The introduction of smart technology is arguably one of the most transformational changes ever seen in the power and utilities (P&U) sector. These technologies can transform the electricity grid into an interactive and intelligent system that uses real-time information to manage supply and demand efficiently, sustainably and economically.
The opportunity is particularly electrifying because it can address some of the industry’s most fundamental challenges:
- Responding to rising customer expectations for improved services and new products
- Integrating the increasing number of distributed energy sources
- Meeting efficiency targets set by governments and regulators
- Satisfying increased demand from emerging markets
- Optimizing network performance
Take smart meters, for example. They can drive down operational costs, increase energy efficiency, shift peak demand, provide a platform from which to deliver new products and services, integrate distributed energy sources into the grid; and reduce leakage in meter-to-cash processes.
But smart transformation will also ask tough questions of the legacy business models of P&U organizations. So CIOs will need to play an essential leadership role.
P&U CIOs focus on smart data
P&U organizations have always been able to gather lots of customer information. But smart will turn that flow of data into a tidal wave. If CIOs can help turn this data into business intelligence, they will deliver significant benefits.
For example, by using real-time data from smart meters, suppliers can anticipate demand and improve planning and workforce scheduling. Organizations will be able to build a rich picture of their customer habits and preferences, transforming the customer relationship from a transactional billing process to something far more valuable.
Customers will also benefit from more accurate readings and greater price transparency.
For the sector’s CIOs to seize the smart data opportunity, they must focus on two key steps:
- Manage the increased risk to data security With millions of homes connected to utilities — and all information gathered in digital form — information security will become a fundamental operating issue. CIOs will need to establish robust enterprise-wide approaches for information risk management and cyber security.
- Manage the demand for smart data technology and tools The transition from manual meter readings to smart data feeds means that data will be available in real time. As awareness of smart data’s possibilities grows, the IT function will be inundated with requests for smart data technology and tools. CIOs will need to take a strategic portfolio approach. They must develop a picture of which projects are realistically achievable and represent best value, carefully considering make-versus-buy decisions.
The smart transformation of the P&U sector is happening more quickly than the industry anticipated. With new entrants threatening to disrupt the sector, organizations need to act fast. P&U CIOs can play a vital role in setting their organization apart from the crowd.