Innovative Asset Management For Utility Industry: How To Thrive In The Digital Renaissance

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Utility industry outlook

In the utility industry, there is a trend of high service costs but stagnant growth. This is mainly due to the need to modernize the aging infrastructure, digitalize, and secure the network.

In 2019, prices rose only slightly despite this upward pressure. Low natural gas prices and declining wind and solar costs are having an impact, continuing to reduce wholesale electricity prices.

Leading in the energy industry are:

  • Natural gas
  • Wind and solar capacity
  • Renewable energy sources in general, including hydropower plants
  • The rechargeable battery

Over the past year, many state and local authorities have stepped up their support for clean energy. Some of the methods they have taken are increased standards for a renewable portfolio.

Natural disasters hit the industry particularly hard in 2019, continuing a model that could signal the need for greater utility planning and even more investment in transmission and distribution systems.

Cyberattacks on the power grid are increasing and becoming more targeted. This challenges businesses to continue to strengthen their defenses.

Decarbonization and environmental energy are becoming a top priority for companies. Some of them may have hesitated some time ago, but today most are fast-moving to expanding opportunities to address growing customer interest in clean energy and new ways to manage and control their use and costs.

The digital transformation in the Utility Industry – New ways of doing business

Achieving the long-term success of the digital transformation is through a more focused approach, using technologies to meet the challenges facing utilities today.

Interruptions, data, and decarbonization shape the future of the industry. The possibilities for providing value to consumers extend beyond the centralized model of “providing a resource through a pipe or wire”.

Customer experience and sales models

The business approach is almost entirely customer-oriented. It is also an important element of the digital transformation of utilities in the Digital Renaissance.

‘Smart’ is the word that would come across all the digital aspects in the context of the utility industry and the service economy: from smart meters to smart cities (where utilities are also offered).

Today, efforts are focused on providing the perfect customer experience. Utilities need to be able to go beyond process optimization and review business models.

More opportunities and even more data

Prosperity in the future depends on the active collection, processing, and use of data. This includes information accessible through social networks and public space.

This information can lead to insights, the application of which is directly related to customer satisfaction. Using data science and advanced analysis can allow you to leverage data as a tool for:

  • Understanding the behavior of different types of customers
  • The essence of their activities
  • Their priorities and preferences

With a better understanding of the customer, you can identify certain consumption patterns and trends, and then deploy services, infrastructure, and pricing to address them. This is about building an ecosystem of offerings and scope that leads the customer to a deeper relationship with your brand.

Get to know the business workforce

Smart enterprises will turn the ordinary work environment upside down! Everything can be drastically different from today.

The aging of the workforce and generations is becoming scarce for some long-standing skills in electricity and utilities, as incoming digital experts bring with them new skills and new expectations for how the work should be done.

Continuing its development, this new workforce will bring people and machines together in a cycle, collaborating in new roles and models. Autonomous technologies, RPA, artificial intelligence, and complete process automation allow people to spend less time on daily tasks and dedicate it to other activities that create value for the organization.

It is important to know how you will develop the capabilities of the developing workforce to make the most of tomorrow’s opportunities.

A deeper dive into future opportunities

Many unknown events and innovations are forthcoming. A lot of knowledge needs to be discovered and gained. In our world, they will not remain hidden for long. You just have to work tirelessly to discover them, because:

Those who seek the new create it.

This means:

  • Identification and tracking new trends
  • Getting acquainted with the possibilities of new technologies
  • Understand how to turn different data streams into insights that drive your business forward

Full knowledge of opportunities and abilities plus vision and imagination are key to the future success of business in the Digital Renaissance

A new approach to security

Cyberattacks, sabotage, and data leaks are aimed at the main information units of enterprises. Attacks are becoming increasingly difficult to prevent and track.

Additionally, digital connections are growing exponentially as organizations, and third parties are relying on the introduction of new connected devices and layers of new systems. New tools and techniques can help you identify all points of connection to get a better view of potential vulnerabilities.

But to create the most secure, vigilant, and sustainable organization, a risk-based and adaptive strategy is required.

Technologies leading the digital transformation

So, let’s look at some of the technological evolutions that play a crucial role in the utility industry.

Internet of Things. By adopting IoT, utilities are creating new opportunities to connect with the user, the network, and the world.

There is an influx of utility data that they can use to make quality decisions. Companies can gather information on how to provide services, manage infrastructure, and continue to meet customer needs.

Big data. With comprehensive customer knowledge and optimization of processes in the various phases of the production chain, companies can meet the needs of their business in a way that allows you to customize the entire path of the customer and provide maximum protection.

AI opens up a wide range of opportunities for utility organizations’ options, but change will not be easy. AI provides unique value to adopters in the following aspects:

  • Machine learning is applicable for real-time supply and demand forecasting and for optimizing the shipment of economic load
  • Yield optimization
  • Estimated support can be enhanced, for example with drones, replacing intensive and risky manual inspections
  • Demand management can be automated and made smarter with machine learning
  • Reduce energy theft and increase cybersecurity

Effective asset management – a critical point for Utilities

With asset management, companies in the industry ensure that:

  • Scheduled maintenance can take place
  • The assets are in good condition
  • The total costs of owning and operating the assets are minimized
  • Customers receive the desired levels of service quality
  • Businesses achieve sustainable infrastructure

With an effective management system, the business maintains an infrastructure that remains in optimal condition, regardless of the age of its components or the availability of extra funds. Such an approach is critical in the utility sector.

Here, companies have to manage as many assets as Telecommunications. Many variables need to be closely monitored to achieve optimal performance for each asset.

The good performance of each asset contributes to the functioning of the system, thus improving or deteriorating the company’s image, customer satisfaction, and quality of service.

One of the main components of an effective asset management system is the correct categorization.

Categorization of assets in Utilities

Utilities rely on many different assets, each of which plays a crucial role in the delivery of services. Here is a list of some of the types of assets used in the various industry segments:

  • Pipes
  • Networks
  • Buildings
  • Pumps
  • Machines
  • Systems
  • Operators
  • Equipment
  • Tools
  • Real estate

Of course, other utilities may have different asset categories based on the services provided. Any tool, machine, device, equipment, and people involved in the operation of installations or the provision of services to users is classified as an asset.

Roadmap: Best Asset Management Practices for Utilities

The Digital Renaissance provides utilities with many technological solutions to address the following basic requirements and needs of both businesses and consumers:

  • Sustainability
  • More flexible resources
  • Transforming business models
  • Growth in smart cities
  • A strategic approach to market enforcement

The International Organization for Standardization (ISO) 55000 and its predecessor publicly available specification (PAS) 55 can serve as excellent guidelines.

Some businesses develop their own best practice program based on the specific work environment and/or market situation. Both cases require objective measurement and continuous efficiency improvement to maximize the value of each asset to the organization, customers, and regulators.

Here’s a roadmap with best practices for asset management throughout their life cycle.

Be aware of the condition and importance of the assets

This understanding of assets is about determining what needs maintenance and whether it should not be replaced.

The necessary insights are best obtained by combining all asset data, including work history and condition assessment, into one system.

After analyzing the Big Data, the importance of one factor is balanced against another and all changes in the state are updated when they occur.

With real-time access to information, the system will have a more reliable and comprehensive view of asset health and can make more meaningful decisions about how best to balance compliance, reliability, safety, and risk.

Real-time evaluation and monitoring improve mission-critical results and investment planning. These results can be achieved with an asset management solution like Asset Insider created by Sappience, based on Microsoft technologies, for the fast and innovative conversion of assets and processes into Digital Twins.

Work proactively

A fully equipped and modernized asset management system in utilities requires huge amounts of resources to create. The reality is a little different, and it turns out that businesses need to do more work with fewer resources and tighter budgets.

Often the result is reduced quantity and quality of production. The solution to this challenge is to increase the amount of work done, thus eliminating future tasks and preventing small maintenance problems from becoming bigger and more expensive.

But how can you move from reactive to proactive asset management?

The first step is to improve and automate planning and forecasting. This will cut manual errors during the process and delegate tasks efficiently with the available workforce.

The second step is to optimize the use of mobile resources for real-time locating and tracking. This step accelerates the completion of work by obtaining the right resources for the right work at the right time while reducing emissions and operating costs.

Specialized asset management applications and software can be used for this purpose. They will be your centralized system for all asset data, where you will be able to:

  • Track maintenance activities
  • Get customized detailed analysis as needed
  • Keep track of the condition of the assets
  • Take advantage of the latest technologies, such as Digital Twins, IoT, AI and turn your Industry 4.0 vision into reality

These two steps, which can be carried out independently or in combination, reduce the backlog and enable utilities to engage in more active work, eliminating future costs, tasks, and risk.

Create a harmonized, measurable risk framework consistent with organizational values ​​and goals

It allows a comparison of potential opportunities and new plans related to the exploitation of assets.

The framework sets out a general measure of the likelihood of an accident and the associated consequences for different predetermined amounts such as price, safety, efficiency, environment, and reputation, regardless of the type of asset.

This new risk perspective will include potential developments in various possible actions. Applied effectively, it complements the effect of the proactive approach and predictive maintenance of the organization’s assets

Take advantage of the data available to make high-value decisions

The transition to an optimized approach for business management and development leads to a rethinking of data collection for services.

IoT, sensor propagation, and the connected enterprise mean that utilities collect more data than they can process, analyze, and use.

A special approach to optimization and clarity is required regarding the accurate data needed to generate the most useful results. One of the technologies we mentioned at the beginning is data analysis.

Advanced analysis of specific business problems brings value to asset managers not by replacing people, but by enabling them to make better decisions quickly and consistently.

Many organizations use new methods of analysis at many points in the supply chain and value. All this leads to increased distribution improvements, better decision-making for investment to step up, and back-office productivity.

Continuous measurement and adjustment of the implementation of the strategy

Establish a feedback cycle based on objectified risk measures using reliable data. It can help all employees involved in asset management to continuously improve the system and related processes. In a rapidly changing environment, this ability is becoming increasingly important.

Utilities can perform simulations to identify models of possible risks and opportunities for business development and to align them with the long-term life cycle of assets. This is achieved by combining:

  • Continuous assessment of the condition of the enterprise
  • Use of data together with revised policies and processes
  • Updated risk framework

A solid basis for productive synchronization between the financial and operational side of the business is created.

INTERESTING: Sometimes you may come up with solutions that initially seem contradictory and would never be achieved with conventional implementation approaches. However, they can also open up many new opportunities for improvement with the help of precise technological solutions.

Empower the value chain with the Digital Twins

An important component of intelligent industrial systems is digital models of equipment and subsystems also known as Digital Twins.

With the advancement of technology and the complexity of models, other characteristics can be modeled today, such as product demand. This type of model is vital for the digitalization of installations, equipment, and processes.

The continuous use of such models can be extremely useful in ensuring the energy efficiency of industrial machines. Benefits that, if applied well, provide massive energy savings that also help reduce environmental impact.

A technology developing the industry to level 4.1

The digital twins are remarkably powerful, precise, and accurate. To be viable, plenty of high-quality data is needed.

The first step towards applying the technology is to identify the problem, variables, and characteristics of the equipment or process. A common example is the digital twin of a car to improve its energy efficiency. In this case, it is necessary to determine which part to model and to identify the relevant static factors and variables of the system before proceeding to the next steps.

Digital Twins can be presented as a modern asset analysis. Long-established uses include simulating the behavior of network assets and predictive maintenance. But Digital Twins can take this to the next level by simulating all the different network components, their interconnections, status, and so on.

Another even more shocking role of technology is the management of operations in near real-time. You can receive live telemetry information to understand the behavior of network assets and create the ideal configuration to optimize them.

And know that there are no right or wrong applications here. Choosing the way you use the cyber objects can accidentally get to where you may have the greatest improvement.

The key to the power of technology lies in its ability to model impacts on all elements of the processes, taking into account a wide range of internal and external parameters and components.

Join Sappience and Microsoft for a life webinar and discover how utility enterprises can connect the Digital Twins with other technological solutions to rethink business processes, facilitate their adoption throughout the company, and empower the value chain.

How to thrive in the Digital Renaissance?

Here are three recommendations to position your company in the Digital Renaissance:

  1. Do not aim to rediscover the wheel
  2. Reuse models that have been successful before
  3. The strength of the digital twin lies in the way it combines individual components, but if you don’t have a foundation, it can become a challenge

Those players who adapt to the new first will have a vital advantage over the others.

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