The digital North Star for utilities

Planning for technology adoption in utilities involves never-ending cycles of regulation and change.

Saul Zambrano Saul Zambrano

Planning for technology adoption in utilities involves never-ending cycles of regulation and change, moving as inexorably as constellations do around the North Star.

I recently had the opportunity and privilege to support a field service webinar: “Lessons Learned from Technology Adoption During the Pandemic.” Everyone’s experience was largely similar across all industries: Throw away your five-year “North Star” development plans and get ready for a journey through constantly changing objectives and goals.

Or, as one of my fellow panelists described it: “A fire-drill of shifting priorities, unknown staffing levels and little-to-no time to fully understand the impact.”

For the utility sector, even with its well-earned reputation for responding well in emergency situations, this is no small task.

Application complexity

For utilities, technology-related change is not easy. For one, the sector is tightly aligned to regulatory oversight. And with this oversight comes “rate windows” that can range from three to five years long. And for each operating cycle, technology investments are implemented under the negotiated rules of the road with the regulators.

Anyone who has ever been a part of rate proceeding can attest that it feels a lot like going to the dentist for a major procedure. Consequently, once a technology capability is selected, utilities are loath to revisit the decision and will often live with nine-year adoption cycles.

Historically, this cycle of adoption worked for utilities as they were accustomed to long periods of few challenges to their business model. Fast forward to today and utilities are being pressed from all sides by change. From the rise of distributed energy resources (DERS), rising customer expectations, climate change, pandemics, and the transformation of IT practices towards agile and cloud practices, change is not only in the air, it is raining down. So how will utilities evolve to support their new operating environment?

Transition to agile

In the world of IT, the pursuit of agile development and management practices is one of the most common conversations. While there is plenty of thought leadership on this topic, one of the best pieces I came across was one written by McKinsey. In the article it identified five core IT shifts of scaled/agile organizations. I want to focus on the applications and services layer.

Historically, most utilities managed their application portfolios with low capability tools. This approach could be reasonably argued as fit-for-purpose in a low-change environment. In a high-change environment, this approach is not ideal. Here it is critical to have a demand management platform that can support you through the lifecycle process of managing both your application portfolio, as well as supporting services.

Application management and capability road-mapping are inter-connected processes. What if you could manage these with a clear view and understanding of what is being requested? And have a clear view of existing assets, personnel and a governance process that ensures alignment to your business requirements? This way you could easily meet your delivery goals (time and cost).

This is where an application portfolio management platform comes into play. You will be able to manage any application/agile enterprise development request with full visibility of portfolio impact, service resource availability and alignment to business unit goals in real time. With this capability, you will be able to manage technology decisions as the deployment cycles compress from nine years to 12-36 months. 

See how Software AG’s Alfabet can help by clicking below.