efficient asset management depends on IT

part one of three: Business Process Management, an antidote for aging assets

Utility companies are facing a problem of epic proportions. Assets are aging, the workforce is getting older and legacy IT systems are becoming an impediment to efficiency improvements.

Defusing this triple threat will require companies to adopt a three-pronged approach involving business process management (BPM), system consolidation and IT service management. In this three-part series, we will explore how utility companies can combine these three to operate more efficiently and profitably while addressing their aging infrastructure.

improving business processes

BPM enables utilities to capture, propagate and evolve asset management best practices while maintaining alignment between work processes and business goals. But BPM is just one antidote to the “triple” threat. Used by itself, it’s not a cure-all. It must be combined with system consolidation and IT service management.

At the ESRI Electric & Gas User Conference held in October 2005, Margaret E. “Lyn” McDermid, Dominion’s senior vice president of information technology and CIO, said, “Information technology is a key to future growth and will provide us with a sustainable competitive advantage.” The quest by utilities to improve shareholder and customer satisfaction has led many CIOs to reach the same conclusion, that almost all efforts to reduce the costs of managing assets depend on IT.

A Gartner survey of CIOs in December 2005 revealed that the top business issue in the utility industry was improving business processes. It is easy to see why. BPM enables utilities to capture, propagate and evolve asset management best practices while maintaining alignment between work processes and business goals.

For most companies, business processes driving work and asset management activities are the source of these competitive advantages: risk management, revenue generation and customer satisfaction. Standardized business processes allow management to successfully implement business transformation in an environment that may include workers acquired in a merger, workers near retirement and new workers regardless of age.

BPM also helps enforce a culture change by creating an adaptive enterprise where agility, flexibility and top-to-bottom alignment of work processes to business goals drive the utility’s operations. These processes need to be flexible so management can quickly respond to the next bump in the competitive landscape. Using standard work processes will drive desired behavior across the organization and promote the capture of asset knowledge held by many long-term employees.

Utility executives are depending on technology-based BPM to improve processes for managing assets that allow reduced staffing levels without affecting worker safety, system reliability or customer satisfaction. These standardized and enforced processes result in common work practices throughout the organization, regardless of region or business unit. BPM can yield an integrated set of applications that can be deployed in a rational way to improve work processes, meet regulatory requirements and reduce total cost of ownership of assets.

defining BPM

How is business process management defined? BPM and workflow are often used synonymously, and while they are related they are also distinctly different. BPM is a strategic activity for an organization looking to standardize and optimize business processes, whereas workflow is the IT solution to automate processes or the execution phase of business process management.

There are a number of core BPM capabilities that are individually strong. But when grouped together they form a solution that provides a powerful way to standardize, execute, enforce, test and continuously improve asset management business processes. (See sidebar page 59.)

What is the relationship between BPM and knowledge management? Research has shown the best way to capture a worker’s knowledge into some type of system is to transfer the knowledge to systems the worker already uses. Work and asset management systems hold job plans, operational steps, procedures, images, drawings and other documents. It is also the best place to put information required to perform a task that an experienced worker “just knows” how to do.

With workflow and BPM, workers can be guided through a “debrief” stage, where they can review existing job plans and procedures. They can look for tasks that aren’t defined sufficiently enough for those coming after them who would be trying to perform without the tacit knowledge of the experienced worker. Then the procedure can be flagged for additional input by a knowledgeable craftsman. The same is true for the application itself, since BPM tools allow guidance to be built in with online help or additional text to explain the next step.

Asset management tools employing BPM provide best practices to manage assets that enable the organization to safely, reliably and efficiently generate electricity. From condensate pumps to high voltage switchgear, from the corporate office to the back-office IT labs, BPM-enabled asset management supports the life cycle management of all assets critical to the business. This facilitates the visibility, control and standardization required to continuously improve today’s power generation and delivery environment.

Ron Wallace is director, industry marketing/utilities, at MRO Software. Contact Ron at ron.wallace@mro.com.

Eight core BPM capabilities

“- support for local process variations within a common process model

“- visual design tools

“- revision management of process definitions

“- web services interaction with other solutions

“- XML-based process and escalation definitions

“- event-driven user interface interactions

“- component-based definition of processes and sub-processes

“- single engine supporting push-based (workflow) and polling-based (escalation) processes

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