The Intelligent Utility: The 15 Keys to Business Value

By Harriet Prithcett MED and Dutch Holland PhD

In the year 2015, we see the use of Intelligent Utility technology to create business value as an integral part of successful utility companies. What role will you be playing then and what will you do now to prepare for your future in the IU world?

The keys described in this book enable the successful management of work processes that are enabled with IU technology. Keys are critical because improving work processes is tough work that requires knowledge of the "tricks of the trade. The fifteen keys are all about "greasing the skids for the wide-spread use of IU technology to create business value. This book contains the needed implementation mechanics, spelled out in simple, practical yet powerful terms.

Failure of Intelligent Utility projects is no longer excusable with these keys down in black and white. You can be an IU winner, not a victim of poorly- run IU projects.

"You don't have to be afraid of change any longer! Dutch's work offers entertaining and simple solutions that will help you move swiftly and efficiently through the growing pains of organizational change," says Ken Blanchard, author of The Secret and The One Minute Manager.

• Language: English
• Publisher: Xlibris US
• Release date: Nov 30, 2012
• ISBN: 9781479724895

Harriet Prithcett MED

Dutch Holland, PhD & Jim Crompton, MS ENG are highly regarded as “thought leaders” and as consultants who will tell it like it is. The authors’ collaboration combines management consulting experience in upstream with oil & gas domain expertise into important insights about creation of business value from digital technology. Jim and Dutch are both convinced that the Digital Engineer concept must be made a reality or the Big Crew Change will likely result in both “outdated roles” and replacements that may “fit the roles but not the digital future of the upstream business.”

Book preview

Table of Contents

24227.jpg

A NOTE TO THE READER

INTRODUCTION

Implementing IU Technology

Business Value Architecture: Overview Chapters

CHAPTER ONE

Intelligent Utility Business Value Architecture: A Preview of the Fifteen Keys

CHAPTER TWO

Strategic Business Architecture

CHAPTER THREE

Work Process Architecture

CHAPTER FOUR

Technical Process Architecture

CHAPTER FIVE

Vendor Architecture

CHAPTER SIX

Intelligent Interfaces for Effective BVA

CHAPTER SEVEN

The Intelligent Utility Culture

CHAPTER EIGHT

Implementation of Business Value Architecture to Enable the Intelligent Utility

Supporting Chapters with More Details

CHAPTER NINE

Collaboration and Incentives for IU Implementation

CHAPTER TEN

Portfolio Management for Intelligent Utility Projects

CHAPTER ELEVEN

Implementation Strategies:

Deploy or Adopt? Success or Failure?

CHAPTER TWELVE

Caution: Workflow Analysis in Progress

CHAPTER THIRTEEN

Models for Innovation

CHAPTER FOURTEEN

IU Maturity Factors

and Limiting Paradigms

CHAPTER FIFTEEN

A to Z Services from IU Vendors? Not yet!

CHAPTER SIXTEEN

Organizational Culture of Support for IT

CHAPTER SEVENTEEN

Implementation Principles

CHAPTER EIGHTEEN

IU Leadership Roles

CHAPTER NINETEEN

Who Does What for Intelligent Utility Value

CHAPTER TWENTY

Go-No-Go Criteria for IU Implementation

CHAPTER TWENTY ONE

The Leadership Last Stand

CHAPTER TWENTY TWO

The Sweet Spot for IU Professionals

CHAPTER TWENTY THREE

Big Ideas for IU Implementation

CHAPTER TWENTY FOUR

Integrated Risk Management for the Intelligent Utility

CHAPTER TWENTY FIVE

The Test for IU BVA Fatal Flaws

CONCLUSION

Implementing IU Technology

SERVICES … 1 2 3 4

CONTACT US

ENDNOTES

Dedication by Dutch Holland

This book is dedicated to the kids in my life: the little kids -- Everett, Dean, David, Win and Hope -- and the big kids -- Eric, Wendy and Bear. May they continue to flourish – and God Bless!

My thanks to Digital Energy Journal for their support of my research and writing about managing technology introduction, and to Art Adair ([e-mail]) who never met a paragraph he could not improve.

Dedication by Harriett Pritchett

This book is dedicated to change management consultants and practitioners working across industry. Those I have worked with and those I have yet to meet. May you continue to lead change, evolve and prosper!

A NOTE TO THE READER

The wonder of our backgrounds causes us to want our content served up in an almost infinite number of ways. And we wish we could get the answers we want from just a few memorable sound bites. Sorry, the explanation of weighty and important concepts takes more than sound bites. We have, however, written this book to be as accommodating as possible with three options for getting value from our content. Good luck!

The organization of this book

The basic principles of Business Value Architecture are presented in the first seven overview chapters. The remainder of the book, Supporting Chapters, is more like a reader, in which a variety of IU subjects are handled as separate topics. The majority of the subjects in these supporting chapters have been published articles or white papers and written at separate times (and moods) over the past few years.

Option One: Just the meat, please!

If you only have time to read a few chapters, then read Chapters One through Six -- the Overview Chapters. In fact, you might want to read them twice. Chapters one through six are written to be a short digest of Business Value Architecture for the Intelligent Utility. Then go straight to Chapter Twenty Four and take the Fatal Flaws test. Pass that test and you have the meat of Business Value Architecture.

Option Two: No structure for me. Can’t I just skip around in the book?

Of course you can! Skip around. Just take a look at the table of contents to find chapters that are interesting to you or that relate to your current situation. Better yet, identify those chapters your boss needs to read and strategically position those chapters or important ideas from those chapters right in front of him or her.

Option Three: I want everything, big picture down to Details!!

If that is your goal, just keep reading straight through the book, making sure that you follow the instructions at the end of each overview chapter, instructions that will identify the Support Chapter(s) you might read before returning to the next overview chapter.

Option Four: I am only going to read one, get that, one chapter!

OK, Twenty Three: Big Ideas for IU Implementation. Knock yourself out.

INTRODUCTION

Implementing IU Technology

Implementing digital technology for business value is one of the single most difficult endeavors any company will undertake! Fortunately, the principles for implementation are down in writing at last!

Implementing Digital Technology

SEVERAL DECADES OF implementation of digital technology for business value have proven to be both good and bad. The good news is that, when successfully implemented, such technology can be a major boon to a business. The Bad news is that implementations are far more complex and difficult than anyone had imagined. Learning about implementation has been slow … but sure. The most significant learning has to do with managing different kinds of risks.

FigureI.1TheThreeCriticalRiskspdf.jpg

Figure I.1: The three critical risks

Business Value from implementing new digital technology is totally dependent on the successful identification and management of three separate but inter-related risks:

• Technical risks (will the technology work?)

• Organizational risks (if it works, will the organization use it?), and finally

• Business risks (if it works and is used, will the company gain business value?).

•  

This book that describes the business value architecture for implementing the intelligent utility has been written with this Great Risk Management Learning taken into account in every dimension of the architecture we describe here. Now let’s move on to the specific kinds of digital technology that is the subject of this book.

Will IU be a Game Changer or just another Resource Hog? The time for management to decide is now.

Implementing the Intelligent Utility

The marketplace is recognizing the potential business value of digital technology. The Intelligent Utility, led by numerous vendors, is off and running toward digital solutions … i.e., the Intelligent Utility (IU). Correctly applied, digital technology can be a game changer for the utility business of the future (UBF). What is at stake? He who exploits new technology first will have an edge until others catch up. But applying digital technology is easier said than done as many companies are finding out.

Initial IU projects have shown good potential but many have been degraded because of implementation problems, due to both technical and business lack of readiness. In terms of implementation, company approaches to IU are all over the map with many approaches developed around existing vendor products rather than around work processes they wish to improve. Utility companies must mature their understanding of IU to be able to regain control and use the full power of IU.

Phases of Learning from the IU experience … so far

• Phase One: Oops! It’s not just technology!

• Phase Two: Whoa! It’s people, processes, AND technology!

• Phase Three: Wait! It’s business performance realization that counts!

• Phase Four: It takes top-to-bottom Business Value Architecture to fully exploit IU value!

FigureI.2.jpg

Figure I.2: Four phases of learning from the IU experience

After some years in a IU 1.0 environment, characterized by a one-project-at-a-time mindset and technology experimentation, it is time to move our thinking and our capabilities to the "enablement" of maximum value from digital technology. Enablement, an approach which provides means and opportunity, is dependent on three key factors:

1. Management purpose, will and commitment,

2. A business improvement imperative, and

3. The use of Business Value Architecture

If IU is going to be used to achieve management’s purpose and for maximum business results, companies must prepare to the garden in which IU fruit can grow. The garden, in this case, is the company’s capability to put IU resources to work for business value: it’s Business Value Architecture, the arrangement of the organization’s moving parts from the organization’s strategy for IU, to its organization and incentive structure, to its operational and technical work processes.

FigureI.3Enablementofmaximumvaluedocx.jpg

Figure I.3: Enablement of maximum value from the Intelligent Utility

The garden should enable organizations to move full steam ahead in the exploitation of digital technology to maximize business value. IU must be enabled with the right organizational structure, the right work processes, and the right technical capability.

But before there can be a revolution in business value, there must be a revolution in the way companies manage their businesses using digital technology. Why do we need a revolution in the way we manage IU? Aren’t we all doing fine now? IU in most companies is managed a project at a time, not as the company-wide planned adoption of a valuable new technology that will serve the company and the industry for some time to come.

What is your organization’s state of readiness for the Intelligent Utility?

New technologies seem to come in waves. New technologies can make or break companies or careers. The challenge is to get your company on the bandwagon with a strategy that fits them. The challenge for you is to get on the bandwagon and help, not resist. We know that new technology doesn’t just get absorbed and used until the operations guys get on board.

Utility companies are all over the map in the ways they are approaching the Intelligent Utility, from passive and unprepared to fully-prepared to exploit.

What are your organization’s next steps for building readiness for the Intelligent Utility?

1. Assess your organization and your readiness condition.

2. Determine exactly what is at stake for your organization and for you and your team.

3. Plan the steps needed to move to the fully-prepared position and

4. Implement your plan.

FigureI.4Stateofreadinessdocx.jpg

Figure I.4: States of Readiness to Exploit the Intelligent Utility

Summary and key points

The wave is coming and it is going to make money for companies and make or break careers for managers and engineers. To advance their careers, engineers will need to be proactive to help their companies win. Stepping out and being the leader in the introduction of IU will be an act of leadership that will serve an engineer well.

Business Value Architecture:

Overview Chapters

CHAPTER ONE

Intelligent Utility Business Value Architecture: A Preview of the Fifteen Keys

When a utility company decides to go for it to maximize the use of Intelligent Utility technology for business value, the organization’s architecture, its moving parts, must be altered and configured specifically to exploit that technology.

JUST SAY THE magic words to fully realize Intelligent Utility (IU) business potential. The IU movement is here, and it offers great potential. But how does one realize that potential for his company? Simple. All that is necessary is getting executive management to speak the magic words … as in the interview below:

Scene 1

(An annual stockholders meeting of a public company)

AUDIENCE MEMBER (A WALL STREET ANALYST)

I‘ve been reading about the Intelligent Utility, and it sounds important. What are you guys doing in IU?

CEO

Good question. We fully realize the value of digital technology as a key performance improvement tool. We’ve successfully completed two IU projects thus far, and I’ve given the full speed ahead signal to fully realize the business value of IU. In fact, gains from IU deployment are now specifically identified in our corporate strategy and goals.

COO (in charge of Utilities Operations)

I agree with the CEO. We in operations have examined every inch of our technical and business workflows, and we’ve identified those steps where applications of IU technology can produce the most business results. We have specific goals in place to realize that business value, and our guys are hard at work with our IT and Engineering folks to take advantage of those opportunities.

CIO

My organization thoroughly understands those processes in the business where digital technology can add value. We’ve worked both inside our shop and outside with our vendor community to nail down the technologies and tools that we’ll need to bring to the workplace to meet those specific business goals. Let me read a letter I just received from our IU vendor. Thank you for selecting our company to be your lead Intelligent Utility technology provider. Your specific explanation of your needs and goals will allow us to meet your needs now and in the future.

ANALYST

Great … and thanks for your very specific answers. . . (Interview concludes)

Simple, right? Those are indeed the magic words for full IU exploitation. But what’s behind those words from the CEO and his team? More than words are needed. The IU revolution centers on the way that utility companies configure their organizations for maximum use of digital technology.

Exploiting IU through Business Value Architecture

Architecture may be a fancy word, but it is being used today to describe how an organization or an enterprise is put together. Enterprise architecture (EA) is a comprehensive description of an organization’s elements, i.e., its moving parts, including enterprise goals, business functions, business processes, organization, roles, business information systems, software applications, and computer systems.

When a utility company decides to maximize the use of IU technology for business value, the company’s architecture, its moving parts, must be altered and specifically configured to exploit digital technology.

In fact, fifteen (15) different moving parts must be altered or full business value will not be realized from the Intelligent Utility.

The resulting reconfiguration can be called Intelligent Utility Business Value Architecture (IU BVA).

Configuring architecture for IU might sound pretty mysterious … so let’s translate. Example: when a utility company decides to make IU adoption a higher priority, the goal statements of Senior Managers might be reconfigured to target specific business gains through the use of digital technology. Or, for another example, the operations’ organization may be called on to identify the specific parts of their workflows where IU solutions (e.g., collaborative technology, data bases that can talk to each other) might make a positive gain in business results.

IU BVA can be described as a combination of three different structures that must be aligned and integrated to maximize the business potential of digital technology in the business. Each structure contains five moving parts or keys.

1. Strategic Business Architecture … including the company’s IU vision and strategic goals, measures, and incentives

2. Work Process Architecture … including the matrix of technical and business work processes needed to achieve the organization’s strategic goals

3. Technical Process Architecture … including the processes inside the IT or R&D organization to manage the digital resources required to enable work processes and enterprise optimization

Unfortunately the three architectures do not always work smoothly together. Effective interfaces are required between the architectures to provide smooth and harmonious operation. That important component of Business Value Architecture will be covered in a later chapter under the title of Intelligent Interfaces for BVA.

Figure1.1theelementsofdofbvapdf.jpg

Figure 1.1: