BY VAIBHAV PARMAR AND LESLIE TURKSON, ACCENTURE
Communication networks in the utilities industry are under pressure. The sprawling collection of legacy nodes terminals, circuit, wide-area networks and Internet Protocol addresses must be coalesced so the entire enterprise can take advantage of data from the smart grid and smart devices. Harnessing data for valuable information and insights will put utilities in an optimal position with their business and residential customers and regulators.
Many utilities are refreshing their communications networks to address or stay ahead of external and internal pressures, including:
- New smart applications and devices;
- New business requirements and smart grid initiatives;
- Aging infrastructure and assets that are coming to end of life; and
- Changing regulatory requirements.
Utilities around the globe are at different points in the network life cycle. Some utilities have begun pragmatically planning the holistic network by applying new enterprise architectures to handle the demands applications such as analytics will make on communications networks. Others are holding vendor product evaluations and “Bake-Offs” to test network technology functionality against business and technical requirements. Some utilities have selected technologies and are beginning deployments for specific applications: 900 megahertz radio frequency (RF) mesh for smart meters, cellular for meter collectors, and Multiprotocol Label Switching (MPLS) for substations, video and wide-area connectivity.
Information technology departments are standardizing around information technology infrastructure library (ITIL), an industry-leading framework for technology operations processes to incorporate these processes into day-to-day business operations.
Utilities have a history of managing their communications networks; however, the all-roads-lead-to-Rome approach might not be the right path to transform the communications networks during the new demands. Accenture’s experience from designing and implementing networks in different industries finds that leading practices first take the view of the broader business strategic and planning level before implementations are made at the project level. There is risk of silo system selection and limited synergy when technologies are being implemented as strategies are developed and decisions are made. A governance model also is needed to vet requirements and aid in network life cycle decision-making, such as road maps tied closely to smart grid requirements with limited thought to linkages between the corporate network or to how these new communications paths will be managed.
To achieve a network that can transform a company for high performance, utility operators must:
Recognize network’s importance. The communications network no longer stands as behind-the-scenes infrastructure. A utility’s network is the foundation on which to build all corporate and transmission and distribution initiatives. It should be managed skillfully as a strategic asset. For example, smart devices are ramping into mainstream use at home and in business. These devices——from smart appliances to electric vehicles——will put new and increasing demands on a utility’s communications network. One regional U.S. utility forecasts that by 2020, its network traffic will have a 55 to 80 percent growth rate.
Across the technological landscape, new applications and services have emerged, such as substation automation and video and multimedia collaboration. It’s not limited to technology. New business models of mergers and acquisitions, multiservice electric and gas and renewable generation also will put new demands on the network.
For utility operators, all of these needs will be varied with unique performance requirements and differing endpoint devices that need connectivity (see Figure). It is critical to recognize the importance of the communications network and act on it now.
Gain executive commitment. Business plans and cost models are being created to raise senior management-level awareness and gain senior executive approvals for budgets. This will help with support and management challenges.
Silo systems will result in silo operations and limited visibility across the entire network landscape. The acquisition of new networking technologies requires the consolidation of newer assets with existing assets, and these assets often are not tracked in the same manner. In the U.S., with government agencies’ requiring utilities to account for critical cyberassets, utilities must look to implement an effective inventory management capability.
Plan for the entire life cycle. Utilities have an unprecedented opportunity. Aging assets are reaching end of life as the smart grid is coming online. Smart grid initiatives are driving network plans, road maps and technology decisions.
But it is essential for utilities to take a long-term view. Strategies must be developed to take the evolving needs of the marketplace into account, but also seek to capitalize on investments that can be shared and leveraged across the enterprise, such as using advanced metering infrastructure (AMI) networks to support distribution automation.
For example, a major North American utility has developed a 10-year strategy for its transmission and distribution organizations. In the short term, the utility will deploy Internet Protocol connectivity to substations. Over the midterm, it will design and deploy an AMI network. And in the long term——eight to 10 years——it will deploy and leverage private wireless broadband such as WiMAX or long-term evolution.
In addition to design and deployment activities, consideration and effort should be applied to creating a sustainable operations entity. Developing this operation’s capability becomes more important as common networks are used to transport operational data and information technology data. Information technology needs are different from operations technology needs, but many opportunities exist for sharing communications networks and operational frameworks. For example, some information technology and operations technology departments are agreeing to standardize operational procedures around ITIL.
Create network accountability. It’s important for one business unit within the organization to take ownership of the network and oversee its life cycle. This accountability can help address regulatory concerns regarding security. For example, increased pressures from government agencies and regulators require utilities to incorporate robust cybersecurity mechanisms but leave the interpretation of what and how the mechanisms are incorporated to each utility.
Some utilities have developed cybersecurity frameworks that include network layer authentication, authorization and access parameters. This has been critical for utilities that are revamping their network infrastructures with more advanced hardware and secure protocols.
For deregulated utilities, network communications decisions can help meet customers’ needs and provide better products to customers.
Eliminate barriers. Utility operators are meeting the needs of their communications networks. The selection of technology is occurring, such as RF mesh for smart meters, cellular for meter collectors, and MPLS for substations and video. New enterprise architectures are being designed to handle the demands that applications such as analytics will make on the communications.
But these examples of planning highlight the necessity to share knowledge between the information technology and operations technology organizations. As small-scale technologies are deployed to meet specific business needs, this is an opportunity to keep network complexity to a minimum.
Key considerations for transformation
Thanks to models and forecasts from Utilities Telecom Council, North IST and Accenture Smart Grid Telecom Accelerator, it is becoming easier to identify the emerging needs for the communications network. Still, doing it right and making the network a scalable and sustainable asset requires:
- A focus on the full life cycle of activities;
- Development of an enterprisewide strategy; and
- Collaboration across the information technology-operations technology landscape to share assets and operational responsibilities.
Maintaining the status quo of the communications network will not suffice as customers demand and adopt new in-home technologies. There is strong consumer awareness toward energy efficiencies and a desire to reduce their bills. This is an opportunity for utilities to provide more sophisticated, secure networks.
By making bold decisions and working together, the communications network will serve as the foundation for a utility’s journey to high performance.
Vaibhav Parmar and Leslie Turkson are managing directors in Accenture’s technology consulting group. Turkson is the global lead for the network service management practice and advises cross industries on network operations, network management and assurance and fulfillment implementations. Parmar helps utilities globally with their telecommunications, wireless technology and network operations strategies and is the wireless technology lead within Accenture’s technology consulting group. The authors acknowledge Ross Hendrix for his assistance with this article.
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