IT system integration key to meeting distribution management goals

Hahn Tram

Convergent Group

In today`s competitive environment, utilities increasingly focus on customer retention, cost reduction and competitive positioning. Decision making, from system planning to operations and maintenance, is no longer just about finding the most economical solution to meet engineering criteria. It also involves determining customer value expectations and finding the best business approach to meet them.

Similarly, the trouble outage management function of distribution management system (DMS) does more than support customer communication and trouble crew dispatch. It can also support business initiatives such as the following:

– Customer service differentiation and marketing-facilitates proactive commu- nication with customers. It can automate information such as outage occurrence and updates to estimated restoration time.

– Performance-based rates-awards the utility with higher revenue in return for guaranteed service reliability and quality. For accounting, DMS can provide required data and documentation. For business planning, DMS can facilitate historical data analysis for the setting and targeted marketing of performance based rates.

– Reliability-centered maintenance-maximizes the use of the utility`s maintenance budget by focusing on the equipment that needs maintenance most and more greatly impacts system reliability. The need depends on the operational, failure and outage history of equipment, which DMS can track.

– Value-based planning-does network planning to meet customer expectation of service quality in addition to energy demands. DMS can support reliability analysis, a cornerstone of value-based planning, with systematic records of operations and outage histories.

Although DMS can potentially deliver multiple business objectives, appropriate business processes must be in place to leverage DMS for different objectives. Therefore, the utility executive must decide which are the most important drivers to the company. It must then take a system approach to DMS that considers technologies, the business process implications and required cultural change. The business process consideration includes not only the process that DMS needs to support, but also the process needed to maintain DMS and its data.

Particularly as utilities undergo mergers, the combined company must make strategic decisions before designing DMS. The pre-merger utility most likely has different business drivers than the post-merger utility. Executives of the combined company need to unify drivers as a matter of priority. Goals in customer service, public and employee safety, energy delivery quality and so forth set the direction and priorities of DMS implementation.

Pre-merger companies also likely have different business processes, and executives need to make key decisions on whether and how to consolidate them. For example, centralized or decentralized dispatch operations, and whether common crews will do construction and maintenance, as well as trouble response, will affect the DMS architecture.

Time to market is often a key business driver. Instead of taking years to build a system that perfectly matches the utility`s environment and requirements, it often makes much better business sense to spend a year or less building a solution that meets most of the requirements and delivers most of the benefits. This is because both the business environments of utilities today and the information technologies are changing rapidly.

System integration

Whatever the business objectives may be, system integration is key to a successful DMS because the functions and the data the DMS uses and maintains involve many utility organizations (see figure). A DMS that integrates the data and departmental functions provides great business benefits, from reduced data costs through one-touch data maintenance to effective and consistent decision making enabled by more timely and accurate information.

DMS involves multiple information technologies, ranging from trouble-call entry to network operations and control. Therefore, DMS requires an overall IT architecture and integrated data model that support the different data requirements, rates and qualities of data flows among these systems.

Implementing an information system in the current atmosphere of high investor expectations often demands seemingly contradicting requirements and goals-designing a total, long-lasting business solution, while at the same time implementing it quickly.

DMS and the business processes must complement each other to achieve total and long-lasting business benefits. It must also be able to evolve with new technologies to avoid technology obsolescence. The architecture must have the flexibility to accommodate future new application functions and to avoid islands of automation as new systems are implemented.

On the other hand, the IT manager must look for ways to implement DMS more quickly than ever. Besides wanting a quick investment payback, time pressure from rapid advances in information technologies dictates a need to avoid technology obsolescence before system rollout. Particularly for utility mergers, implementation delays also mean lost momentum in consolidating the combined company`s IT strategy and processes.

Therefore, it is best to choose a flexible approach that adapts to different utility operations and reduces implementation time and costs. Kentucky Utilities, Alliant Energy and Cinergy successfully completed their integration projects using Convergent Group`s Solutions Workbench. Conceptually, this approach involves wrapping IT applications for engineering and operations of the energy delivery system with an integration manager that communicates with the utility`s back office, business-management applications to provide customer-driven business solutions.

Critical success factors for effective DMS deployment include:

– clearly identify and prioritize the business goals;

– align DMS with business processes;

– integrate DMS within the overall IT architecture; and

– strive for rapid implementation.

Time to market is crucial because the business environments of utilities and information technologies are changing rapidly. The rapid implementation approach is particularly useful to utilities in mergers as they are consolidating their business processes and developing an overall IT architecture for energy delivery.

Hahn Tram is an executive consultant in Convergent Group`s utility practice. Convergent Group is an Inglewood, Colo.-based systems integration and consulting firm.

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