By Mark Knight
April 1, 2002 — In a previous article, I wrote that the move from a regulated environment to a deregulated environment can cause problems due to conflicts in access to data by regulated and unregulated affiliates.
I also wrote that componentization through integration technology, while making it easier to unbundled businesses from a system perspective, does nothing to avoid problems with data flows between affiliates. So what can we do to avoid some of these problems?
First and foremost we need to understand our data. There are many dangers of not understanding where data is kept in the organization, where the systems of record are for all data, and how the data flows through the organization. These problems include undocumented processes that move the data between departments or that modify the data, such as Joe who hands you the floppy disk every second Thursday of the month, or Bob who emails the daily reads to you usually by 10 am but not always. And it always causes problems when they’re sick. The problems may also include replicated data because of data being stored in multiple locations, that are often not being backed up and where the potential for inconsistent data exists.
These situations can also create instances where delays are caused by delays in accessing data and where it is difficult to report on information whose components are split across different systems. I mentioned earlier that there may be undocumented processes. These can occur where the focus of attention has been in other areas for example when implementing a new system. The focus of attention is often on input data arriving in the correct format in a timely manner.
There may not be enough analysis of how the data arrived as that input. Undocumented processes are often manual processes performed by personnel who are unaware that they form a vital link in an information chain. By reviewing the flow of data in the organization you can mitigate these risks by documenting the flows.
In doing this the objective is to remove the risks and inefficiencies that may exist and to create a higher degree of centralization of critical data in order that opportunities can be taken to improve the use of data. These objectives should be to improve control and access to data while also improving the timeliness of data provision. By centralizing elements of data it will also be possible to compare and combine data from different sources and to create valuable new information.
We also seek to identify missing data through automated checks and to improve the consistency checks that may need to be made between different data. It also creates the ability to centralize backups of the data, improving the security of data and removing the duplication of effort for data that was being backed up in multiple locations. Centralization also creates the ability to apply consistent auditing standards to the data and to automate manual processes.
There are many areas within the utility that have been impacted by regulatory changes and the introduction of new systems, and the processes that use the data from these systems. Some of the areas that have been impacted are metering, settlements, billing, forecasting and trading & risk management.
How easy is it, for example, to identify all your open positions when you trade multiple commodities in multiple markets when you do not have the critical data centrally coordinated in order to avoid unnecessary hedging or to be able to take advantage of arbitrage opportunities?
And then there’s the small matter of mergers and acquisitions where processes, systems and often regulations and different yet data management needs to be reconciled to a single enterprise standard. This tape will self destruct in 5 seconds . . . .
Mark Knight has been involved in electricity market restructuring since 1989, helping companies to adapt to competitive, regulatory and data management pressures caused by deregulation. Formerly Knight worked for Cap Gemini Ernst & Young, Logica, and Andersen Consulting. For more information contact Knight at email@example.com
© Copyright 2002 Mark Knight. All rights reserved.