A paradigm shift for utilities

As customer habits change, utility companies are having to alter their business models. And they need smart software to be agile in a fast-moving market.

A paradigm shift for utilities

As more and more customers start to generate their own electricity - through rooftop solar for example - power utilities are finding their traditional business models under threat.

With large swathes of the population going off-grid, utilities are being forced to transition their businesses from a centralised model to a distributed model.

This has implications for utilities, both on the flexibility of infrastructure and the volume and complexity of information they have to manage.

“We have already moved from a single monopoly provider in energy services to an increased number of providers in transmission and generation,” says Jeff Roorda, general manager for strategic asset management at TechnologyOne, a leading enterprise software company.

The ASX-listed company counts nearly 400 customers who rely on large asset bases to deliver services including utilities, airports, ports and councils across the country.

Energy utilities, and to a smaller extent water utilities, are tracking a shift similar in magnitude to what has happened in the telecommunications space, where customers no longer depend on their copper phone lines because all communication is now possible through wi-fi and mobile phones.

This fundamental shift has changed how telecommunications providers have been delivering services for the past 50 years or more.

A similar change is occurring in the energy sector, which is heavily influenced by government policy. As policy and technology shift the economics of all renewable generation also change very quickly.

The evolving model threatens traditional asset-management approaches that use historical data with a focus on the maintenance and reliability of existing assets.

“Where TechnologyOne comes in is we predict what the future infrastructure requirements are going to be,” Roorda says.

“So we are not just interested in the condition and reliability of what is already there, but also in what are the changes in demand, what are the changes in capacity, what are the changes in customer requirements, so what should future assets look like?”

This involves analysing changes in demand and trends and demographics.

Most organisations manage this kind of information through separate, fragmented software packages which make it very difficult, if not impossible, to pull all of the data together.

TechnologyOne's approach is to combine all this information into a single solution in order to harvest data to predict, for example, what kind of assets its customers should have in the future.

It also connects a single source to all its predictive models to use these highly dynamic data sets that change rapidly.

Another issue is that as the energy sector moves towards a more distributed model, a far bigger volume of data is generated.

For instance, instead of simply providing energy and expecting them to pay the bill, utilities now look to work with customers to manage their energy usage in order to achieve a lower total energy bill.

So they will monitor a customer’s usage data and provide feedback and help in identifying areas where energy is being wasted.

“You now start to manage a lot of data working with customers to provide a service, to work with customers to get a better result. It changes the nature of the transaction,” Roorda says.

TechnologyOne has developed a standard software solution to manage the complexity and volume of data. It evolves with global technology changes and caters for specific requirements through configuration.

It has a solution for water utilities called OneWater, which makes very sophisticated software easy to use because it is pre-configured for the water industry. Similarly, the OneEnergy solution, which is pre-configured for the energy sector, and a OneAirport solution for the airport industry.

TechnologyOne also has a large in-house R&D team to continually develop and improve its software. It consistently invests 20 per cent of revenue in R&D each year - far higher than the industry average of about 12 per cent.

It has also moved its software to a Software as a Service (SaaS) model.

This has involved a major investment in completely changing technology to give it the capacity to roll out continual improvements without adversely affecting customers.

That has helped TechnologyOne develop a reputation among customers as a safe pair of hands when it comes to predicting where the future is going to go, Roorda says.

“We are always planning what the next two or three generations of software look like in our roadmaps. We are constantly future proofing our software to deal with these very rapid changes."

Learn more about TechnologyOne's work with asset-intensive business at www.technologyonecorp.com/assets

Originally published in The Australian Financial Review on Wednesday 12 July

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