real-time usage and distribution loads – while also contending with limited resources for repair and improvement. Even consumers, with climate change on their minds, are demanding that utilities find more innovative ways to help them reduce energy consumption and costs.

One of the key challenges facing the industry is how to take advantage of new technologies to better manage customer service delivery today and into the future. While introducing this new technology, utilities must keep data and networks secure to be in compliance with critical infrastructure protection regulations. The concept of “service management” for the smart grid provides an approach for getting started.

A Smart Grid

A smart grid is created with new solutions that enable new business models. It brings together processes, technology and business partners, empowering utilities with an IP-enabled, continuous sensing network that overlays and connects a utility’s equipment, devices, systems, customers, partners and employees. A smart grid also enables on-demand access to data and information, which is used to better manage, automate and optimize operations and processes throughout the utility.

A utility relies on numerous systems, which reside both within and outside their physical boundaries. Common internal systems include: energy trading systems (ETS), customer information systems (CIS), supervisory control and data acquisition systems (SCADA), outage management systems (OMS), enterprise asset management (EAM); mobile workforce management systems (MWFM), geospatial information systems (GIS) and enterprise resource planning systems (ERP).

These systems are purchased from multiple vendors and often use a variety of protocols to communicate. In addition, utilities must interface with external systems – and often integrate all of them using a point-to-point model and establish connectivity on an as-needed basis. The point-to-point approach can result in numerous complex connections that need to be maintained.

Service Management

The key concept behind service management is the idea of managing assets, networks and systems to provide a “service,” as opposed to simply operating the assets. For example, Rolls Royce Civil Aerospace division uses this concept to sell “pounds of thrust” as a service. Critical to a utility’s operation is the ability to manage all facets of the services being delivered. Also critical to the operation of the smart grid are new solutions in advanced meter management (AMM), network automation and analytics, and EAM, including meter asset management.

A service management platform provides a way for utility companies to manage the services they deliver with their enterprise and information technology assets. It provides a foundation for managing the assets, their configuration, and the interrelationships key to delivering services. It also provides a means of defining workflow for the instantiation and management of the services being delivered. Underlying this platform is a range of tools that can assist in management of the services.

Gathering and analyzing data from advanced meters, network components, distribution devices, and legacy SCADA systems provides a solid foundation for automating service management. When combined with the information available in their asset management systems, utility companies can streamline operations and make more efficient use of valuable resources.

Advanced Reading

AMM centers on a more global view of the informational infrastructure, examining how automatic meter reading (AMR) and advanced metering infrastructure (AMI) integrate with other information systems to provide value-added benefits. It is important to note that for many utilities, AMM is considered to be a “green” initiative since it has the ability to influence customer usage patterns and, therefore, lower peak demand.

The potential for true business transformation exists through AMM, and adopting this solution is the first stage in a utility’s transformation to a more information-powered business model. New smart meters are network addressable, and along with AMM, are core components of the grid. Smart meters and AMM provide the capability to automatically collect usage data in near real time and to transport meter reads at regular intervals or on demand.

AMR/AMIs that aggregate their data in collection servers or concentrators, and expose it through an interface, can be augmented with event management products to monitor the meter’s health and operational status. Many organizations already deploy these solutions for event management within a network’s operations center environments, and for consolidated operations management as a top-level “manager of managers.”

A smart grid includes many devices other than meters, so event management can also be used to monitor the health of the rest of the network and IT equipment in the utility infrastructure. Integrating meter data with operations events gives network operations center operators a much broader view of a utility’s distribution system.

These solutions enable end-to-end data integration, from the meter collection server in a substation to the back-end helpdesk and billing applications. This approach can lead to improved speed and accuracy of data, while leveraging existing equipment and applications.

Network Automation and Analytics

Most utility companies use SCADA systems to collect data from sensors on the energy grid and send events to applications with SCADA interfaces. These systems collect data from substations, power plants and other control centers. They then process the data and allow for control actions to be sent back out. Energy management and distribution management systems typically provide additional features on top of SCADA, targeting either the transmission or distribution grids.

SCADA systems are often distributed on several servers (anywhere from two to 100) connected via a redundant local area network. The SCADA system, in turn, communicates with remote terminal units (RTUs), other devices, and other computer networks. RTUs reside in a substation or power plant, and are hardwired to other devices to bring back meaningful information such as current megawatts, amps, volts, pressure, open/closed or tripped. Distribution business units within a utility company also utilize SCADA systems to track low voltage applications, such as meters and pole drops, compared to the transmission business units’ larger assets, including towers, circuits and switchgear.

To facilitate network automation, IT solutions can help utilities to monitor and analyze data from SCADA systems in real time, monitor the computer network systems used to deploy SCADA systems, and better secure the SCADA network and applications using authentication software. An important element of service management is the use of automation to perform a wide range of actions to improve workfl ow efficiency. Another key ingredient is the use of service level agreements (SLAs) to give a business context for IT, enabling greater accountability to business user needs, and improving a utility’s ability to prioritize and optimize.

A smart grid includes a large number of devices and meters – millions in a large utility – and these are critical to a utility’s operations. A combination of IT solutions can be deployed to manage events from SCADA devices, as well as the IT equipment they rely on.

EAM For Utilities

Historically, many utility companies have managed their assets in silos. However, the emergence of the smart grid and smart meters, challenges of an aging workforce, an ever-demanding regulatory environment, and the availability of common IT architecture standards, are making it critical to standardize on one asset management platform as new requirements to integrate physical assets and IT assets arise (see Figure 1).

Today, utility companies are using EAM to manage work in gas and electric distribution operations, including construction, inspections, leak management, vehicles and facilities. In transmission and substation, EAM software is used for preventative and corrective maintenance and inspections.

EAM also helps track financial assets such as purchasing, depreciation, asset valuation and replacement costs. This solution helps integrate this data with ERP systems, and stores the history of asset testing and maintenance management. It integrates with GIS or other mapping tools to create geographic and spatial views of all distribution and smart grid assets.

Meter asset management is another area of increasing interest, as meters have an asset lifecycle similar to most other assets in a utility. Meter asset management involves tracking the meter from receipt to storeroom, to truck, to final location – as compared to managing the data the meter produces.

Now there is an IT asset management solution with the ability to manage meters as part of the IT network. This solution can be used to provision the meter, track configurations and provide service desk functionality. IT asset management solutions also have the ability to update meter firmware, and easily move and track the location and status of the assets over time in conjunction with a configuration database.

Reducing the number of truck rolls is another key focus area for utility companies. Using a combination of solutions, companies can:

  • Better manage the lifecycles of physical assets such as meters, meter cell relays, and broadband over powerline (BPL) devices to improve preventive maintenance;
  • Reconcile deployed asset information with information collected by meter data management systems;
  • Correlate the knowledge of physical assets with problems experienced with the IT infrastructure to better analyze a problem for root cause; and
  • Establish more efficient business process workflows and strengthen governance across a company.

Utilities are facing many challenges today and taking advantage of new technologies that will help better manage the delivery of service to customers tomorrow. The deployment of the smart grid and related solutions is a significant initiative that will be driving utilities for the next 10 years or more.

The concept of “service management” for the smart grid provides an approach for getting started. But these do not need to be tackled all at once. Utilities should develop a roadmap for the smart grid; each one will depend on specific priorities. But utilities don’t have to go it alone. The smart grid maturity model (SGMM) can enable a utility to develop a roadmap of activities, investments and best practices to ensure success and progress with available resources.

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.