The future of information technology (IT) inside an electric utility is bright, given that the nature of Smart Grid is to layer telecom and IT concepts onto traditional power engineering to create a new kind of utility. In short, IT is on its way to becoming a much more strategic function inside utilities with the advent of Smart Grid. But getting from where we are today to this bright new future will be a difficult journey, punctuated by any number of organizational challenges, not the least of which will be finding a way to finance the myriad changes needed to transform a traditional utility IT department into the foundation of a sustainable Smart Grid. The steps outlined in this brief provide an outline to help ensure that the budget for IT changes meets the demands of the Smart Grid transformation and that the projects enjoy broad support within the utility.
To enable the visions of Smart Grid to become reality, utility IT managers will need to update complex legacy systems and integrate them with new emerging technologies. They will also need to align with upgrades to power engineering systems in the operational technology (OT) side of the utility. Telecom assets in the field and in corporate offices must be upgraded to align with advances in digital applications and platforms under the Smart Grid umbrella. And in the utility back office, technology assets from servers to storage must be updated to support the massive amounts of new data that will flow from new data gathering sensors and appliances, from smart meters to distributed automaion (DA) devices.
But IT budgets can only grow so fast, and IT departments must manage political expectations, walking a tightrope between sufficient strategic transformation to achieve the Smart Grid visions, and the design and execution of a manageable, fundable transition plan that brings the rest of the utility along for the ride. At Austin Energy, we faced these very same issues in 2003, and as documented in Chapter 4 of The Advanced Smart Grid, we identified four key strategic action items that would be critical to focus on during the Smart Grid transformation:
- COORDINATE: coordinate the purchasing of technology company-wide, but also coordinate all IT resources to improve service levels company-wide;
- SIMPLIFY: reduce the number of languages and applications supported company-wide; automate key missing processes and integrate with legacy processes; and deploy a portal for business managers;
- EXPAND/UPGRADE: expand network architecture to support e-commerce and any-device access; upgrade data centers, security, and the disaster recovery plan; implement company-wide Smart Grid Architecture; and build an enterprise data bus and data warehouse/data marts; and finally,
- INVEST: invest in quality, documentation and training, to provide the utility with the necessary skill sets for a sustainable transition.
If a utility is to meet critical and expanding needs in tight economic times, the entire utility management must recognize that it needs to do more with less going forward and that it must coordinate its spending activity. To win the ongoing support of the organization to transform the IT department, it is necessary that IT take a leadership role to ensure that its plans blend with those of OT. A critical tool to support such fusion is the Technology Governance Plan, which ensures that all utility departments coordinate and contribute in the planning of IT systems.
The beginning of such coordination must involve an audit of different languages and applications in place, which will produce a gap analysis, highlighting missing processes. Such a company-wide business process improvement effort attacks wasteful processes and opens the door to potential savings from outsourcing non-core functions.
Expansion of network architecture is key to support new functions enabled by new sensor devices and new business processes. As noted in a previous IssueAlert article,
The Value of Service Oriented Architecture, the potential of a Smart Grid is dramatically enhanced with extra time and attention to architecture, and using SOA is a key efficiency step. A focus on data handling and management is also critical to the success of Smart Grid architecture, given the influx of data from Smart Grid devices.
Finally, as the utility works together to recreate itself as a Smart Grid, department by department, it is critical to invest in the skill sets and processes that will ensure the success of such a complex, transformative project. Training and certification in project management and company-wide communication of wins and successes contribute to smooth transition and avoid costly project hiccups.
Keys to managing the IT transformation budget start with alignment of IT plans with strategic objectives company-wide, and move on to clear communication of both the challenges and the successes throughout the project, and elimination of wasteful, redundant, or outdated business processes. An extensive planning effort focused on designing architecture that accommodates the range of future customer use cases (see Page 4 of UtiliPoint’s White Paper,
The Challenge of the Emerging Smart Consumer) will help to avoid investment in inappropriate technologies. Finally, the utility must acknowledge the complexity of the pending Smart Grid transformation and prepare its staff with the appropriate training to avoid costly missteps and project deviations. In the end, a Smart Grid will transform the utility, provide efficiencies that save money, and enable new services and new sources of revenue, providing an ample return on investment (ROI).
John Cooper, co-author of The Advanced Smart Grid, has recently joined the team at UtiliPoint and its sister company, Consonus, to further the goals and realize the vision he developed over the last 15 years as a Smart Grid pioneer and innovator, captured in this compelling and highly useful new book. John may be reached directly by e-mail at jcooper@utilipoint.com.
