When the ageing workforce exits the utility industry and the energy industry is moving to digital, there will be significant consequences for the whole enterprise, writes Bryan Friehauf.
For decades, utilities have relied on the historical knowledge of a small group of experienced workers to meet the operational, maintenance and business needs of the entire organisation. These workers have a clear view of the entire organisation and its operations, helping them make quality decisions. However, as this workforce ages, utilities are put in a difficult position to maintain this level of operational quality.
According to an American Public Power Association (APPA) workforce survey, 55% of electric utilities reported that at least 20% of their workforce would be eligible to retire over the next 12 months. As the ageing workforce exits the utility industry, they are taking decades of highly specific insider insight with them.
Gaps in institutional knowledge can leave utilities with significant blind spots in their operations. Utilities need a focused and diligent effort to transfer knowledge from this outgoing workforce to current and incoming workforces. That’s where digital transformation comes in.
The move to digital in the energy industry has been prompted by a combination of necessity and opportunity. Competitive pressures, digital interconnectedness and unrelenting expectations to modernise have pushed the industry forward.
Simultaneously, the opportunities presented by digital transformation – increased efficiency, cost and resource savings, performance improvements and business agility – have pulled even the laggards toward the digital age. But the transition has not been smooth and uniform.
Utilities are at a historic point of change. The outgoing workforce is being replaced with increasingly digitally driven, data-intensive roles that require different skill sets and aptitudes needed to manage modern, more complex electrical systems. To continue to fulfil their mission – balancing reliability, renewable mandates and economic challenges – they need a better perspective of the entire enterprise that meets the evolved expectations of consumers and workers alike.
With these rapid changes, utility workers also need visibility into every aspect of the enterprise – from the field to operations to long-term business strategy. This visibility must be secured and verified, and data must be parsed, cross-analysed and applied to inform smart decisions on demand. The future utility requires a fully digital system.
Its important workers use tools to digitise and, hence, retain expert knowledge. Expert knowledge is often tacit and implicit, where not even the experts themselves fully know what they know and where their knowledge ends, and speculation begins. Capturing this inherent knowledge, developed after years on the job, through digital transformation is the best way to ensure it is passed down to the next generation of experts.
The retiring workers, through their historical knowledge, understand issues like malfunction modes, even if they’ve been able to avoid them, and can diagnose these malfunctions – something the younger workforce relies on data analytics for. Transferring this knowledge into data maintains the expertise and feeds models that learn to spot malfunctions before they occur, increasing the efficiency and effectiveness of performance maintenance.
Applying data science and breaking down silos
There are tools that provide data analytical diagnoses for every point in the past and prognoses for the future, and test expert knowledge through subsequent data analytics, extending knowledge through the feedback received from these tests.
Deploying a configuration tool that combines the strengths of expert systems with the strengths of data science provides the decades of system knowledge and highly scalable and repeatable systems that avoid human biases – ultimately leading to better decision making. Configuration tools capture several types of expert knowledge, including design and operation knowledge, to ensure younger workforces aren’t missing anything as their older peers retire.
Still, the promise of the digital experience often falls short, and significant, common obstacles remain across the industry. Traditionally, utilities have often maintained information in silos between the operations and business sides of the organisation because sharing that information was not thought to be a benefit.
When we entered the smart grid era, the silos began to break down as utilities saw the organisational benefit to overlaying usage patterns and billing data as a way to gather relevant insights to improve operations and service delivery. Through this evolution, utilities possessed several purpose-built systems for monitoring and managing their systems. But the silos persist.
The systems are often procured from different vendors, each storing data and communicating in different ways, which limits the ability to readily share and consume information. In addition, many systems are designed to be accessed only by certain workers. Utilities have found that integrating systems and sharing data securely are complex challenges.
Even the most aggressive and well-resourced initiatives can get bogged down by the technical intricacies that are revealed when attempting to unify systems. Taking data out of silos and training all workers to manage and share it eliminates historical knowledge gaps left behind by a retiring workforce and ensures the continuity of reliable services.
Perspective is also key to overcoming the obstacles that impede a utility’s journey toward digital transformation. “Perspective” describes both the literal way you see or interpret a situation, as well as the figurative way in which you approach it. Both have a direct impact on the decisions you make and the actions you take. For a utility to become a digital utility, it must change its perspective to overcome the challenges created by data proliferation.
Many utilities have traditionally been limited in their perspective, a situation created and enforced by legacy business structures and the systems they employ. Much like data silos, operation functions in utilities tend to be isolated from one another. The field, the boardroom, the billing office all operate in their respective bubbles – implementing processes and systems to support the needs of their function, choosing which information they share and when – without necessarily considering the needs of other departments.
While this is a natural outcome of system evolution, it runs counter to the goals of the successful digital enterprise, where data is shared and consumed widely across the organisation.
Utility personnel, from executives to field and office workers, present obstacles to digital transformation. Field workers, especially those close to retirement, may resist giving up habitual practices and processes and learning how to use new digital tools. Some may oppose the monitoring of their workdays in order to pass along process information to the incoming workforce. Others may dislike the idea of training new workers on systems they themselves don’t know.
Executive perceptions can also be an obstacle. It can be overwhelming for executives to push to overhaul an entire enterprise for a broad and seemingly ambiguous return on investment that can feel far off or even unattainable. Dependence on the familiar and fear of change can be significant barriers to progress. This fear of change can hobble utilities and prevent them from attaining the very real benefits of a unified digital enterprise.
Digital transformation is simultaneously disruptive and instructive – bringing a quick end to outdated practices and upending rigid structures, while ushering in a new industrial era where innovative technologies turn data into game-changing insights. Evidence of the benefits of making a shift to digital are tangible.
A convergence of technological advancements brings powerful new ways to overcome traditional obstacles and with emerging technologies such as AI, data fabric and the resulting ecosystem of systems, utilities can perceive and optimise the entire enterprise in previously unattainable ways.
The ability to interact situationally, holistically, actionably and timeously yields practical improvements to specific business case outcomes and contributes to evolving intelligence that delivers exponential value over time. Digitally transforming the business and the workforce creates long-term success for utilities.
About the author
Bryan Friehauf is the EVP and GM of Enterprise Software Solutions at Hitachi ABB Power Grids and has over 20 years of experience within the
energy and software industry. Previously, he was the general manager for GE’s Asset Management business. Friehauf holds a degree from the
University of Colorado, Boulder.