Paranoia: It'll keep you aliveAllen Greenberg | Sep 23, 2015
The president of SAP's Platform Solutions Group, Steve Lucas, is nothing like the stereotype of a utility executive. He's engaging, entertaining and enthusiastic. It's worked out nicely for him, because, as I said, he's the president of this big, global business unit and, well, most of the rest of us are not. None of this is to suggest everything (or anything) Lucas says is gospel. But there's no doubting his passion, and, if you're an electric power utility executive, he makes an awfully convincing case for his product line. I heard Lucas make his pitch at the SAP for Utilities conference in Huntington Beach earlier this month. He had lots to say to his audience, including:
The bottom line was, buy SAP's products or not, you'd be a fool to stand still - a deadly serious message offered in friendly, even fun terms. Suggesting pretty much the same thing a couple of hours earlier, Dr. Zarko Sumic, VP of energy and utilities at Gartner, flattered some of the same execs by first tipping his hat to what they do. The business of keeping the lights on, he said, is not merely essential, it is existential. The uplifting portion of his presentation ended right about then. A somber Sumic went on to declare that utilities' digital transformation can no longer wait, because the basic principles of running a utility simply no longer work, not with technology today that allows "prosumers" to generate their own power and sell it back the utility. The consumerization of energy technology, he told the audience, means change is imperative, as are speed and agility, echoing the advice they'd hear from Lucas and other SAPers again and again over the course of the two-day conference. Of course, there's not a lot new about the fact that we live in a digital world unless, sadly, you happen to run a utility, especially a smaller or perhaps municipally-owned one. There, money always has been and will long remain scarce. Even harder to find are boards ready and willing to give the utility executives who answer to them the elbow-room needed to stay anywhere near the cutting edge. The Great Recession didn't help, shriveling budgets, especially those earmarked for innovation. But we're out of those woods now and companies like SAP are once more hosting splashy conferences in sun-dappled locales that attract attendees from around the world. Peter Maier, SAP's GM of the Energy and Natural Resources Industries unit, thinks there's reason for optimism. "IT and the CIO are becoming part of the boardroom discussion again," he said, suggesting that utility CEOs are showing greater interest in modernization. What choice do they have, really, then to join what SAP is calling the emerging "digital energy network"? As SAP pointed out in a just-out booklet it distributed at the conference - it called it a roadmap to the digital energy network - industry boundaries are already blurred, thanks to companies like Google, Samsung and Tesla stepping into the ring, among others. Successful energy companies that have digitalized their operations, it said, outperform decentralized, small-scale commercial and private producers. They become more efficient and reliable operators, and can improve their profitability, thanks to access to the right information at the right time. Whether SAP is the right tech provider for your utility is a decision you'll have to make. But as Lucas pointed out, the winner of the latest Tour de France could never have done so on a bike that won the race 20 years ago. "The technology has advanced the sport beyond the ability of the athlete alone," he said. Indeed, it has. Consider ABB's just-announced innovation, a smart home system that allows you to use voice commands to control more than 60 home automation functions including lighting and heating. If your utility can't easily integrate that, you're doing something wrong.
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