The COVID-19 pandemic has underscored our need for a reliable energy supply, which is something we typically take for granted. Today, utilities must respond to rapidly changing demand profiles caused by stay-at-home orders. The good news is they are well-prepared and experienced in dealing with severe situations and doing everything it takes to maintain or restore the energy supply as fast as possible. As utilities continue to rise to this latest challenge, I thank them for their tireless and dedicated efforts in keeping our lights, gas and water on.
As we continue the journey toward the “electrification of everything” and deploying new energy resources and micro grids to increase efficiency, we are reminded during this crisis that we must do so while preserving our energy reliability—our communities are counting on it.
Like other traditional industries, utilities face many legacy constraints. A large established base of assets is a clear competitive advantage, but also can contribute to a lack of agility. This is especially problematic versus the digital natives that are threatening parts of the value chain previously immune to competition.
Competing successfully requires both operational excellence in managing the valuable legacy business and faster delivery of new and profitable revenue streams for the energy transition. In my previous blog, I explored solutions to data challenges in supporting the future grid. In this blog, I share ways to overcome barriers to change and agility, including legacy IT constraints.
Overcoming barriers to change
Most utilities recognize the need to improve business agility, which requires rethinking and even reinventing organizational structures in addition to technology. Yet, changing an entire organization, its work processes and systems is very costly and can pose significant risk to the stability of existing operations.
For our 2019 CGI Client Global Insights, utilities executives say their most important IT priority is modernizing IT to increase agility and reduce costs. While 92% of these executives report they have a digital strategy in place, only 11% say those strategies are producing results. At the same time, culture change, data management and legacy constraints are cited as the primary challenges to achieving their digital strategies.
Source: 2019 CGI Client Global Insights for the utilities industry
Yet some companies are producing better results from their digital strategies.
What are digital leaders doing differently?
CGI has identified several common attributes, presented in our white paper, “Improving business agility in unprecedented times” and summarized here:
- Leaders are more agile: Organizations that are outperforming and delivering results invest heavily in innovation management and business agility. As a result, they are in a better position to respond, rebound and reinvent in the face of significant economic, market and business changes.
- Leaders pivot effectively: Our insights demonstrate that leading organizations proactively pivot in response to market signals.
- Leaders manage human connections: Overcoming challenges to cultural change requires a clear “corporate purpose” and a solid culture. Connections at all levels (with customers, between business and IT, and between different business units and among employees) drive alignment on purpose and strategy, efficiency, innovation and, ultimately, change.
What utilities leaders can learn from retail banking successes
Industries such as banking also are experiencing significant disruption. In response, they are developing digital strategies that enhance the customer experience. A CGI-sponsored webinar shares what utilities leaders can learn from retail banking’s successes. Watch the webinar recording to learn more.
Improving IT agility while maintaining stability
Speed is a two-edged sword, with rapid market transformation on one side and the slow evolution of legacy organizations on the other. A number of companies use two-speed IT models that take an agile approach for faster-speed digital initiatives, and a traditional approach for slower-speed ongoing IT operations. However, these companies often encounter challenges when they try to integrate their new digital efforts with their legacy systems and databases.
Companies that modernize their legacy applications are able to achieve superior results. But for utilities with complex legacy environments, such efforts can be costly, time consuming and high risk.
So, how can we modify the two-speed model to deliver successful outcomes without making wholesale changes to legacy applications?
Most new value propositions for the energy transition require access to operational quality network data. Unfortunately, this data exists in silos across multiple systems (e.g., GIS, EAM, DMS, etc.). As a result, getting a holistic view of the network requires complex integration and data alignment.
To solve this challenge, CGI collaborated with several utility network operators to develop an integration strategy that achieves a single view of the network and its associated data by using an integrated network model and integration layer. This is the foundation of our CGI OpenGrid360 solution suite. It allows new applications to access the data they need without the costly and invasive process of integrating with each of the underlying systems. This contrasts with data lakes that are useful for analytics, but do not resolve the underlying data challenges.
Responding, rebounding and reinventing for the future
With intense competition, unknown impacts of the pandemic and uncertain future regulatory changes, it is unclear what new services and applications utilities will be providing in 10 years. What is clear, however, is that the industry leaders will be those who rethink their organizational structure to increase the speed of change while ensuring operational stability for energy reliability.
As utilities respond to the urgent challenges at hand, support the rebound that will occur at different paces in different industries, and move to reinvent for the future, my CGI colleagues and I look forward to collaborating with them in these endeavors. I also want to conclude with further thanks to the utility workers on the frontline working relentlessly to keep our energy supply reliable. Please stay safe and healthy.