The utility industry is in a state of upheaval. With demand for electricity falling after 100+ years of steady growth, companies are in the hot seat about how to cover grid costs and deliver returns for shareholders. Digital transformation looks to be the path forward. In fact, 70% of utility executives say their companies need to become digital leaders in order to succeed in the current climate. That path forward is rife with challenges, though, as many companies can attest. The utility industry, especially, is well below that of other industries when it comes to digitization, according to a McKinsey Global Institute study. That may be due to the specific challenges facing this industry, not least of which is the considerable investment necessary. Still, digital optimization can boost profitability by 20 to 30 percent. The key to success lies in the ability to think differently about the value of smart technologies.
In its worldwide IoT forecasts, IDC found that utilities will spend $61 billion on IoT solutions in 2019. Once their digital foundation is in place, these companies will need to invest in analytics in order to optimize smart assets. That is, they’ll need considerable resources to comb through vast stores of data in order to find useful information. Digital transformation is a journey rather than a destination, but the journey from legacy to smart technology takes, on average, five years.
Still, there’s little doubt that digitizing processes can bring about positive change—Imagine field workers having data that tells them exactly where and when a power line goes down. Without smart technology, these workers are left to perform time-consuming and expensive—not to mention oftentimes dangerous—tests to determine the structural integrity and stability of a pole. Field workers with real-time, mobile access to technical information can improve productivity and reliability, leading to higher profits.
Outside of costs and time to market, the data itself is a challenge. Many companies spend thousands deploying and maintaining platforms for data that they fail to use. In the UK, the average mid-sized company spends £435,000 a year to hold 1,000 terabytes of data that they know is useless. Nearly a third of business intelligence professionals still spend at least half of their time cleansing and formatting raw data to make it ‘analytics-ready.” Just 5% of companies that attempt digital transformation say they have achieved or exceeded their expectations. Clearly, there’s room for improvement.
What if we could gather only the business intelligence we absolutely must have in order to make smarter decisions and improve processes? What if we could push all of that unnecessary data aside and get to the critical information faster? The solution isn’t more complexity. In fact, it’s quite the opposite.
Imagine if the equation for digital transformation could be simplified down to a set of binary questions resulting in specific answers and clean data. It would give legacy equipment a voice and allow field workers to perform targeted preventative maintenance and quickly locate and solve issues. What if legacy equipment can be made to learn what “normal” behavior is, and rather than inundate users with mountains of data, send an alert only if anything beyond that threshold occurs. By analyzing and identifying abnormalities, this system would know what needs to be serviced and alert the right teams to the precise location of the issue.
At its essence, digital transformation makes legacy equipment “smart.” If your legacy equipment, e.g. utility poles, could talk, what would you most want to know? It’s likely you can break this down to a simple binary question—is the pole supplying power to the grid? If it is performing as it’s intended to, no data is captured. Only when an issue arises will you receive a response. That means there’s no need to scour massive datasets, because you’re only alerted about useful information.
Solve for X
Executed correctly, a digital shift can reduce operational costs by up to 25% while increasing performance gains by 20-40%. The majority of companies, though, don’t have the resources to wait five years to realize these gains. The solution lies in having a clear understanding of the motivation behind digital transformation: the need to improve overall efficiency by identifying and fixing major bottlenecks. With that knowledge, companies can choose easily integrated, smart technology to solve for X, their biggest challenge, rather than investing in an entire overhaul of their infrastructure only to require more resources to handle the resulting surge of complex data.
Digital transformation is complex, but powerful computing and improved connectivity are making way for disruptive technologies that create new opportunities for companies of all sizes. Utility companies that are able to see digitization through a different lens will be able to find a simplified solution that costs less and provides a quicker ROI. Learn more about the Atomation solution that gives your legacy equipment a voice here.