Analytics Can Open New Opportunities for Utilities

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Analytics Can Open New Opportunities for Utilities

Utilities that overcome the obstacles and make effective use of analytics can put themselves on the path towards comprehensive transformation that improves business performance across the board. Big Data from smart meters and sensors, substations and other assets is already supporting operations-level improvements, but utilities can achieve more by leveraging data and analytics for top-line […]

Utilities that overcome the obstacles and make effective use of analytics can put themselves on the path towards comprehensive transformation that improves business performance across the board.

Big Data from smart meters and sensors, substations and other assets is already supporting operations-level improvements, but utilities can achieve more by leveraging data and analytics for top-line competitive advantage. They can tap into business-level value by implementing analytical applications that move beyond automation to prediction and yield advanced insights about the business.

Leadership Points the Way

The technical challenges to deriving actionable insights and decision support from Big Data are immense, but utilities may face even larger issues pertaining to the organization. Analytics will add very little to an organization that is not prepared to transform operations through better business intelligence. Leadership must set ambitious goals, establish interdepartmental teams, and ensure the organization has a practical and realistic plan for transforming performance through better business intelligence.

It makes sense to identify one area of the business to begin perfecting the use of analytics. A utility can target any business priority — customer engagement, outage management, integration of distrusted energy resources (DER) — and begin nurturing a culture of analysis and transformation.

Customer engagement is high priority, because the utility can breathe new life into customer relationships by delivering meaningful value-added services. Businesses across the economic spectrum are increasing their value to customers through intelligent, digitized solutions, and utilities can do the same.

As providers of energy products, utilities are perfectly positioned to improve customers’ energy management capabilities, and in doing so they can make big strides in relevance. Millennials and many older customers are willing and eager to walk away from utilities and all other incumbent institutions and turn to upstart providers for intelligence-driven solutions.

To build value in consumers’ eyes, utilities must be enablers who deliver access and control. By making smart meters into hubs that communicate with appliances and sensors in the home as well as solar PV, a utility can establish itself as the linchpin for home energy management. The technology already exists to enable TOU management for lower electric costs, yet most customers are not armed with dashboards and smartphone apps from their utilities to manage TOU.

In a less regulated industry, companies that failed to capitalize on these opportunities would plummet towards irrelevance, because nimble competitors would vault over them and meet consumers’ needs. Utilities can protect their relationships by moving proactively to deliver the kind of empowerment that customers expect from companies everywhere.

Big data and analytics can put the utility on much stronger footing in other areas as well. For example, management of a grid with growing numbers of DERs can be more efficient once the utility is leveraging predictive analysis to support load management.

By targeting one goal such as enhanced customer engagement and setting ambitious business goals, utilities can begin the process of transforming themselves to intelligence-driven organizations that can grow much stronger.

They will have to develop sophisticated platforms for delivering intelligence and analysis, and they’ll need to deploy the advanced analytics applications that derive meaningful insights from massive data sets that might not integrate well. To make the applications work, they will have to undertake the dirty job of processing and managing the Big Data they are collecting from meters and sensors.

Underlying Challenges

Many utilities lack the expertise they need for advanced data management and application development, and they can use one initial project to begin building their analytics infrastructure. Through a combination of hiring and vendor relationships, they can establish a core unit that delivers actionable insights in one business area. When they are ready, they can build horizontally from there and extend the advanced analytical approach to other segments of the business.

Data integration is an expensive and difficult challenge in many organizations. The most profound business insights derive from integrated analysis of different data streams that may be isolated in silos and be of limited use. For example, sensors or meters might transmit data that an analytics application is unable to parse, and data quality may be poor. Utilities need adopt rigorous standards for managing data streams to enable meaningful analysis that draws on diverse data types, such as meter data and information stored in legacy systems.

To achieve the rich insights that analytics can deliver, utilities need to prioritize data integration. IT can manage the hands-on work, but it is leadership will drive the organizational mission. Utilities can build value only through top-line improvements, such as empowering customers with through cutting-edge intelligence and engagement. Leaders who embrace the mandate and manage the challenges of transformation process proactively can help ensure a stable, meaningful future.

—By John MacKenna, Energy Writer

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