Utilities using analytics to leverage the "data tsunami"
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"Tomorrow's utility executives will be analytics-driven," Mike Smith, vice president of Energy Central's Utility Analytics Institute, told attendees at last week's Utility Analytics Institute Summit 2012.
But many of today's utility executives are already heading quickly in that direction, as evidenced by two SAP-sponsored utility panels on the second day of the summit.
The first panel, the opening keynote session of the day, was moderated by SAP industry principal Lance Charlish, and featured Emily Ashworth, CIO of American Water; Gary Hayes, CIO and vice president of information technology for CenterPoint Energy; and Joseph Santamaria, CIO of United Illuminating. These three, and their utilities, are already using analytics to help them leverage their own "data tsunamis" to meet their particular business challenges.
Hayes, who joined CenterPoint in 2010 from TXU Energy, leads the information technology solutions and infrastructure across CenterPoint's electric transmission and distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines and field services operations (serving more than five million metered customers in six states).
Analytics, Hayes said, "Is not just tools, it's techniques. It's looking at a solutions architecture that allows you to hypothesize."
And change management is important, as well, he noted. "Big data is because of an event explosion. And all of that data has to be correlated, analyzed and made sense of." But in initiating data analysis projects within the utility, Hayes suggests the DVD approach: Define, Validate and Deliver. "You need to pick something you can win. (The project) needs to show something, and demonstrate the value," he said.
Ashworth noted processes within the enterprise also need to change. Otherwise, she said, "with new technology on top of old processes, you just end up with really, really expensive old processes."
The final panel of Day 2, a utility analytics best practices panel discussion, featured a stellar lineup of what moderator and SAP industry principal Linda Farinaccio called "unsung heroes-the team that works to build a solid foundation."
Five panelists -- Brad Bowness, director of business architecture and IT for Hydro One; Lloyd Tokerud, manager of analytics for First Choice Power; Stephen Hirsch, director of data quality for Consumers Energy Company; Dean Balog, director of enterprise applications for TransAlta; and Ron Grabyan, manager of business intelligence services for Southern California Edison -- talked about their experiences leveraging data analytics within their utilities.
Hydro One, one of the largest electricity delivery systems in North America, set up its information management program in 2008 with both short-term and long-term goals. Bowness detailed the process, which started with setting a strategy in the first year, establishing the foundation and going live with the program in 2009, stabilizing and enhancing it in 2010/2011, and starting 2012 with what he described as "continuous improvement."
"The two years of stabilizing is important," Bowness emphasized.
Hydro One's asset analytics initiative brought information from the OT side and correlated it with other data. Of the effort, Bowness advised, "A strong business team is critical. During the initial implementation, we had a key business team who lived and breathed it through the life cycle."
Enterprise information management (EIM) was discussed in many of the summit's panel sessions, and this one was no exception. Dean Balog (a self-described "data dude") discussed the three areas of focus of TransAlta's EIM: data governance, business intelligence and data architecture and modeling.
It's a work in progress: data governance launched the week before the summit, Balog said. "This year, the focus is on process, roles and responsibilities, and a focus on data quality," he explained. "We need to have people understand what data governance is, and their roles in it. That's the role of the pilots."
TransAlta already has some early data governance successes. Data is now a priority, directly from the CEO on down. As well, Balog said, "business is on board and motivated." With that, he also shared lessons learned: "Persistence is important-three to five false starts are normal," he said. "Look for small wins, and communicate success widely. Finally, external domain experts can help to explain the concepts."
First Choice Power formed a centralized analytics group a few years ago. The primary challenge, according to Tokerud, was the complexity of the data. First Choice's centralized analytics model promotes what Tokerud describes as "truth and consistence." Further, the centralized solution means education and training are reduced, and live data sessions with executives accelerate decisions.
"Our philosophy is, first, start big, and start in the middle with one thing that matters most," he said. "And," he added, to knowing chuckles from the audience, "speed, accuracy, scope: pick two, because you can't have all three."
The underpinning of Southern California Edison's analytics model, Grabyan said, is "enabling the business to get to the data to make their decisions. We've been doing continuous improvements all along, small changes. We want to make big changes." Part of those changes include migrating SCE's entire data warehouse into an environment that will allow analysts to get their data faster.
Finally, Consumers Energy's Stephen Hirsch discussed his utility's information quality program, which was launched in the mid-2000s as it began replacing a range of legacy systems with an enterprise-wide system. "The high-level goal of our project," he said, "is to enable customer experience value, to use customer data for competitive advantages, to facilitate safe and reliable actions and to help ensure consistent financial performance."
Next week, I will cover insights discussed at the UAI Summit about the future of analytics in utilities, and getting the maximum value from the data-to-analytics value chain.
Editor-in-chief, Intelligent Utility magazine