Utilities And The Pitfalls Ahead

Antonio Lisboa, Chief Solution Architect, EDP

In a world that is spinning faster and faster the mantra seems to be that digitalization must occur fast and change should be even faster. We all live it. The smartphone we just bought has quickly been outperformed by a shinier and fastest new model that is advertised in that big billboard. And everything keeps evolving faster than we can keep up.

This constant evolution has a natural consequence that is trial and error. And sometimes a company pushes a technology only to see it fail when it reaches the market and require a significant overhaul, like what happened with Samsung and its Galaxy Fold in 2019 that required a recall and another 2 years refining its development.

On the other hand, some sectors in our economy are valued not for being disruptive but for providing a much-needed stability. The energy sector is one such sector. After all, it wouldn’t be a good experience for a hospital to lose power because the grid operator was trying out new ways to transmit power over the entire grid. Having backup generators fail and people losing their lives in the process but lets go over that grim notion…

Still these large antagonic points of view aren’t mutually exclusive, and companies that want to survive and prosper in the information age must learn how to live in this environment.

So, what are the topics one should be aware and integrate in the company strategy?

I identify 5 main ideas

Cloud transition

Most big companies come from a mindset where their servers and hardware were mostly in a datacenter controlled by the company. This was the way to control the hardware and scaled it (mostly) to the company’s needs also, some years ago the only option.

Nowadays we have a whole new world of possibilities. The Cloud brought a new paradigm. No longer would we have to define beforehand where the business needs were for the next 4 or 5 years. We can now see how the market evolves and adapt accordingly. At the same time, we no longer need to buy a mostly oversized machine because of that end of month process that was just too heavy. All of this can be optimized. Request processing power when needed and release it when it’s not needed. As well as using solutions that were not defined beforehand, but the cloud provider now supplies.

"It’s not all roses, a new paradigm requires a lot of knowledge and if one is  not careful the billing at the end of the month can leave a bitter taste and  sweep away most of the yearly budget "

Still, it’s not all roses, a new paradigm requires a lot of knowledge and if one is not careful the billing at the end of the month can leave a bitter taste and sweep away most of the yearly budget. So, investment in teams that know how to control the cloud is mandatory.

Cyber security

In a more and more connected world, threats no longer come just from some bad actor going physically into our datacenter, but anyone in the world with an internet connection can cause serious impact on the operation of a company. Crippling recent examples should serve as a warning of the importance of investing in this area. From the Ukraine 2015 energy grid hack to the more recent Colonial pipeline that was victim of ransomware and created significant social and economic impact.

Have in mind that just by pouring money in the cyber security team won’t solve all problems. Even with a very diligent team or the best software in the market, if there isn’t a companywide culture of cybersecurity all will come tumbling down.

IoT

Small devices and sensors bring a new way of controlling one’s business. No longer can we just rely on guesswork to prevent machine failure, or to manage replacement parts in our warehouse. IoT devices bring another game changing path to be ahead of the competition, specially when paired with 5G and its low latency for real-time control and feedback.Of course, an onslaught of information needs capable IT solutions something that Cloud services can help tackle.

Human resources

The pilar of a company it’s its people. People should be the pilar of a company for it’s the people that bring and maintain the business. Here I see two challenges. On one hand many utilities companies are historically older companies derived from state owned entities and have older people working. This creates a timebomb where a significant part of the workforce my soon retire and take a lot of knowledge with them. At the same time, being older, is sometimes also a problem for them to adapt to new processes and IT systems. On the other hand, in this growing digitized world, finding people with the right IT skills is harder by the day, as universities can’t train enough people for the market needs. This makes it difficult and expensive to develop the solutions that the market demands, even if you factor in near and far shore options.

Documentation

One final and mostly overlooked dimension is documentation. This applies to architecture, processes, infrastructure, developments or whatever the company creates. It is a part of most projects (or even agile development teams) neglect to some extent. It’s seen as a lesser job, but its impact long term is colossal. Even when there is a process that aims to guarantee that all is documented, many times the detail just isn’t there. The result? After some months or years knowledge is lost and only through the photographic memory of an employee or some lost mail in a mailbox may problems be avoided.

Overall, these are just pointers or warnings a company needs to have in mind in this fast-paced new world where IT is king and is everywhere. Just like the proverbial story of Pandora there is no turning back so if we don’t want to be left behind, we must run hand in hand with innovation always having in mind that the utilities sector demands stability and reliability. Of course, the transition to green energy and smart grids will be another great challenge, but it’s a topic for another day.

Disclaimer – These opinions are my own and should not be seen as a position of the company I work on.

Utilities

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