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Technology Integration Presents Challenges
Posted on November 12, 2007
Posted By: W. Marie Zanavich
Topic: Information Technology
The biggest technology issue facing utilities today is the lack of compatibility and integration of information from the business or customer side of the utility with information from the operational side. Traditionally, past technology efforts of the last 30 years have focused on the back-office or financial/administrative systems and on customer information management including billing. That scene is changing with the rapid advent and availability of technology in the automation and computerization in electric system operations. Unfortunately, that technology was introduced into the utility without the recognized need for standards or process disciplines.
Technology first evident within electric operations was brought in via the back door by fairly sophisticated computer savvy individuals as tools to assist in a specific job. There was no real need to be concerned about compatibility issues or the ability to exchange or integrate information because these technology acquisitions were deemed “personal property belonging to the job or individual.” In truth, these first operational technology products were usually acquired and licensed by the individual at home and then brought into work.
With the advent of network connectivity throughout the enterprise, these products became more visible to the rest of the organization. Unrecognized and unsupported applications surfaced as a frequent cause of connectivity or compatibility issues both at the local workstation level and across the network. The end result is frequently a hard and fast ruling restricting all unauthorized software and/or hardware. It isn’t just a question of keeping it off the network; it can reside on a local workstation or laptop and still have a detrimental effect. If it’s thought that the tool is absolutely necessary to a job, the workstation or laptop is usually restricted from the enterprise network (including local area networks).
Staff resident in information technology accepts the processes and disciplines of change control, quality assurance testing, etc. as part of the normal job duties. Not necessarily so for technology on the operational side. Take a real life case of an electric utility upgrading to a new SCADA system: hardware, software, and network and security technology. No quality assurance program existed outside of the IT department. No DEV, QA, or PROD systems were in place to ensure adequate testing of any changes. Changes were made literally in real time to any one or all of the components. It was only when the CIO refused to sign off on the security of the SCADA system to ISO, that the need for a disciplined approach to changes was put in place. SCADA has always been the responsibility of the operational side of the house. The real issue is not where SCADA resides politically, but rather that the quality disciplines and standards must be in place to ensure the same level of integrity as the rest of technology within the company.
Challenges Now Company-wide
With the rapid industry escalation and dependency on technology designed for operations, the issue is no longer restricted to a single workstation and keeping the information off the network is no longer a valid solution. The more automated and dependent upon computerized technology the T&D systems become, the greater the need for integration at all levels. If left unaddressed, the lack of standards and compatibility issues will only worsen not to mention the inability to maintain and support incompatible systems.
The use of technology to improve productivity in the operations area and to improve the quality of information for the electric system overall is relatively new to the electric T&D industry. Focusing on a single area for the gains from the new technology is a common mistake. As an example, when unable to agree on a common scheduling system to be used for two different types of work order scheduling and dispatch, the end result was the implementation of two incompatible scheduling systems within one year. The same issue surfaced two years later when the same two operational divisions could not agree on using the AVL (automatic vehicle locater) already in use by one division. This time the CIO refused to approve the use of two systems. Through escalation procedures of a newly formed IT governance committee, the decision came down to go with one and only one AVL system at the enterprise level.
The focus of the IT Governance Committee at the enterprise level further ensures the integration of technology and, therefore, information no matter where it resides. The enterprise view supersedes an operational view, or even a T and/or D point of view. Enterprise integration has become the key to addressing and resolving these issues. The NERC - FERC CIP-002 – CIP-009 Standards further support the standardization and disciplines that were overlooked in the past. With potential fines looming in the near future of up to $1 million per day, the focus seems to have shifted to a more consolidated view at the enterprise level.
Standardization, disciplines of change management, production control and quality assurance along with a focus on compatibility and supportability at the enterprise level will bring about a change in how technical disciplines co-exist. The process seems draconian in nature to those who in the past adopted the use of operational technology without regard to any standardization, compatibility or integration. To have a joint discipline committee review and recommend approval or escalation to the governance committee for selection, acquisitions and implementation of all technology is relatively new in the utility industry.
Integration of energy/information technology is also forcing development of new roles, responsibilities and accountabilities. In the example of SCADA earlier, the CIO had no authority over the SCADA system; however, when it came time to sign off on the security of the system, it was quite apparent that the accountability was the CIO’s. This same CIO, after being called to task for allowing the acquisition and implementation of two different scheduling systems, established new processes and guidelines as well as redefined responsibilities.
The two disparate worlds of technology within the utility industry are coming closer together. There are still issues and personalities to be addressed; however, the recognition of the necessity is dawning on more than just the CIO’s of these companies. With the aging work force attrition rate, operational technology will be used more and more to supplement the knowledge and expertise where possible. It will be even more important to ensure the integration, standardization and rigorous disciplines of the technology industry be in place and enforced.
The “enterprise direction” should be the only one supported. Everything begins and ends with this view. The IT governance committee, and therefore the CIO, is charged with enforcing that viewpoint across all technologies. This will go a long way to ensuring the integration of all technologies and ultimately information which will finally provide a complete picture of the enterprise.
Authored By:
Ms. Zanavich has over 26 years experience in information technology primarily in the utility industry. She has significant experience in the private investor owned utilities as well as municipal government utilities. Ms. Zanavich also has a consulting background and has been a frequent presenter at conferences focusing on technology and utilities as well as strategic planning. Ms. Zanavich has recently retired as the Vice President and Chief Information Officer for
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Comments
November, 12 2007
Jose Antonio Vanderhorst-Silverio says
Instead of trying to integrate the grid and the retail sides of the utilities, CIOs should take the results of an essential system analysis that supports the EWPC market architecture and design breakthrough paradigm shift of the power industry.
Disintegrating the Grid and Retail Worlds
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
Copyright © 2007 José Antonio Vanderhorst-Silverio. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from José Antonio Vanderhorst-Silverio. Please write to javs@ieee.org to contact the author for any kind of engagement.
W. Marie Zanavich, Vice President Information Technology / CIO, Retired, has produced a very interesting piece of work to support the integration of the grid and retail sides of the utilities, based on the cumulative learning of the past 30 years in standards and process disciplines of the IT business. She concludes that “the ‘enterprise direction’ [of the CIO] should be the only one supported.”
An alternative view of the article supports the need to restructure the power industry under the EWPC market architecture and design paradigm, as can be seen in Disruptive Technologies Convergence. With EWPC most of the technology integration present challenges identified in the article disappear. By performing an essential systems analysis, to find out the real information system requirements of the power industry, I came up with the Synthesis Proposal Agreement of EWPC.
The biggest technology (compatibility and integration) issue originates in an intuitive and mistaken restructuring that separates transmission from distribution and that keeps distribution together with the retail operation in the utilities. Restructuring is in essence an information technology event, in which there are great efficiency opportunities on the customer side of the business, arising from the great reduction in transaction costs with the introduction of innovative business models to take the power industry out of the NO PROFIT ZONE, as explained in Let EWPC Come to Fruition.
In addition, serious difficulties on the integration of the grid with retail were explained in the article The Anti-System Utility. The problem is that the distribution side of the grid has been used to keep the retail side of the enterprise as a monopoly or as a powerful incumbent retailer. Those powerful retailers obstructs competition, as is the recent case of Ohio’s plan for re-regulation, as explained in the A New Mistaken Experiment and that are to be resolved with “Let the Market Decide” in Ohio.
November, 12 2007
Jose Antonio Vanderhorst-Silverio says
Disintegrating the Grid and Retail Worlds . . . continued . . .
Unlike the grid and retail side of the utility under transmission access, the integrated transmission and distribution grid, which is kept together under EWPC, has the same transportation function and the same culture under the same roof. That is why I also wrote the EWPC article Solving Smart Grid Cost Recovery to solve the difficulty that regulators have to approve AMI investment. I said above that most of the problems disappear, thinking of the great information technology challenges of implementing the smart grid.
Retail competition at the federal or global level, under prudential regulations, with Second Generation Retailer - 2GR developing business model innovations, will result in Retailers Enterprise Solutions as explained in Positive Returns under EWPC. AMI investments then will no longer be bets of regulators, but risks taken by 2GRs under competition.
November, 13 2007
Jose Antonio Vanderhorst-Silverio says
An affordable model for retailers’ enterprise solutions business model innovations, based on Free Open Source Solutions, is reported by Bill Opalka at Knowledge 2007. The model suggests how the electric industry can become an intelligent enterprise. SAP American, IBM and Oracle Utilities shared their incumbent visions, with IBM's seeming to be closer to the EWPC.
K2007 Retailers’ Enterprise Solutions
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
Copyright © 2007 José Antonio Vanderhorst-Silverio. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from José Antonio Vanderhorst-Silverio. Please write to javs@ieee.org to contact the author for any kind of engagement.
Bill Opalka added two posts in www.energyblogs.com. The first is Knowledge 2007 Underway (please hit the link on the left and below to read the details).
In brief: At first glance, an upstart airline and a century-old electric utility might not seem to have much in common. Not so says the Chief Information Officer of Virgin America Airlines, who kicked off Knowledge 2007 this morning. Bill Maguire explained how IT for an airline barely 10 weeks in the sky, created by larger-than-life British entrepreneur and adventurer Richard Branson, and a utility striving to become an Intelligent Enterprise aren't all that different.While the airlines deregulated kind of successfully, the electric industry’s barriers to innovation need to be taken down first. It is only after the introduction of the EWPC market architecture and design breakthrough paradigm that the conclusions of Mr. Branson would make sense.
And the key driver in Virgin's technology is reliance on Free Open Source Solutions. FOSS provides much of the company's software and e-commerce solutions. It's very low-risk to the business, cuts costs and helps reduce head count, all major concerns of the CIO, Maguire says. Virgin, with relationships with outside partners in customer service and other functions, has an IT staff of 17, where a similar enterprise might be expected to have 100 people. Another real-world cost benefit -- its e-commerce site cost $700,000, when a similar operation might be expected to run $3.5 million to $5 million.
FOSS is the “start up” key element for the airline business model innovation that is trying to compete with enterprise solutions of the Three Giants on the Stage (Bill’s second post).
In brief: It's not often that SAP American, IBM and Oracle Utilities share the same podium, but they were all present at K2007 to give their respective visions on Enterprise Solutions -- Perspectives from the Market Leaders during the first afternoon of the conference.
November, 13 2007
Jose Antonio Vanderhorst-Silverio says
K2007 Retailers Enterprise Solutions . . . continued
In addition, IBM seems to be closer to a non-utility or customer oriented statement as follows:
Gerry Metzler, a partner in IBM Global Business Services, expects the electric utility market moving over the next 10 years from the "passive persistence" model currently in vogue, to a "participatory network" in which the customer is involved in the decision-making, becoming the trailblazer in determining energy consumption. One question that remains to be answered is if the changes will derive from operational concerns or customer decisions. But there will be massive capital expenditures, whcih the industry's perceived slow pace in decision-making, as opposed to say, telecom, may provide some benefit.I claim that the shift from “passive persistence” to “participatory network” is nothing more than the paradigm shift from the slow pace vertically integrated utility to the competitive innovators that will develop The Sixth Disruptive Technology of EWPC. EWPC aims to both operational concerns and customer decisions.
Please read the two related articles on business model innovations enterprise solutions needs.
Let the Innovations Locate the Smarts (a comment to Oracle’s strategy).
In brief: An effective smart metering system should develop under competition of business models for several market segments of the power industry. Innovations should be the jury.Disintegrating the Grid and Retail Worlds (a comment to a retired CIO's article).
In brief: Instead of trying to integrate the grid and the retail sides of the utilities, CIOs should take the results of an essential system analysis that supports the EWPC market architecture and design breakthrough paradigm shift of the power industry.
November, 20 2007
Len Gould says
Jose Antonio: "In brief: An effective smart metering system should develop under competition of business models for several market segments of the power industry. Innovations should be the jury."
Could you please provide an analysis of what incentives might be provided under EWPC for your 2GR retailers to make the investment in smart metering? As I can find no financial incentives in your design for either retailer or customer, I'm curious about why you think any retailer might make such an investment.
November, 20 2007
Jose Antonio Vanderhorst-Silverio says
Dear Mr. Gould,
Had you hit the link, you would have seen "Such market competition can be developed, in several market segments, among retail side of utilities by expanding their actions from state level to federal level in the U.S. and from country level to EU level in Europe." What better incentives than a piece of the federal retail market of the U.S., Europe, or maybe the global market. What better incentive for customers, than to be able to choose a customer oriented service plan that meets their need for low cost and/or high value added under competition.
By the way, thank you again for the one crucial question that led to the article Increased Sense of Urgency of EWPC (please hit the link to read it).
Best regards,
José Antonio Vanderhorst-Silverio, Ph.D.
November, 21 2007
Len Gould says
Jose: "What better incentives than a piece of the federal retail market of the U.S., "
So it is your theory that a new 2GR retailer in Georgia can be incented to install e.g. $100,000,000 worth of demand management equipment on their 2 million customer subset of all the 5 million customers in Georgia, by offering that retailer contracts to supply power to all the federal buildings in Georgia? Is it then your proposition that the other 3 million customers should simply be ignored, and be served by 1GR retailers?
Wouldn't it be more efficient economically, and more transparent, to simply provide an explicit federal subsidy in the amount required, and let the retailers compete fairly to supply the federal buildings?
November, 22 2007
Jose Antonio Vanderhorst-Silverio says
Repeating... "Such market competition can be developed, in several market segments, among retail side of utilities by expanding their actions from state level to federal level in the U.S. and from country level to EU level in Europe."
Federal means all of the retail customers of the whole U.S. not the federal buildings.
November, 22 2007
Jose Antonio Vanderhorst-Silverio says
Dear Mr. Gould,
Before answering any more of your questions, I will pause to see if I get any answers to the article Does EWPC have a “Bystander Problem”? Please wait!
Best regards,
José Antonio Vanderhorst-Silverio, Ph.D. Systemic Consultant
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