Yeah, I didn’t know what “desideratum” meant, either, but after looking it up I think this is really what the digital journey is for so many utilities; that is, ”something wanted or needed” according to dictionary.com.
If we agree that the digital utility journey is indeed “something wanted or needed,” why is this the case, especially today after we have this seen catch phrase used for 15+ years in different contexts? This is usually along a similar theme of moving historically analog/electro-mechanical business and technical functions into the digital realm at the utility. There are some common threads that one can pull to unravel why the digital utility is not only a goal, but is being realized across much of the industry today. We explore these below.
The Customer, Again. As the utility industry has moved into an era of both competition (in many different forms) and digitization, many or even most utility leaders have made pronouncements about “putting the customer at the center of all we do.” Being more customer-centric in an era of increased competition and digitization makes great sense. Customers are looking at all of the other services that they purchase and experience digitally in their day-to-day lives and expect the utility to do the same.
Do utility leaders agree with this sentiment? A recent study conducted by TMG Research suggests that they do…to a point. When asked to rank the different functional areas in their utility in terms of current digitization efforts, customer operations led the pack, followed by T & D. Similarly, when asked about what trends are driving the utility towards functioning more digitally, “customer requirements” was atop the ratings, along with a “need to keep up with new technologies,” which is also at least partially driven by customer requirements and expectations.
As the competitive landscape in the utility industry continues to shift, digital customer engagement will be de rigueur for utilities that want to continue to be a foundation for communities and economies to function optimally.
Culture. The old adage that “culture eats strategy for breakfast” applies here. Any organization, including a utility, that tries to deploy a digital strategy without considering the culture is in for a long, uphill battle. The TMG study referenced above also explores the cultural issue in relation to digitizing the utility.
Much of the cultural shift is happening as the workforce changes. As one utility leader interviewed for the study put it: “We are seeing a changing of the guard. New leadership is moving more aggressively to digital operations (via the younger management team).”
This “changing of the guard” is also evident across the utility workforce. The TMG study notes that over half of the responses indicate that the skill most lacking is in the data and analytics space, which is a direct result of the changing culture that is moving towards more data-based decision making.
One caveat in the utility digitization move is to tread lightly in the real-time operations area. I am reminded of a client meeting with a technology partner at a large investor-owned utility about three years ago. We were discussing “virtualizing” some of the functions on the operations side of the house, particularly those that are out on the grid edge, including the substations. When the discussion moved to the possibility of virtualizing the protection function in substations, the discussion came to an abrupt stop. The lesson here: utilities are moving towards digitization, but it is incremental and the reaction to any proposed changes in grid operations will be met with apotentially adverse reaction, and for good reason.
Sell, Sell, Sell! The internal sales effort towards digitization never really ends. Tying digital efforts to core business use cases and promoting the successes as well as the lessons learned are important if digitization across the enterprise is to take hold. The TMG study notes that the top two barriers to moving to digital operations are “Lack of a business case” and “Lack of interest in/knowledge about digital operations.” Both of these barriers scream out for the need to educate and ultimately sell the benefits of digital operations inside the walls of the utility.
The End of the Digital Road? As those 90s balladeers Boyz II Men sang, “Although we've come to the end of the road, Still I can't let go…” We can’t let go of our digital journey. There really is no end to the digital journey, and this is a good thing. Look at the massive smart grid/meter investments that utilities have made over the last 15 years. Use cases continue to evolve as utility leaders, operations staff, and technologists learn about new ways leverage this massive digital infrastructure. For example, in the near future, watch for utilities to use the smart meter as a key piece of the emerging energy markets puzzle at the distribution level.
So, what does the digital utility journey look like? It’s about putting the customer first, leading with a culture that embraces change, promoting both the successes and the lessons learned with new digital initiatives, and ensuring that the digital infrastructure is up to the coming challenges in the energy transition. Sounds like a classic case of desideratum.