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Predictions: Asset intelligence a focus in 2021

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Mark  Damm's picture
Founder and CEO FuseForward

With over 30 years’ experience implementing and operating complex systems for critical infrastructure, FuseForward Founder and CEO Mark Damm is extremely well-versed in the identification of...

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  • Feb 8, 2021 11:20 pm GMT
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This item is part of the Special Issue - 2021-01 - State of the Industry, click here for more

According to the analysts at Kearney, the next ten years will be an era of fundamental change for the energy sector as more companies leverage digitization with the potential to increase long-term earnings by 25% or more. Energy and technology experts agree that technologies like the Internet of Things (IoT), advanced analytics, artificial intelligence, robotics, and automation are already elevating existing business models and creating new sources of value for utility companies. We can expect to see these trends continue in 2021.

While it seems to be accepted wisdom that utilities are well into their digital transformation journeys, recent Capgemini research found that the sector has underestimated the true potential of digital transformation initiatives, using intelligent automation as an example. In fact, nearly half of the respondents under-estimated the benefits they derived from their digital initiatives. This is no small oversight—researchers estimate that the sector can save between $237 billion to $813 billion from intelligent automation at scale.

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“Like their peers from other sectors, the energy and infrastructure sector is facing considerable headwinds when trying to scale their automation initiatives. Currently, only 15% have been able to deploy multiple use cases at scale,” they state.

In 2020, utilities were quick to embrace new digital solutions, with some making more progress towards digital transformation than they had for many years prior. I hope to see this trend continue in the coming year, and have identified a few foundational areas I believe will be areas of focus. By addressing these key areas, utilities will be setting the stage for truly transformative digital solutions in the future.

Trend 1: Tackling data silos

As mentioned, many utilities are missing out on implementing critical digital transformation use cases that can deliver outsized benefits. One of the reasons for this is that utilities are still dealing with enterprise architecture that inhibits rather than enables business transformation​. Challenges faced with existing infrastructure include poor system integration resulting in data silos, and the inability to ingest or store large amounts of streaming, real-time data​. Unfortunately, data is intricately linked to every aspect of the modern utility, and these challenges have a knock-on effect across all operations.

In 2021 we can expect many utilities to prioritize improvements in data management, with a strong focus on the reduction of data silos and the implementation of related technologies.

By reducing data silos, utilities will be able to focus on the strategic integration of assets and operations, using data analytics and intelligence to make the connections between actions or events in one place, and impacts in another.

Trend 2: Enhancing EAM systems

Enterprise Asset Management (EAM) is a technology-empowered method for organizing assets, improving efficiency, and maximizing your investments. When combined with rich sources of data, including streaming data from field devices, EAM systems can offer utilities a truly competitive edge.

For organizations looking to augment asset management with rich data sources, cloud-based models are best. However, many utilities still have their EAM system on-premise, with work orders remaining manual and on paper​. Security has always been a key driver for this, but with many utilities forced to move the majority of their operations online in the past year, there is now increased understanding that cloud systems can be implemented in a way that meets high-security needs.

With EAM systems in the cloud, utilities have the ability to integrate streaming data and advanced analytics, providing asset managers with granular insight into all areas of their operations. This insight goes further than merely optimizing maintenance cycles, and allows utilities to leverage new opportunities, such as automated control, machine learning, and even augmented reality solutions.

Regardless of where an organization is in its digital transformation journey, moving EAM to the cloud and augmenting this with additional data sources can deliver big benefits. I hope to see increased focus here in 2021.

Trend 3: Cybersecurity

Cybersecurity is always important and there is no doubt this will continue to be an area of focus in 2021. But while cybersecurity concerns were once a barrier to innovation, an increased need for remote operations means today’s utilities will need to tackle security issues head-on.

The increase of distributed network systems and edge devices requires additional security planning and design, and I believe we will an increased expansion of security as a result of this.

Setting the foundation for a digital future

With the right partner, utilities can integrate their complex, security-conscious EAM systems with other systems and data sources in the cloud. By focusing on these areas in the coming year, utilities will set a strong foundation for comprehensive advanced analytics and automation, creating a truly intelligent digital solution that provides the basis for a more efficient and future-proof organization.

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Matt Chester's picture
Matt Chester on Feb 9, 2021

In 2021 we can expect many utilities to prioritize improvements in data management, with a strong focus on the reduction of data silos and the implementation of related technologies.

Do you think this is going to have to come more from a leadership, top-down area, or are technical solutions going to make it easy and straightforward? 

Robert Brook's picture
Robert Brook on Feb 12, 2021

Just my 2 cents Matt but I think they are going to come from the tangible value that is offered. This would correlate with leadership as that is the level those types of decisions are made.

Mark  Damm's picture
Mark Damm on Feb 16, 2021

You always ask good questions Matt!

In this case, both options apply: Leadership and new technology both have a role to play.  

Rather than saying that technical solutions will make it easier, I would say that more utilities are finding themselves in a place where improved data management is more achievable. Technology such as cloud computing, remote operations systems and relevant cybersecurity systems are more commonplace than they were even ten years ago. I wouldn’t say this new technology makes it ‘easy and straightforward’, but it does set a stronger foundation for data management.

Robert Brook's picture
Robert Brook on Feb 12, 2021

Thanks for sharing Mark! There are a couple of thoughts I would like to add.

First, while we often see digital transformation as a technology, what is commonly overlooked is the role culture plays in transformation. Let’s use a digital drawing/content submission system as an example. In many cases the existing process is stacked with manual processes and paper materials and would appear ripe for immediate modernization. The implementation of a digital submission system like Data Gateway from 1Spatial can introduce efficiencies and break down a content stovepipe through automated distribution. This makes sense until you dig into it and look at the complexity associated with changing the cultural processes. It is re-enforced by a number of social perceptions, contractual arrangements like union agreements, and wide reaching proven processes (this we could debate) like manual validation using paper redlining. As a result, the evolution occurs at a slow pace which is needed to unwind what exists. Culture changes is something that cannot be underestimated and needs to be a focal point for any digital transformation is to be successful.

Second is the silver bullet syndrome. Many utilities have selected and implemented solutions that have the product as the end goal not a specific, measurable value offering. How many times have you seen an organization with multiple big data analytics solutions, that all came with a large price tag lol! It is hard to define these types of transformational projects as successful…and as a result the utility is hesitant to “do it again”. Digital transformation is an area where we have to strive to be results focused. To continue to prime the pump for digital evolution we have to do a better job of connecting transformational efforts with measurable, achievable metrics that move the needle on KPIs and reduce capital/expense spends. The more we do this…the more digital transformation efforts will move ahead.

Mark  Damm's picture
Mark Damm on Feb 16, 2021

Thanks Robert - well said, and thanks for your input.

Culture is key, you are right and can lead to a slow pace of transformation. A bit of a side note, but one thing that has been extremely interesting to me over the past year is how fast digital transformation initiatives have taken place during the pandemic. It's an eye opener that these kinds of projects can be done a lot more quickly than we realize if the situation is right—and I include culture is a part of that).

And yes, a results focus is important too.

Omar El-Batouty's picture
Omar El-Batouty on Feb 24, 2021

First, to the author Mark - Thank you for publishing this Op-Ed. I found one of the answers that I was looking for when you cited that only 15% of companies in the energy sector have scaled up operations with digital transformation as per a Capgemini study. I was curious if you could reference the exact report? Was it the 12th Publication for Digital Transformation Review? I'd like to get my hands on it. 

Next, to Robert's point. That is exactly right. Culture change and post sales are probably some of the most important, and sometimes overlooked, steps of the digital transformation. Often times, it's not that the product didn't work, but as you stated there were no clear goals or objectives as to what a particular product can do for them. And even if it were, the technology vendor/supplier/consultant needs to be continuously educating, collecting results data, and validating the POV, Proof of Value. 

 

One question I have is related to what Matt and Robert commented on earlier.

Is there something that, during the Post Covid-19 economy, has become a repeatable pattern of success when it comes to engaging those companies that need it the most but are hesitant due to budget restraints or policy uncertainty?

I am a member of a 20+ year old international company that's making its way into commercializing here in North America (primarily the US Market) and we are finding it difficult to find a repeatable pattern of engaging with the right stakeholders. All marketing reports, case studies, consulting firms point to prospecting exec-level leadership. But with so many comparable solutions in the market and case studies that prove each company and solution is the right one for the value brought and the right ROI numbers. 

Robert Brook's picture
Robert Brook on Feb 24, 2021

Hi Omar...I understand your situation! Here is the bad news. Personally, I think traditional pattern/template sales processes only work in areas where limited competition exists. That isn’t DT. If your pattern is flexibility that might work 

There are a number of reasons for this but here are a couple of prominent ones. While common industry issues exist, every utility is at a different stage in their evolution, have different products and solutions, different financial situations, different perspectives, different history etc. They don’t necessarily fit a pattern. Second, as you identified, every executive is inundated with potential offerings so they have built gates and the same story/pattern isn’t a key to it. Lastly, everyone has reusable supporting collateral, use cases etc which often are part of the meat of a pattern. I could go on for days but you already get these points.

In my experience, to be successfully your sales process have to vary between engagement. Here are a few ideas to help with that.

  • Good salespeople don’t reuse the same playbook. They challenge what executives feel they know and reframe the problem to create differentiation. That means “Consultative selling within a Challenger framework”.
  • They also “personality type” to enabling decision makers and give them what THEY specifically need to make a decision not what you think they need. This could be different in every situation according to type- expressive, analytical etc, and role- decision maker, influencer…..
  • Reference customers are critical because they aren’t selling or vested in your success. They provide an unbiased, relatable experience and set expectation…but they have to align with the specific prospect so you can’t keep using the same one.
  • Lastly, you need to be a partner so engage personally, help and show honesty. They want someone in their corner who they trust. Trust aligns with personality type so while there are basic principles to this it has to be adaptable.

Just my two cents….I hope something in there helps!

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