New Era of Utility Managed Services

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:

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.”