Preparing for the IoT: Creating a Foundation for Utilities

There’s never been a more engaging time to be in the utility business. Change is everywhere. Genuinely new business models are a reality today. Never before do I recall a time when “exciting” and “utilities” could credibly be put into the same sentence.

Now, in order to thrive in a period of genuinely disruptive change, innovation is essential. And often, innovation is facilitated by new tools and technologies as well as new ways of thinking. So there’s most certainly a place at the utility for some of the technologies and wider concepts riding highest in the hype cycles right now. Innovators and strategists – the Directors of Transformation, the Future Networks teams and the like should be creating visions and making plans around new interactions; new data; new business models; new kinds of people they might need in their 21st century business. Studies like McKinsey’s new Internet of Things (IoT) report should be required reading for them.

But it can’t all be about visions. At the same time, utilities need to keep the lights on today. They can’t ignore the pressing needs of the business-as-usual. Customer expectations are increasing everywhere. Assets are ageing everywhere. Generation and load profiles have become far less predictable. Clever engineers are retiring. These issues (and others) can’t wait for the magic wand of the IoT to make them all go away. And so we come to an obvious question for those who influence investments at the utility company:

“In times of real change, how do we choose solutions and capabilities to invest in that not only meet our needs now, but also create a foundation for our future business?”

In some cases, it’s not so difficult. It’s already easy to buy modern distribution network substations that will work efficiently and effectively in today’s energy network, but are also bristling with sensors and automation capabilities, ready for the day when the utility is able to utilise them in a true next generation Smart Grid deployment. So let’s consider another example, this time a bit further from what the average utility might consider ‘core business’: data & analytics. At the highest level, should an integrated data & analytics strategy – and solution design – be considered any differently to, say a strategy for future-proof transformers? I think not. Value today, value tomorrow too.

Last year, the Utility Analytics Institute published a maturity / value curve for utility analytics. The UAI felt the need to state in black & white on their diagram that “many utilities are moving along the foundation phase of the value curve”. In other words, for most utilities, there’s a great deal that could be done to deliver new value with some pretty simple data integration and analytics.

Right now, there are massive opportunities in integrating your asset data with your geospatial data; your customer interaction data with your smart meter data; your SAP data with…data that isn’t on SAP. Think of the business questions you could answer if you had a single view of your assets; your customers; your financial position. Other industries have been doing it for years.

But here’s a key point: what if, like the future-proof transformers, you could invest in a data & analytics platform that delivered those capabilities today, but would also be a key foundation for that future utility business we’re talking about? What if the platform you invest into support your smart meter rollout; facilitate your asset management practices; or reduce network losses could also be the one to integrate and analyseall the new data from the IoT too?

In that case, your networks businesses would be well placed to make operational decisions (automated or manually) based on a comprehensive understanding of interactions between IoT-enabled plant, Distributed Energy Resources (DERs) and real-time weather data. Your generation businesses could make strategic investment decisions supported by new insights into how IoT-enabled complex loads actually impact their forecasting models over time. Your customer-facing businesses could create and market entirely new services, guided by real information on how customers interact with their energy provider, their connected home, electric vehicle, their public transport options and more.

Gartner describe such a platform as a Logical Data Warehouse. Teradata brings it to life in our Unified Data Architecture (UDA). Many businesses – including your utilities peers – are already investing in the UDA. They’re delivering value today. But they’re also positioning themselves to cut through the hype and exploit the real value of the Internet of Things that’s just around the corner. It’s time you considered how you might be able to join them.

David Socha is Utilities Practice Manager at Teradata International. He works with local and account-focused teams to bring Teradata’s unrivalled data and analytics capabilities and knowledge to the International Utilities sector. Connect with David Socha on Linkedin.

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