Analytics from the executive perspective
- Posted on November 15, 2012
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Discussing analytics was almost as addicting for utility executives as the Hot Tamales candies put everywhere by Houston's funky Hotel ZaZa. For the 7th annual Knowledge Executive Summit, I got the opportunity to sit in on these analytics discussions, learn more about the utility executive view of analytics, and score all the Hot Tamales I could ever want. Here's what I heard:
That "analytics" isn't the whole picture. Analytics is a term you say and people perk up, much like the term smart grid did for folks a few years ago. However, as with smart grid, the definition of analytics can be vague. Executives discussed how analytics, however you define them, are really only part of the picture. Analytics are actually sandwiched between the complex events processing needed for analytics and the actionable insights that folks can take away from analytics.
And the actionable insights piece must be further developed at utility companies. Many IT executives expressed frustration that analytics, for the most part, meant folks looking at a report versus looking at data. One executive talked about his team spent a lot of time developing reports, so he would ask folks what they do with those reports. Their response? "Oh yeah, we glance at those." As this executive demonstrated, at this point, many utilities are not using the insights obtained from analytics to really drive their decisions.
Some utilities didn't feel that they were even at the point of being able to deal with analytics because they were still working on the foundation of good analytics: good data. One executive pointed out that, sure, you can do analytics today, but in his case you'd get great information about garbage. Like his company, many utilities are at the stage of data scrubbing and cleansing, and really just getting data in order.
The business and technology balance. Another analytics area that came up was the role of business and IT groups. There seemed to be agreement among the two groups that the business drives the analytics needs, and IT provides the technology and services to be enable those analytics. They also agreed that the ownership of data and data quality has to be on the business side, and that IT provides the guidance and controls, when needed, to help the business ensure data quality.
Of course, this is easier said than done. Both groups admitted that they hadn't been entirely successful in these endeavors. For example, the business-side folks pointed out how they often ask for too much from analytics to begin with. The business executives wanted to figure out how to better pace themselves with analytics, and figure out what analytics they really need to get started. It was clear that both groups needed to be open to more dialogue in order to develop achievable analytics goals and move forward the right analytics technologies.
The changing employee composition. Smart meters and the smart grid are reducing labor costs through the automation of traditionally manual processes, such as meter reading. However, as utilities reduce labor costs in some areas, automation and analytics are increasing employee expenses in others. Executives talked about the growing pains of hiring employees -- often times more expensive ones -- to manage their automated systems and analytics. In particular, utilities were struggling with the number of data scientists -- typically folks with PhD-levels of understanding about analyzing data -- to hire, and admitted that they probably couldn't afford to hire armies of them. Instead, executives were considering the possibility of hiring a few data scientists who could handle the more complicated analysis, and also manage and train other personnel to better leverage the more common analytics capabilities available at their companies.
Those are just a few of the analytics insights that executives shared at the Knowledge Executive Summit. Do you agree with the executive perspective on analytics? We'd love to hear from you. And please accept my sincere apology if I made you hungry for Hot Tamales, but they were pretty tasty.
As always, thanks for reading!
H. Christine Richards is the director of knowledge services for the Utility Analytics Institute, a division of Energy Central.
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