Digital transformation in utilities: An uphill battle?

24th June 2022

This won’t surprise you, but digital transformation is really hard. It’s even harder when you’re working in a heavily regulated industry with legacy systems, messy data, and impatient stakeholders. We can all wax lyrical about how things should be (predictive maintenance, anyone?) but getting there is a tricky journey for a large energy or utility business. Most of the time, the desire for solutions outstrips organisational patience, with everyone racing off in different directions simultaneously.

If you are the one trying to drive meaningful digital transformation (for digital transformation, read data-driven transformation), it can be a nightmare. People set out with good intentions, but they can end up accidentally creating more of the problems you’re trying to solve. This triggers a downward spiral of frustration and reactive behaviour that ends up with no one being able to access the information they really want, complexity growing exponentially, and money being wasted left, right and centre. It can be a thankless job if you’re responsible for data transformation or delivering a data strategy.

The truth is that real, systemic change can take years, and it doesn’t start with the shiny stuff. You need to show your colleagues a different way forward. Everyone needs to stop talking to those beguiling tech vendors and focus on the data holy trinity of:

1.      Data Strategy.

You’ll need a persuasive one that has executive backing. This is Utilities, not Fintech, so long-term investment in strategic data capabilities is not a given. This means you need:

·      Clear, specific objectives for monetising the organisation’s data, backed up with a target operating model and a strategic roadmap.

·      Alignment to business strategy and critical organisational goals. As in, properly aligned, not just lifting a few buzzwords or an infographic from your last ‘meet the CEO’ session

2.      Enterprise Data Model(s).

Actually, your stakeholders will constantly be asking for this; they just don’t know they are. People complain about what is staring them in the face – poor data quality, low data access, inaccuracy, and conflicting truths. The real cause of their pain is that there is no underlying information framework or shared vocabulary for your organisation. There are as many truths as there are organisational siloes, and the kinds of cross-functional insights that unlock value are cut off before they can emerge.

3.      Data Governance.

Not a crowd-pleaser, but also non-negotiable. We mean proper, business-wide effort to get on top of and maintain organisational data,  not just a few hardy souls in IT or the data team fighting a futile battle against indifference. It is critical not to blur accountability or give data owners even the faintest hint that someone else will do it. Find them, provide them with a process and repeat ad infinitum: manage and monitor, manage and monitor….

Sitting behind all this is a shift in underlying mindset: from impatiently pursuing point solutions to building enduring foundations. The hard part is to sell it to an organisation that wants quick fixes.

The temptation is to put together a detailed presentation about your ideas, backed up by many best practice examples and quotes from textbooks. The problem is, nobody really cares. Theory is never as powerful as the audience seeing capability in action and what it can do for them. People need to experience the benefit of doing it differently, and they need to experience it quickly.

At Oakland, we’ve got a way of doing this. We call them ‘Lighthouse projects’ – self-contained, high-impact initiatives which take a narrow scope but drive deep through the data value chain. Think of them as a chance to lay the first few bricks of a much bigger building. The trick here is picking self-contained problems but offering the opportunity to demonstrate strategic data capabilities in action. That means knowing your organisation. If you’re in the Energy or Utilities business, here are a few examples of what we’ve seen work well in organisations like yours:

1.      Major capital projects are nearly always where utilities make big bets but are notoriously hard to track and risk assure. Can you bring that data together at last? It shows the value of a data model and platform in action in an area most of your senior team are secretly (or not so secretly) stressed about.

2.      Find a specific, legacy operational process or application nobody’s happy with and build it back better and cheaper (preferably with open source tools in the cloud). Here’s one we prepared earlier! https://bit.ly/3bYXPv7

3.      Pick a few key assets or sites, profile the data, and then work with the local teams to clean it up. Show the impact on data quality but also, crucially, on outcomes. How many fewer abandoned work orders were there from the improved equipment records? It’s Data Governance in action. It makes everyone’s life easier, and it’s not as hard as you think if everyone does their bit. I mean, it’s still pretty hard, but the important things are.

If you pick the right Lighthouse projects, the wider organisational relevance of what you’re doing should be clear and easy to explain, even to a (previously) sceptical audience.

Once you’ve landed some of these projects and built momentum, the case for a more significant investment in data capability is much easier to make. Now you can mobilise that wide-reaching, strategic investment in data capability that you’ve known all along is required. Who knows, that headache you’ve had for the last five years might even go away.

If you’d like to speak to one of our utilities experts, please click on the link below to book a discovery call.

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