Getting smarter every day
Traditionally, utilities have been very poor at capturing and leveraging institutional knowledge. This is because they have operated in "silos" without business practices and technology that would facilitate the sharing of information. Most utilities have recognized the disadvantages of those practices, especially in the intelligent utility/smart grid environment, and are working to change them. This drive for change is making utilities confront the painful truth about how far behind they really are when it comes to business intelligence.
In many parts of the country it is still quite common for the utility company to be among the last to know when there is an outage on their own distribution system. For an industry that has been around for approximately one century this could be viewed as nearly inexcusable. But, to be fair, this is not a result of utilities being lazy or uncaring; rather, it is a result of how they have evolved through time, what regulators and consumers have demanded and what utilities have been able to invest in vis-à-vis their rate structure. In short, technologies that promote a better understanding of their business have never been as important to utilities as they are now.
Last year, Sierra Energy Group, a division of Energy Central, surveyed utilities about very basic business intelligence and the results were informative. Investor-owned utilities (IOUs), municipals and co-operatives were asked: how close is your utility to being able to provide real-time, collated information about the operation of the grid and the enterprise to the executive suite? On a scale from one to five, with five representing the highest, the results were: 2.6 for IOUs, 2.3 for municipals, and 1.8 for co-operatives. So IOUs, municipals and co-operatives each recognized that they have a long way to go before they can offer real-time information about the operation of the grid to their executive suite -- much less their customers.
It doesn’t get any better when we look at general business intelligence. The same IOUs, municipals and co-operatives were asked: how effectively does your utility use business intelligence to make informed business decisions? On a scale from one to five, the results were: 2.8 for IOUs, 2.4 for municipals, and 2.6 for co-operatives. When it comes to using intelligence about their own business to make informed decisions, respondents recognized that they have a long way to go in this area as well. These results, of course, leave us wondering what information they do use to make decisions about their business.
But, enterprise-wide business intelligence is clearly becoming more important to utilities. The same survey mentioned above also asked respondents about their plans related to development of an intelligent utility enterprise. About 80 percent of IOUs and co-operatives and 65 percent of municipals indicated that they had such a plan. Additionally, nearly all of the CIOs we talk with are engaged in some manner with projects that will help improve enterprise intelligence, which indicates that the intelligent utility enterprise plan includes increased business intelligence.
We are currently conducting additional surveys around this topic and will summarize those results in future articles. For now, though, it looks like utilities have recognized that increased business intelligence is necessary and are working toward it.
I enjoy discussing industry issues with you. Please feel free to share your thoughts in the comments section, or reach me directly at bthielbar@energycentral.com
