How managed services can smooth the path to grid modernization
Editor's note: Smart Grid News is working with experts from Elster and other leading smart grid companies to create the ultimate guide to AMI -- a full-scale, start-to-finish, everything-including-the kitchen-sink compendium of best practices, lessons learned and future directions. When it's complete, we will make it available to you as an eBook. In the meantime we're publishing select excerpts. In this eighth installment, Josh Wepman of Leidos walks you through the pros and cons of using smart grid managed services to help with grid modernization efforts. Be sure to scroll to the end of today's article (which jumps to page 2) to access previous installments. -- Jesse Berst
By Josh Wepman
Making the jump to smart grid can be overwhelming. Itâ€™s not just about managing new digital assets in the field; itâ€™s about everything that comes with them:
Â· Field communications systems
Â· Applications, skills and application lifecycles
Â· Data models and system integration
Â· Hiring, compensating, retaining and developing talent
Â· Business process re-engineering
Â· Challenges in cybersecurity and data privacy
Â· Field installation processes and standards
Â· Increasing demands for IT operational excellence
Â· Communications with consumers
Success throughout the design, build and operations stages will challenge any organizationâ€™s appetite for risk. Utility leadership may realize that having enough internal expertise to successfully implement a comprehensive smart grid program takes more effort than expected, and taking responsibility for everything is distracting them from their core mission. Utilities want to make progress, evolving their service offerings and improving safety and reliability, while managing the cost of service. But utilities and their stakeholders want to proceed prudently with a clear sense of benefits and ROI, along with a clear view of costs and risks.
This creates the conundrum of grid modernization:
Â· Do nothing and fall behind peers and competitors
Â· Move forward at the risk of overwhelming your organization while under-delivering benefits and accepting too much risk â€“ which is bound to hit the bottom line
However, there are alternatives that reduce risk and total cost of ownership while increasing the business, operational and engineering value driven by this change.
Some leading utilities have established operational partnerships through smart grid managed services to reduce risk, transfer new technology scope to â€œthe expertsâ€ and invest in fixed-price capabilities. These utilities are leveraging investments in modernization to drive results that benefit their core mission instead of scattering their staffsâ€™ focus across a broad range of technological specialties.
What are smart grid managed services?
Smart grid managed services are about more than simple data center hosting and software as a service (SaaS). SaaS generally refers to cloud-based applications that are managed by vendors or other third parties. Software updates and other software/IT operational support may be provided, but utilities must still apply, integrate and operate the software platforms. Service levels and performance commitments for SaaS tend to be limited to IT dimensions and cover server and application availability, software patching and maintenance windows.
Managed services build on the concept of SaaS, but provide for the full operational execution of systems like AMI, MDM and their associated setup, integration, business process alignment, daily operations and system management. Managed service performance commitments focus on core business objectives and operational outcomes such as meter data collection completeness, two-way command execution availability, and billing-data quality and timeliness. They focus on strong business, operation and engineering results, not on IT and raw technical metrics.
What to look for?
Smart grid managed services can help utilities move faster with lower costs and risks. However, simply signing up isnâ€™t the answer to all questions. There are some things utilities must consider in their pursuit of smart grid managed services:
Â· A real business case. A smart grid managed service should be able to clearly demonstrate how it achieves business, engineering and operational objectives in a cash flow and revenue-positive manner. All the scope at all the cost, when the business case canâ€™t justify it, will never work, managed service or not.
Â· Culture alignment. Managed services are not for everyone. Some utilities have made long-term commitments to investing and growing their internal technology capabilities. Some have the scale, desire for full control and are willing to acquire and retain internal talent and to fill in the gaps as needed. And some just have the scale to absorb whatever comes. To these utilities, the risks or change can sometimes effectively be carried internally.
Â· Hosting is not the same as managed services. A hosted application does a lot to reduce up-front capital IT costs, but it does not address application integration or the needed people, processes and tools to operate them. Hosting can be a flexible IT solution, but it is often not enough to help shift risk, scope and cost away from utilities looking to be results focused.
Â· "Operationalization." The process of managing integrated, multi-platform, business process-driven change is often referred to as "operationalization." Documenting, guiding, transforming, implementing and supporting the daily business processes across the utility can be the most intensive and challenging component of smart grid transformations, so the managed services provider should be leading the utility through this transformation.
Â· Experience is the key. Managed services are hard to get right by vendors for all the same reasons they are hard for utilities. Make sure the partners you choose can demonstrate their success in delivering the full managed service.
How would you tackle the future?
The breadth of scope involved in really successful smart grid implementations stresses utility resources, focus and risk tolerance. There is simply so much to do throughout the lifecycle of a successful program that few can go it alone and expect world-class results.
Leveraging effective, experienced and proven managed services can help shift non-core burdens to more than capable partners and allow utilities to focus on leveraging the needed smart grid benefits related to their core mission: Safe and reliable power at the right cost of service.
Josh Wepman is a senior solution architect at Leidos and serves as the product manager for the Leidos Smart Grid as a Service (SGS) solution. His present work includes developing integrated smart grid and AMI solutions that empower utilities to transcend basic technology investments and instead focus on clearly understood business, operational and engineering benefits.
Elster Solutions is the North American electricity business unit of Elster, a multi-national, 7500-person company providing electricity, gas and water meters and related communications, network and software solutions to customers in more than 130 countries. Headquartered in Raleigh, NC, Elster Solutions is focused on delivering the vital connections utilities need to achieve the greatest possible value from their meter data.
Earlier installments from the ultimate guide to AMIâ€¦