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New Era of Utility Managed Services

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Over the last two decades, utilities have been pressed to modernize information technology (IT) at a growing pace. Circa 2000, when we started down the path of modernization and wanted a mainframe, networks and PCs, our only choice was to:

  • Go through a cumbersome procurement and implementation process;
  • Build an organization to support our systems; and
  • Host, manage and upgrade them inhouse.

This has been such a heavy lift for utilities that there hasn’t been much time to look up, see where the industry is heading, and put plans in place to move steadily in the same direction.

Where does this leave us today?

As an industry, we are coming face-to-face with the fact that we did not:

  • Take Moore’s Law into account—that computing technology basically doubles every two years—and factor that into our decisions and forecasts;
  • Realize the incredible benefits of the internet and that connectivity would require an entirely new department, Cybersecurity, that would report to the CFO or CIO through risk management;
  • Know that the increasing complexity of systems and networks would eventually create a scenario where IT management would become so resource-intensive and fast-moving that we wouldn’t be able to keep up, and
  • Understand that technology needs will keep growing, so new opportunities embrace them should be at the forefront.

While this sounds like a lot of “did nots”, the good news is that someone did.

Giving SaaS Solutions the Shoutout they Deserve

We’re halfway into 2020, and while a lot of things the Jetsons or Blade Runner promised haven’t transpired, a lot has thanks to Cloud Computing’s Software-as-a-Service (SaaS). Take Blade Runner’s Replicants or George Jetson’s maid-robot, Rosie. Harnessing the computing power into a robot brain to provide a truly sentient experience is possible today because of the SaaS.

There has been enough education in recent years that nearly all utility professionals know what SaaS is and why it’s valuable. As a result, many are now traveling down the path of a Cloud-first, IT transformation strategy which includes creating roadmaps for moving systems of innovation, differentiation, and record to an SaaS environment whereby there is an external connection (via the internet) to computing resources accessed.

It allows you to access them as if they were in your home or building with full support from a remote computer administrator, database administrator, network administrator and a huge IT team. Like system capacity, these resources can be scaled up and down as needed, and you only pay for what you use. For example, we’re no longer limited to building to capacity and we don’t have to budget for large batch processes.  We’re only tied to capabilities, which we as a business define.

The Case for (SaaS) Managed Services

Because Cloud hosting shifts IT responsibilities to a Cloud provider, the question utilities are asking is if they still need a Managed Services provider to maintain and upgrade their applications, especially their systems of record like the Customer Information System (CIS) and Meter Data Management System (MDM).

Let me be the first to admit that at first blush this sounds like someone using your watch to tell you the time. But in the age of Cloud computing, utilities partnering with a Managed Services provider—with deep SaaS expertise—can offload the entire ecosystem of IT system management and continuous, system improvement activities to third-party experts.

The table below gives examples of what is typically handled by SaaS Providers versus Managed Services Providers:

Cloud Provider Roles

Managed Services Provider Roles

  • Ensuring network connectivity
  • Managing data security including malicious software and virus solutions
  • Conducting backups, disaster recovery and business continuity
  • Implementing upgrades and patches

 

  • Guiding utility-specific IT strategy and growth management
  • Conducting business impact analysis
  • Implementing new rates
  • Proactively watching for changes or updates, and communicating and/or training on those changes
  • Advising the utility on what capabilities are available, and how to achieve the most benefit
  • Being the middleman between the big SaaS provider and the business, using knowledge of the business and the provider to seamlessly weave a complete offering

 

 

SaaS + Managed Services: A Case Study Perspective

Here is a case study for using SaaS and Managed Services simultaneously. “UtilCo” has a need to change rates and calculations because, after a very lengthy battle, it was finally able to close a rate case and now needs to put the new rates in place. “Joan”, a project manager, has been put in charge of the changes necessary to facilitate this in UtilCo’s systems.

In the old world, Joan and other internal folks would have been responsible for:

  • Planning and hosting team meetings;
  • Identifying necessary changes;
  • Allocating the right, internal resources to make the changes;
  • Developing and Managing the project plan;
  • Developing a plan to support the systems involved to meet organizational SLAs; and
  • Meeting the deadlines and ultimately going live.

Because Joan has a trusted, third-party Managed Services provider—folks who do similar rate changes for utility companies around the country—she sends them a description of the rates.

What she has come to expect from her provider is an open line of communication to share her needs and receive a timeline with commitments through timely and transparent communications. And, because they are genuinely a partner, they knew this request was coming and have worked behind the scenes to make sure Joan’s request will be delivered on time with no hiccups.

In the background, Joan’s SaaS Provider is ensuring that the platform is running seamlessly. Their data recovery operation is replicating and sending data to multiple locations around the country, and their hundreds of cybersecurity staff are constantly monitoring taking actions to make sure the utility’s data is secure. No input from Joan or the utility is necessary; it’s just part of the service. What used to require interaction and planning, budgeting and procurement, and HR and hiring is handled automatically as a commodity.

Does this mean that Joan has solutioned herself and her team into joblessness? Hardly. Joan now has time to “look up”, as mentioned earlier, and put transformation plans in place to keep pace with the industry’s direction.

Get Ready; Get Set; The Art of the Possible is Around the Corner

When people talk about the benefits of SaaS today, a lot of focus is placed on the significant reduction of spend on core systems. While this is true, you’re cutting yourself short if that’s your only expectation. The future is yet to be written.

Reflecting back on the Jetson’s robot-maid, Rosie, we’ve got something “similar” to her brain in the form of cloud-hosted systems like Amazon’s Alexa. Alexa sends your questions up to the Cloud, processes them and answers them via an artificial voice with real-time immediacy. But between the time that Rosie was conceptualized (in the early 60’s) and Alexa was introduced (in 2014), “Rosie” has been upgraded in several ways, including morphing from a clunky piece of metal to a small, sleek countertop device.

Ongoing technology advancements—what I’m calling the “art of the possible”—is what we see with all innovative technologies. Moving Systems of Record to a true SaaS environment, with a Managed Services provider, industry-specific actions will be no exception. To that point, there’s no reason we can’t start working towards generating a customer’s bill with the same ease as Alexa answers questions. “Alexa, please generate a bill for premise 2782738.”

  “Here’s your bill for premise 2782738.”

 “Thanks, Alexa.”

Michael Cocroft's picture

Thank Michael for the Post!

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Discussions

Matt Chester's picture
Matt Chester on May 28, 2020 11:55 am GMT

To that point, there’s no reason we can’t start working towards generating a customer’s bill with the same ease as Alexa answers questions. “Alexa, please generate a bill for premise 2782738.”

  “Here’s your bill for premise 2782738.”

That might even be thinking too small! I want Alexa to change colors if I've been using more power than usual in a given day. I want her to suggest that my water heater seems to be using excess energy and I might want to think about getting it looked at or replacing it with a new model. And if I replace with a new model, maybe she has a suggestion for a particularly efficient one that my utility has an active rebate for? These are are right at our fingertips-- it's just about putting it all together. And like you said, I think we're on the precipice of this new era that will take it from 'technnically possible' to 'seamlessly integrated'-- I just hope utilities are leading that charge

Bob Meinetz's picture
Bob Meinetz on Jun 2, 2020 2:22 pm GMT

Matt, many who are concerned about energy and climate change are less excited about allowing one of the world's largest corporations - Amazon, Inc. - to record everything they say in their living rooms.

You do realize Alexa is "listening" to - and recording - everything you say, whether or not you request "her" attention, don't you? That what you say - from the moment you say it onward - is completely out of your control?

"These are are right at our fingertips-- it's just about putting it all together."

As a production management systems developer for industry, I'm aghast at the freedom with which clients offer private information, both intentionally and un-intentionally, in trade for a trivial convenience. With that little cylinder on your desktop or end table, Alexa is not your assistant - you are hers.

Some perspective: you wouldn't share the passwords of your bank or investment accounts with a stranger, would you? If you forget one, and your significant other calls it out from another room in your home, you already are.

https://www.eff.org/deeplinks/2019/12/2019-end-year-review-smart-home-tech-police-and-your-privacy

Michael Cocroft's picture
Michael Cocroft on Jun 3, 2020 1:43 pm GMT

Bob,

Unfortunately the privacy horse is out of the barn. We all agreed to that when we started using cell phones and installing apps on those phones. Do I believe that Amazon will use any data they collect, intentionally or unintentionally, in a malicious manner? No. Am I doing anything in my home that I'm worried someone would find out? No. Am I ok with the authorities using Ring doorbell video to better police neighborhoods and provide an additional layer of protection to neighborhoods that need it? No. Is it a wonderful thing that we can expect less and less privacy, as a side effect to new technology? No.

As it turns out, I'm also CEO of a digital forensics and incident response platform called IRHound (http://www.IRHound.io) , so I know that taking the circuitous route to try and locate someones personal info in a sea of data at Amazon isn't any route that black hats have any interest in. Why would they when all they have to do is send an email or text and get whatever info they want? When they can pose as a princess whose lost their kingdom and needs an account to hide money?

It's my job to make sure I make it as hard as possible to gain access to my top secret info. All of my accounts have multi-factor authentication setup, at least two and sometimes three if that's an option. It's just where we are.

And the Alexa reference is just a way to tie it in to everyday life, since most people are familiar with how it works. Just like how customer service bots have reached broad acceptance, I believe voice interaction, Alexa based or not, is a foregone conclusion. And the best part of it is utilities don't have to build it or maintain it. Just use it as a service.

Bob Meinetz's picture
Bob Meinetz on Jun 2, 2020 3:15 pm GMT

"To that point, there’s no reason we can’t start working towards generating a customer’s bill with the same ease as Alexa answers questions. Alexa, please generate a bill for premise 2782738.'"

Michael, there are lots of reasons why we shouldn't "start working towards generating a customer's bill with the same ease as Alexa answers questions."

Let's step aside from utility electricity, for a moment, and look at SaaS products purchased in the private sector. After an initial investment, SaaS allows vendors to decide what customers' purchases are worth by forcing them to make followup monthly payments. A customer is at the vendor's mercy, not only to provide upgrades to their product, but for it to work at all.

Many users don't understand the implications of this business paradigm. For example, Adobe Photoshop can no longer be "bought" - graphic designers must rent it, in monthly payments. If an advertising agency produces a multi-$million campaign on Photoshop,  then Adobe decides the app is worth $5,000/month to industrial clients, the agency will have to pay it - or lose access to thousands of hours of work its graphics department has already invested in the campaign.

Fortunately there are alternatives. With Affinity's Photo and Designer apps offering capabilities on par with Photoshop and Illustrator for one payment of $45/each, the only value Adobe offers customers now is allowing them to continue to open previously-created documents they foolishly thought were "theirs". 

With no choice for utility electricity customers, many will view SaaS "added value" apps as merely an opportunity to charge them for something the utility should be offering as part of its electricity service.

Michael Cocroft's picture
Michael Cocroft on Jun 3, 2020 12:42 pm GMT

Bob,
It's about perspective. Your Adobe example is a good one for me in particular, as after college I was a 2D and 3D designer. I started on the very first version of Photoshop and kept updating until I was out of design and into IT. I couldn't afford it, and updating every year was tedious. I also couldn't keep my hardware up to snuff to take adavntage of the new features.

Flash forward to today and the complete Adobe Suite is available via the cloud. For what equates to $1.64/day, I have complete access to all of the apps, many of which are an industry unto themselves. Updates are automatic, and the products are stronger than they ever have been. My files are copied locally and to the Adobe cloud for backup. I can share my files with a team, work interactively and know that everyone I'm interacting with speaks the same Adobe language. I do not know a single professional designer, photographer or video editor that isn't working with the Adobe toolset. It's a standard that I don't see changing any time soon.

So yes, the Affinity tools, and many others are great but their key feature is the ability to export to the latest version of Adobe. Sort of like WordPerfect and Microsoft Word, remember WordPerfect?

Even if I'm just a design hobbiest now, I have access to the entire Adobe, and also Autodesk suites and I couldn't be happier. I can install or uninstall apps as I see fit, and both companies state that if they suddenly stop supporting a product I will get an installable of the last version. I have access to cloud storage and I also have a skillset that in some unforeseen circumstance could be dropped on a resume and get me a job. As far as the holding hostage, I have no experience nor do any of my still designing former coworkers. I'd be interested to see some documentation on this scenario.

In my mind it all boils down to what my focus is. And back to utilities, I think utilities should focus on what their actual role is, and I'm pretty sure that role isn't an IT organization that just happens to provide utility services.

 

 

 

 

Bob Meinetz's picture
Bob Meinetz on Jun 4, 2020 6:41 pm GMT

Michael, I agree - security it is a matter of perspective. For me, to upload my material to Adobe's "cloud", and surrender any protection against it being mined for information or intellectual property by anyone at Adobe, or with whomever they choose to share it, is not a sacrifice I'm willing to make.

Me, I'm a web developer who does professional design on a daily basis, and for all I care Adobe can go to hell (now you know a single developer - I know many). Who cares if I can't export to the latest version of Adobe? It's not as standard as you might think.

"I'd be interested to see some documentation on this scenario [of being held hostage]..."

That's easy, it's in your Adobe User Agreement, which clearly states you'll no longer have access to documents you've created with Adobe products if you fail to make monthly payments to the firm. And whether you find Adobe's Terms of Use satsifactory now or not, you have no recourse if they change them - in perpetuity.

Some feel comfortable trusting thousands of people they've never met with availability to their hard work, that the corresponding sacrifice in security is worth some trivial conveniences. It's just not the perspective I've gained from decades of experience in software and web development.

Re: the "actual role" of utilities:

"..I'm pretty sure that role isn't an IT organization that just happens to provide utility services."

Me too. Are you equally sure your utility isn't an energy services organization that's also just happens to be a data provider, or might someday become one? After all, data is the new commodity in the global economy, and it would foolish for a company limited by strict regulation of energy prices to forego such a potentially-valuable opportunity.

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