Utility representatives and service providers from North America and South America gathered at the UTC Power Grid 4.0 Digitalization Forum on Oct. 16-18 to discuss and debate the changes occurring in the utility industry. Utility executives presented on topics that included the business drivers of digitization, the keys to success on the path to digitization, and considerations on how to secure your network and assets.
As technology evolves, the expectations of customers are changing with it. For utilities, customers are those who use their service and the workforce that helps build and maintain their infrastructure.
Customers today are looking for reliability, flexibility in how they interact with their utility, and the sustainability in the resources from which their power is provided.
Many utilities are already embarking on a digital transformation journey. This typically involves the virtualization of equipment to drive more data which can be translated into operational intelligence. The overarching goal is for the utility to operate a more controllable, reliable, and secure grid.
Executives are overcoming barriers to drive digitization by utilizing two specific strategies.
Executives believe that the evolution and access to technology is the easy part of digital transformation. They identified that the key challenge toward driving digitization is changing the culture within their respective organizations.
Digitization brings significant change to an organization and pits them at a crossroads. Utilities must be willing to innovate to address these changes without sacrificing the reliability of their current services.
A challenge for organizations is the management of their data. A considerable number of large organizations surveyed have visibility into 70% or less of their current inventory. Even when organizations can collect field and asset data, about 80% of their time is spent figuring out the correct information to use and cleansing it. That valuable time could have been spent deriving insights from the data.
Historically, there has not been much incentive to differentiate and compete in the utility landscape. However, with competition entering the market that allows customers to receive their energy in different ways, utilities must differentiate themselves and figure out how to bridge the value that they currently offer with what customers desire from their service providers.
When driving digital initiatives, stakeholders must remember the importance of unlocking value. Utilities need to ensure they are investing in solutions that will help them operate more efficiently, reliably, and securely. Simply investing in technology is not enough. Utilities have found that a key enabler to effectively driving digital is to centralize the part of the organization responsible for driving digital initiatives.
Some of the key actions include consolidating and centralizing the utility’s infrastructure, applications, and architecture to streamline the organization and make digital transformation more achievable. The organization should also perform job needs assessments across all departments to determine the productivity – and the need – of certain functions.
Leveraging successful ideas and offerings from other industries is also an aspect of driving digitization for utilities. One idea from the aerospace industry involves creating digital “clones” of assets in the field and storing them in a centralized database accessible by all groups within the organization. These clones are three-dimensional representations of assets and could be used as a single source of truth to help with maintenance, project scheduling, and analytics/reporting.
Change management is critical to transformation: Training for field technicians and support personnel must go beyond the classroom, cross-training between IT/OT helps each group understand priorities of the other, and detailed review of organizational impacts is vital.
Executives also discussed cybersecurity considerations when going down the path of digitization.
The digital world is just a virtualized version of the real world and should be treated and secured as such. A common physical security assumption is that a breach has already occurred, and organizations need to act as if there are already malicious actors present within their network.
Cybersecurity ultimately starts with each piece of software and hardware installed on the grid network and making sure that security is built-in rather than bolted on. The security of an organization’s network is only as strong as its weakest link.
Cyber governance is also vital to securing the digital organization. There are standards such as NERC-CIP that organizations can follow, but compliance alone does not equate to having proper cybersecurity governance.
Often the policies that exist within the utility are centered around IT. However, when dealing with the digital transformation of a utility, it is important to translate existing IT policies into something that the OT functions of the organization can understand and apply.
Digitization is happening at a rapid pace within the utility industry, and organizations need to look at and assess the benefits and risks of use cases. Utilities must also keep in mind that their goal of satisfying both the external and internal customers, with change management a key to ensuring change is adopted. Is your organization set up to handle digital transformation from a people, process, and technology perspective?
West Monroe Partners