The Transforming Utility Industry
One of the many challenges of a utility CIO is keeping up with the rapidly evolving demands of an IOT world. The utility industry is transforming as a result of flat to declining demand for electricity combined with declining electric wholesale prices. This is driving a need to find new ways to reduce costs and increase revenue while maintaining service reliability. The result is heavy investment in new technology, forcing an integration of information technology into utility operations. A key success factor is the ability for IT to be effective and credible to align and operate in the new paradigm of a digital utility.
IOT-enabled sensors are providing opportunities to help the utility business save costs and increase revenue. As an example, the technology used to monitor jet engines is now being used to monitor the performance of gas power plants, which are industrial twins of jet engines, except they don’t get to rest between flights. Failures of gas generators can cost hundreds of thousands of dollars and without backups, could cause loss of life due to power loss. Thanks to IOT sensors, utilities are now performing predictive analytics to reduce operational costs and increase revenue opportunities.
To realize the benefits associated with IOT-related capabilities requires the combination of utility operations and IT expertise. The challenges in integrating IT and OT (operations technology) are many. They include differences in culture, education and language. Often, there is a question of trust.
The utility industry is transforming as a result of flat to declining demand for electricity combined with declining electric wholesale prices
Situations like this are great opportunities for CIOs to demonstrate leadership. The speed of success is a direct result of the CIO to build relationships across the business by listening, understanding, and aligning goals while working together to deliver business value. There is no one way to build a relationship, but it takes two leaders to work together.
A year ago, my company identified the working relationship between IT and OT as a risk to achieving our strategic goals. Today, the relationship between IT and OT is regarded by our respective teams as a strength. So, what changed?
It started with a change in leadership and organization. As I was brought in as the new CIO, the IT and Operations teams started working together on a project that required the implementation of software, collecting large amounts of data from the operational systems and analyzing them. IT provided the expertise in software, cyber security and analytics. IT started working with Operations because leaders made a decision to work together. Consistent with the culture of our company, it was the right thing to do.
Doing the right thing sometimes takes a little push to move in the right direction. In my first few days as CIO, I kept an eye out for IT-related production issues. The first was a network outage in one of our power plants. I asked my infrastructure director for direction on helping Operations get back online. The reply I received was that this was OT’s responsibility, which reported to Operations. IT didn’t get involved in these outages. This became a learning moment for my staff. This was also a learning moment for me in understanding the division between IT and OT and the beginning of a three step plan to close the gap.
The first step was setting expectations to work as one team. Our COO introduced me to his team as someone he trusted. I honored that trust by listening to his leadership team and learning what I could do to help them achieve their business goals. I still take every opportunity to sit with our Operations team to listen and learn. My team does the same. Expectations have changed and we work hard to maintain relationships and work as one team.
The second step was clarifying responsibilities. As our teams talked, we worked together to plan how we would achieve our goals and who would be responsible for each step of the plan. Our COO and I provided an environment and expectation for our teams to learn and make decisions together. One of my first achievements was co-sponsoring an effort across IT and Operations to understand our network needs across the enterprise and at the plants. This has enabled me to centralize enterprise network services, an outcome one of my directors told me was not yet possible.
As I’ve challenged the status quo, there have been many comments about how this was not the way things had been done before. Those comments did not last; my team figured out that I already knew that. Persistence won out and, over time, our IT and Operations teams have continued to improve their relationship.
The third step was sharing success. As we worked on our strategic initiatives, our teams shared in the challenges and successes achieved by working together. Recently, we implemented a new analytics maintenance and diagnostics center in record time. We piloted a new IT operating model to better align our IT resources, which allowed us to increase our throughput. These changes have enabled us to meet aggressive business goals and build credibility for IT to help our business transformation. Sharing success is important reinforcement to teamwork. It’s also fun, which is important as well!
Success is measured by our ability to work together. The better we work together the faster we achieve great things. We continue to learn how to work together for a worthy cause – to power the economic growth and competitiveness of New York State. What more can I ask?