The Digital Maturity Curve
There are three major stages on the path to becoming a digital utility:
DEFINING THE STAGES
Hover over each for more information.
DIGITIZATION
Analog
Awareness and Analysis
Business Intelligence
DIGITALIZATION
Network Communications
System Integration
Grid Edge
ENTERPRISE INTEGRATION
Unified Process Management
Optimized Business Delivery
Automated Innovation
Tracking Progress Across Utility Business Centers
Digitization
Digitization is the gathering and transferring of information from analog to a shareable digital form. Capturing asset, meter, and customer data digitally is the foundational building block for the modern utility.
Key systems that utilities are focusing on to capture the benefits of going digital.
Figure 1: Importance of applications for grid modernization efforts today
*Note: % of respondents who selected “4” or “5” on a scale of 1 to 5 (1=not important at all, 5=extremely important).
Utilities report that over the next 3-5 years Outage Management (OMS), Advanced Metering (AMI), and Geographic Information Systems (GIS) will see significant investment to build the foundation of the digital grid.
Figure 2: Importance of applications for grid modernization efforts in next 3 to 5 years
*Note: % of respondents who selected “4” or “5” on a scale of 1 to 5 (1=not important at all, 5=extremely important).
Where are utilities now on the pathway to digitization?
Figure 3: Status of digitization within areas of organizations
The majority of utilities will be in the digitization stage for at least the next three to five years. Two key technologies that utilities are focused on in this stage are cyber security and advanced metering infrastructure (AMI).
- As a result of the 2004 implementation of the North American Electric Reliability Corporation- Critical Infrastructure Protection (NERC-CIP) standard, cybersecurity has been a primary focus for utilities in their modernization efforts.
- Supported by the Smart Grid Investment Grants, part of the 2009 ARRA stimulus funding, AMI meter installations hit their peak in 2010 and 2011. However, it took until 2018 to reach more than 50% smart meter penetration.
Key indicators in core business areas at each step of digitization
Analog
Awareness and Analysis
Business Intelligence
Business Strategy and Management
There are no digital data professionals in the utility.
The utility creates a business unit that has data management as one of its key roles. This business unit and senior leadership create a digital or grid modernization roadmap.
Key roles for data management are filled at the utility. The digital roadmap is shared widely throughout all business units to create a vision for the organization that is focused on creating a new business model.
Grid Operations
Traditional grid and workforce management that takes place without advanced software systems to capture, manage, and store communication operational data. Legacy data gathering across discrete utility business units.
Creating proof of concepts and component testing for new sensors, switches, communication devices linked to outage management, smart meters, and distribution management.
Sensors or intelligent systems are deployed:
- Smart Metering
- Outage Management Systems (OMS)
- Geographic Information Systems
- Supervisory Control and Data Acquisition (SCADA)
IT and Communications Technology
Limited or no central data management system across discreet business units.
Identify software and solution providers to partner with to manage digital data.
Real-time information gathering can take place and there are software systems to manage the data.
Customer Delivery
Limited or no central data management system across discreet business units.
Identify software and solution providers to partner with to manage digital data.
Deployment of either a customer information system or customer relationship management system. The website is mobile ready and a mobile app is created.
Digitalization
Digitalization is the transformation of business processes by end-to-end sharing of information across the entire enterprise improving operations and effectiveness of customer delivery. This is the stage where innovative utilities will move beyond “smart” and where a true ROI begins to crystalize around the collection and use of data.
Improved decision making, better customer engagement, and increased security are some of the key benefits utilities expect to see as they digitalize.
Figure 4: Top benefits from digitalization
*Note: % of respondents who selected an option in his or her “top 3”
Where are utilities now on the pathway to digitalization?
Figure 5: Status of digitalizing applications within organizations
There are some utilities that have certain departments of their business and programs that are in the digitalization stage, but only a few can claim to have their entire enterprise at this level of maturity. Key milestones utilities can focus on to advance towards digitalization are:
- The deployment of advanced communication networks and edge computing. There is not a one-size fits all approach, but broadband field area networks can provide remote device control and drive real-time monitoring of distributed assets.
- The creation of a center of innovation, where utility leaders can work to better integrate key technologies like EVs, DER, and automation.
Key indicators in core business areas at each step of digitization
Network Communications
System Integration
Grid Edge
Business Strategy and Management
The utility identifies and creates key digital roles throughout the organization that promote cross-functional planning and operations.
Business units throughout the utility are easily able to share data, which improves decision making.
All key digital roles are filled. The digital strategic roadmap aligns with regulatory policy.
Grid Operations
Deployment of digital communication channels:
- Field Area Networks
- LPWA
- Cellular communications
Advanced grid management systems are deployed to optimize voltage control and improve fault detection:
- Distribution Management Systems
- Advanced Distributed Automation
Mobile workforce management tools are deployed to integrate and streamline grid operations and the workforce.
Distributed Energy Resources are integrated into resource planning.
Digital twins of key assets and the grid are created.
IT and Communications Technology
Discrete IT systems can share information. Utilities begin implementing analytics systems to maximize the value of the data they are gathering.
Software is fully deployed for field device control and real-time monitoring.
Moving key IT functions to the cloud to increase the speed at which backend infrastructure operates.
Customer Delivery
Coordination between marketing and customer experience develops by using data to improve customer communications.
Customer programs around demand response, energy efficiency, and DERs are integrated with data to begin the process of automation.
Marketing and CX have developed an omni-channel communication approach with the customer to ensure that the same message is delivered across channels at the same time.
Enterprise Integration
Enterprise Integration is centered around optimizing digital process and strategies to solve business challenges. The hallmarks of this stage are automation, innovation, and predicative and prescriptive use of data to meet business challenges.
Analytics are at the core of Enterprise Integration, leading to more control over the grid even as it becomes more decentralized and distributed. Utilities will also see improved resiliency and security.
Figure 6: Top benefits of digital enterprise integration
*Note: % of respondents who selected an option in his or her “top 3”
Where are utilities now on the pathway to enterprise integration?
Figure 7: Status of digital enterprise integration for areas within organizations
No utilities have reached the final stage of digital maturity, and even the most ambitious recognize that they are three to five years away from reaching this level of sophistication.
Key indicators in core business areas at each step of enterprise integration
Unified Process Management
Optimized Business Delivery
Automated Innovation
Business Strategy and Management
Analytics driven innovation is achieved by a collaborative top-down and bottom-up approach.
The digital strategic roadmap aligns has broken down silos to improve communications and decision-making between teams.
All facets of the triple bottom-line (Financial, Environmental, and Societal) are realized.
The enterprise has been flattened and empowered to make data driven decisions. A culture of innovation and collaboration is pervasive.
Grid Operations
Advanced grid management systems are deployed:
- Distributed Energy Resource Management System
- Automated Demand Response Management System
Dynamic grid management that is based on real data is available through end-to-end observability.
All systems are connected and communicating to integrate EVs, battery storage and renewable generation.
Enterprise view of assets is connected with workforce management software to optimize the proximity, status, safety and interrelationships of work on the grid.
AI and analytics are used to optimize the use of assets between and across supply chain participants. This leads to self-healing at the grid-level.
Predictive and prescriptive analytics is used in CAPEX and OPEX decision making for just in time asset management.
IT and Communications Technology
Full integration and control of data from generation to customer.
Predicative modeling and near real-time simulation that leads to optimization.
Enterprise-wide security implemented using AI and ML to lead advance threat detection and mitigation.
Automated AI and machine learning connect all IT systems to operational and customer facing systems.
Customer Delivery
Customer usage analysis is combined with real-time pricing signals at the device, and outage management at the residence.
The customer’s end-to-end energy usage and supply is integrated and automated.
360-degree view of the customer that optimizes delivery, digital communication, and customer experience.
Overcoming Challenges
Cost and budget limitations are the biggest challenges utilities face when moving up the digital maturity curve. Regulated utilities will be looking to get an ROI on modernization efforts, and deregulated enterprises will have to factor these costs into future pricing models.
Figure 8: Top challenges to digital modernization initiatives within organizations
*Note: % of respondents who selected an option in his or her “top 3”
While cost is a significant hurdle, 67% of utility respondents believe that digital modernization is crucial to their long-term financial success and viability.
Figure 9: Link between digital modernization strategy initiatives
*Note: % of respondents who selected “4” or “5” on a scale of 1 to 5 (1=least tightly linked, 5=most tightly linked).