Smart grids set to revolutionise energy companies - Part 3

Smart grids and telecommunications partnerships are rapidly transforming utility providers’ businesses. That spells new threats and challenges for CIOs — and new opportunities for those who step up to greet them

Results for next generation technology maturity from Logica's 2010 Australian Smart Grid Study. Maturity rating is out of a possible 5.

Results for next generation technology maturity from Logica's 2010 Australian Smart Grid Study. Maturity rating is out of a possible 5.

The CIO’s role in business transformation

Adding new layers for both improved communications and business-focused data analysis may add pressure to already pressured CIOs, but information executives aren’t the only ones staring down organisational change as a result of the industry’s new information-driven dynamics.

Many business and CIO respondents to Logica’s 2010 Smart Grid survey indicated they were using the smart grid inflection point as an opportunity to reconsider traditional reporting and advisory structures — particularly as they figure out how integrate often-separate smart grid deployment teams with the rest of the business.

The business sees this as an opportunity to refresh the workforce

“It’s generally accepted that we need to change our structure,” one respondent conceded. “You can’t have a separate IT group and engineering group, and bring them together and have a Smart Grid group. We need to get our electrical people IT savvy, especially in networking for example. Our trials all have multi-skilled teams.”

Another respondent lauded the newfound relevance of the ICT team within the business culture. “We have a good culture now,” the respondent offered. “In the past, [databases] were tarnished as mundane… Now we are in the exciting part of the business. We are the good news story and people flock to that so we are getting loads of people wanting to work in our division. It’s contagious. It’s an exciting time and we’re using it to transform our business and attract talent.”

This is a good time for CIOs, if they engage the business correctly, to become major players in the new structures. With the most mature information management skills in the business, CIOs will be in high demand as the smart grid revolution pushes business leaders to consolidate their internal capabilities and push for analytical and other capabilities that help make the most of the new investment.

Read Part 1 of Smart grids set to revolutionise energy companies.

“The business sees this as an opportunity to refresh the workforce,” says David Beaton, consulting principal for energy and utilities with Logica. “The smart ones are using the whole transformation of the industry to attract talent, pursuing new talent, pairing it with old talent, and are being seen within the sector as the innovators of the industry.

CIOs are going to become increasingly critical, and are going to have to become real strategic advisors to the business. The winner’s circle of CIOs will be at the executive table, seen as service providers and strategic advisors to the business.”

The customer imperative of smart grids

With carbon pricing, increasing energy prices and internal efficiencies around consumption all driving changes of behaviour at enterprises of all sizes, CIOs outside the energy sector may also want to tap into the industry’s changing dynamics.

New energy efficiencies won’t, after all, be a one-way street; newly optimised energy providers are likely to be receptive to working with customers on new energy efficiency initiatives that make best use of new smart grid and reporting systems.

Data centre managers that can more proactively monitor their energy footprint, and work with providers to smooth out peaks and troughs in demand, may find themselves cutting costs and improving predictability for energy suppliers that have been stung in the past by often-wild variations in wholesale energy pricing.

On cold days, for example, a reduction in data centre energy cooling consumption may help offset increases from other sectors as large numbers of consumers turn on their heaters.

Many enterprises, however, have very little idea of their actual energy usage until the bill arrives at the end of the month. CIOs within data centre-using organisations will find benefit in working with providers to learn more about their usage.

“I work with data centres on a daily basis and not many of them are measured,” says Christian Bertolini, national technical manager for smart and connected infrastructure with consultancy, Dimension Data. “If I go ask an IT manager ‘what’s your power consumption now?’ they probably wouldn’t be able to tell me,” he says. “But IT will play a larger and larger role in managing the energy consumption, and the data that comes from energy consumption across the board.

“There is an opportunity there, although from an industry point of view there is not enough will to take it.”

‘Will’ is the active word here: When it comes down to it, the solution to the challenges now facing utility companies is largely about willpower. There’s the need for business will to invest in massive new infrastructure; technical will to support it; and internal will to make the structural changes and improvements.

For their part, CIOs need to act on the will to take a leadership position in the integration of proactive energy management into everyday business processes.

Read Part 1 of Smart grids set to revolutionise energy companies. Read Part 2 - New partnerships, new skills.

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