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November 14, 2016
IT/OT integration—Moving from strategy to action
By: Stephanie Jamison

Distribution utilities generally agree that IT/OT integration is critical to the industry’s future. In fact, more than three-quarters1 of utility executives see IT/OT integration as highly important for delivering their future business requirements. And while there are different definitions about precisely what IT/OT integration entails, broadly speaking, we see it as bringing together data from operations, enterprise systems and external sources powered by advanced analytics. That convergence enables distribution utilities to achieve greater efficiency and effectiveness in their operations today and—more importantly—enable them to meet the future challenges of a rapidly changing energy landscape.

The majority of utilities understand the business logic behind the convergence of IT and OT. However, few to date have been able to translate that rationale into the business cases they need to take action. In fact, our Digitally Enabled Grid IT/OT survey suggests that only one in five utilities has a large-scale program currently underway. With nearly 40 percent of utilities still at the strategy stage of their IT/OT integration journey, it is clear that much more is needed to identify and articulate the business benefits they can gain. We see three main high-priority areas of business benefit for utilities: outage management, asset management and the integration of distributed generation.

Outage management is a significant cost driver and is still the number one driver of customer satisfaction for North American utilities. For many utilities, the process follows a number of stages in sequence, each requiring information hand-offs between control room, dispatchers and maintenance crews in the field. But bringing data and connectivity together can transform both the economic and wider social benefits of how outages are managed and restored. Smart metering, for example, can provide near real-time fault monitoring and identification. Greater situational awareness generated by richer fault data, coupled with information about crew location and availability, can deliver much more efficient deployment of resources and work scheduling. More sophisticated data can even analyse the best times to deploy crews in order to manage excessive overtime payments.

For asset management, IT/OT integration should make it possible to monitor asset health and performance in real time. Compared with the current reliance on largely historic data, advanced asset management capabilities support more effective engineering decision-making as well as enhanced planning and allocation of capital expenditure. And the latter will become increasingly important as regulatory funding models become increasingly performance and incentive-based.

The growth of distributed generation is creating an ever-expanding challenge for utilities. Increasing capacity of the network to accommodate rising distribution generation is costly. Many utilities are looking for digital approaches to enable advanced monitoring and control, and the integration of IT/OT data will be essential to support these initiatives.

With these major business benefits in mind, developing a business case for IT/OT integration should be much simpler. However, this integration is much more than a systems-driven program to be tackled from a strictly technology perspective. It’s a wider business transformation, and requires a holistic view of the entire business, encompassing organization, processes, skills and culture.

Above all, capturing the clear business benefits of IT/OT integration demands strong analytics capabilities. Utility executives are increasingly aware of this need, demonstrating their growing understanding of the critical role of analytics plays in future business performance. IT/OT integration is unquestionably a challenging prospect, but one that is foundational to operating the distribution business of tomorrow. And the time to move from theory to practice must be now.



Footnotes:
1 Accenture 2016 Utilities executives survey: The role of IT/OT integration in enabling the future distribution network


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