Managing the energy distribution enterprise involves overcoming challenges that are distinctly unique. Certainly the scale and dynamic nature of the asset infrastructure carries with it intrinsic barriers to efficiency. Coupled with the extrinsic burdens of regulatory scrutiny, mandated levels of service, and markets that are constantly in flux, the motivation for investing in asset management tools is unquestionable. These tools must help managers deploy and maintain capital intensive physical assets over vast geographical areas while providing some means of reacting to the unforeseen, such as natural disasters, widespread outages, and rate freezes of varying duration.

Regulatory and shareholder pressures create a need for clearly defined audit trails that justify deployment and investment decisions. With hundreds of millions of dollars at stake, the ability to make the right decisions at the right time rests squarely with ability to get accurate and timely information. Moreover, asset-related decisions directly impact system performance, reliability, capital budgets, safety, and customer satisfaction—the very criteria by which the overall performance of the management team responsible for the distribution network will be evaluated.

Much of the asset information needed to manage a distribution network is available in current systems. In many cases however, these isolated islands of data are unsynchronized and cannot communicate because of their disparate technologies. Under these circumstances, creating a 360 degree view of a distributions system’s asset lifecycle is a labor intensive effort. Collecting the data often depends on manual and error prone processes. Beyond the cost of data collection and coordination (think validation and synchronization across systems), a lack of automation renders the final output immediately out-of-date and ultimately less effective. Since better asset monitoring yields better asset management, any gaps in data collection and analysis place energy providers at risk.

For some companies, it may be that big-footprint integration systems have already been deployed thereby creating yet another system of record. While those systems may provide potential opportunities for efficient asset management, the mechanisms for data aggregation, validation, auditing, and reporting must still be built on a case by case basis. These “cast your net over everything” deployments provide significant data access but little in the way of actual operational insight. This strategy is typically IT-intensive as custom components and application program interfaces (APIs) must be developed. This technology-centric approach can prove adequate provided the right extensions are identified and deployed.

However, a business process-centric methodology provides an alternative approach. Its “mission critical” focus aims leveraging whatever technology infrastructure is already deployed while providing immediate, sophisticated business process level handling of asset data. By thinking in terms of the business process rather than in terms of databases, data access systems, and so on, managers can craft focused business solutions that meet immediate needs. Process level deployments can span systems and business units (as business processes always do). But more than that, a process level approach provides an inherent flexibility where business processes modeled with software can be phased in as a manager’s understanding of the business’ needs evolve.

Targeting Specific Problems: More Focus-Less Fluff
Many current operational support systems are decades-old and were never built to provide easy and open access to data. These systems range from expensive system integration deployments to second or third generation solutions purchased from a third party or proprietary systems developed in-house. Many of these continue to deliver value, but their limited integration hinders the kind of data aggregation that facilitates a strategic analysis of asset data. Even for managers without these technology issues, budget cuts and reorganization may have left many of asset management systems with data that are out of sync with actual field assets. In such cases backlogs and long paper trails make it difficult for managers to efficiently manage day-to-day operations.

At first glance, these problems seem daunting since these systems have been implemented with different base technologies and different data models. Certainly the means to integrate mainframe systems with Web based solutions is not obvious. One fear of undertaking such large scale projects to resolve these kinds of issues across the enterprise- is that the business requirements may be lost. As the focus shifts away from the business and towards the technology, months-long deployments could mean the trip down that high cost road will deliver too little too late. The harsh reality is that most business managers do not have the tools at hand to get the vital information they need when they want it.

Any solution designed to foster accurate and timely decision making by asset managers should map to existing business processes within the enterprise. It not only needs to model the existing business, but it should also be flexible enough to allow for business evolution without requiring the purchase of new business applications or IT infrastructure. Central to any investment in new technology will be whether or not that capital expenditure will provide the ability to retrieve data from any asset-related system “On Demand” in order to gain a complete picture of grid health. The solution cannot take years to complete. In fact, it should provide an agility and performance defined by its immediate results and ROI since energy companies need to deliver demonstrable results quarter by quarter.

Toward a 360º View: From the Field to Finance
Understanding how asset data is handled by different systems is the key to understanding grid health. Only through a 360 degree view of all assets do asset managers gain the ability to truly manage for efficiency.

An asset, like most things, has a lifecycle. It starts as a specification, becomes a material living in the shipyard, and when it gets installed, it becomes an asset. Tracking this lifecycle and understanding how this asset adds value to the grid can be a huge undertaking. As it moves through the lifecycle, it touches many disparate systems. It crosses functional groups, processes, and people. This cycle is a business process and the asset is the participant within this process.

Imagine for a second, the capability to manage this asset from inception to installation while providing deep insight into its health in relation to other assets, its financial benefit, and its impact on customers. It is through these views that assets become truly manageable. These views can provide valuable data on an asset’s revenue, investment, performance, and maintenance schedule and customer satisfaction. Some of the benefits of a 360 degree view are that they provided visibility and transparency into:

• Asset (or collection of assets)Investment over time vs. revenue
• O&M spend vs. performance improvements
• Cost of new services and lines
• Spending vs. budget on many different categories
• Labor vs. material costs per district by circuit
• investment, outages, performance by Customer type (Emergency, Critical care, Industrial, Commercial, Residential) and customer surveys too

Improved visibility and transparency allows managers to:

• Determine where to budget for the next 1-5 years
• Monitor improvements in SAIFI – SAIDI – CAIDI over time in support of new reporting mechanism
• Develop key performance indicators (KPI) by district
• Assign objectives based on KPIs and use hierarchical reporting to monitor performance

These types of views put valuable information in the hands of the people who need it to effectively manage the distribution network. Use the data that already exists locked within enterprise systems to improve your management of the grid. The four phase process outlined within this article has been used as a catalyst to better asset management and jump start performance gains while minimizing risk.

Phased Approach
When implementing a business process approach, senior managers need a strategy that quickly delivers results. Achieving immediate payback on an asset management solution means breaking the project down into manageable phases—with each phase delivering quantifiable returns on the investment. This approach reduces risk, reduces the internal and external resources required, reduces the impact on the organization, and reduces scope change and schedule creep. Such a phased approach provides a strategy to alleviate some of the pitfalls associated with traditional asset management solutions while providing more focused business process integration.

Phase I: Operational Support System Integration and synchronization business process
The goal of the first phase is to create a clear picture, definition, and status of the assets within a grid. Discrepancy auditing enables managers to quickly identify asset information discrepancies across WMS, MMS, GIS, and OMS. This auditing should verify data integrity or identify errors. By revealing discrepancy patterns, manager’s can discover trouble spots within the business process and take corrective action. This may mean reducing the manual data entry associated with a business process, changing workflows, enforcing best practice standards, or even changing the ways internal systems communicate. Ensuring data is consistent across the internal systems that track and report asset value is particularly critical for end of year valuation of deployed equipment. An auditing process provides a safety net for utilities whose business depends on the smooth operation of complex systems and business processes. The first phase should include auditing of the following critical systems:

• Customer Information System
• Geographic Information System
• Work Management System
• Outage Management System
• Geographical Information System

Figure 1: Auditing Business Process
An auditing business process should interact with critical systems, workflows, or functional business processes without the need to install another system of record.

Phase II: Capital budgeting, Reliability and System Performance
The goal of the second phase is to bring disparate data together from multiple operational support systems and deliver valuable information to determine the capital budget requirements for the complete distribution network. This set of business processes should provide the following information:

• Asset value and investment modeling
• Outage modeling

Asset investment modeling provides transparency and visibility into the relationship between investment and the revenue generated by deployed assets within specified geographical locations. This “On Demand” access to data about investment and revenue ratios per area enables managers to quickly evaluate asset acquisition and service costs by district, region, and customer type. With data connections spanning various business units, the modeling business process should correlate investment data across WMS, CIS, and MMS to provide a 360-degree view of installed assets. This knowledge of grid’s asset value (total investment and revenue by district, circuit, and customer type) provides the fundamental financial information needed for long term budgeting decisions.

In addition, an outage modeling process should provide the capability to correlate performance across stand alone systems such as, outage management, GIS, WMS, and CIS so that energy providers can monitor grid health as well as better evaluate the impact on customers. Since public utility commissions often review utility performance and reliability measures, managers need the ability to track outage conditions in order to deploy resources wisely and focus on trouble spots. While an outage management system may identify and locate the source of power outages with support from GIS, neither system supplies built in functionality for extracting information that spans multiple systems and business units. Yet it is the correlation of performance data with information contained in work management, materials management, customer surveys, CIS, and other related systems that provides a 3D view into an outage’s actual cause and effect. With access to historical data concerning costs, equipment age, past performance and customers involved in an outage, utilities find it easier to be proactive in their mitigation of risk.

Phase III: Material Management Integration
The goal of the third phase is to provide a clear view of discrepancies within the material management systems. Often when work orders are designed, the exact equipment specified in the order is not always what gets put on the truck at the materials management facility. A strong materials management process should integrate the Operational Support Systems with material management to provide checks and balances and align the equipment installed as an asset in the field with the design process. For utilities that have implemented ERP fully, this might not be an issue. Many utilities with ERP may have a seamless integration between these systems.

Phase IV: Facilities and Finance
The last phase of the four phased approach is the ability to tie in to the financial system. Since the financials make up the asset, it is critical that the finance process synchronizes the asset definition from the operational systems. Once the Operational Support Systems are integrated and synchronized, managers should monitor the business process’ performance for a period of time (1 year) to ensure a seamless checks and balances with material management. Naturally, this “watch dog” methodology should include automated auditing and alerts so bad data or inefficient business processes can be quickly identified.

Business process-centric integration provides a way to assure that assets represented in the current systems are in line with the actual condition of installed field assets. By synchronizing field and financial systems, the books can properly represent the network’s actual valuation. The knowledge of the grid’s asset value provides a critical aspect of the fundamental financials needed for long term budgeting decisions, accurate depreciation, and optimized future investments

Summary
Asset management is not found in a box and cannot happen overnight. In the ideal scenario, an executive-level commitment to comprehensive, accurate, and clear information will provide a mechanism for the organization to fulfill its obligation to customers, regulators, and shareholders. By approaching asset management with an eye toward the business process rather than the technology, energy distributors may achieve faster results at a lesser cost. Such an approach should require implementing standards-based and well-known hardware and software, but it does not necessarily have to involve IT-intensive and long running deployments. Either way, asset management solutions should provide in inherent flexibility that enables a phased approach. Perhaps recognizing the need for true asset management is the first phase.

Copyright 2004 CyberTech, Inc.