The Changing Nature of Utilities
The utility sector is undergoing transformational changes which are challenging the traditional business model of distribution, metering and billing. As the utilities sector transforms, it will need to move towards one that is capable of adapting to constantly changing stakeholder requirements. There is a clear shift from a focus purely on selling energy to customers, to selling energy efficiency or home services.
Mature markets have a flat or declining demand, opportunities exist for utilities in new developments such as smart technology and new distribution solutions. These will offer additional non regulated revenue streams, and acquiring or developing capabilities in areas such as data analytics will provide a catalyst for new customer solutions and help drive operational improvements. These opportunities will require a foundational platform within the utility of capability uplift in people, process and technology.
Why SMAaRT Utility?
Utilities are changing significantly
The top risks facing Australian utilities companies are :
- Compliance and regulation
- Commodity price volatility and access to competitively priced long-term fuel supplies
- Political intervention in power and utilities markets
- Uncertainty in climate policy and carbon pricing
- Significant shifts in the cost and accessibility of capital
- Capital project execution
- Economic shocks and resulting short-term energy demand shocks
- Ageing generation and network infrastructure
- Managing planning and public acceptance
To add further pressures to this, globally, many utilities feel they are carrying a relentless and increasing regulatory burden. In established markets like Australia, these increased compliance and regulations are being driven by market reforms and a move toward competition in all aspects of utility operations.
In Australia, regulatory rules have increased from about 600 pages to about 2,000 pages in the past 7-8 years, and have been subject to around 100 rules changes over that time. Much of the change is due to the regulations catching up with the increased complexity of the industry, but there is certainly work to be done in simplifying the regime.
Utility Leaders need to be aware of these risks and develop appropriate mitigation strategies through organisational changes focusing on enterprise asset management strategies, aligning business models to ISO55001 and deliberative customer engagement.
Revisiting strategic drivers and alignment to Asset Management maturity models is fast becoming the go to response for utility leaders in understanding the performance levers of their network. Incorporating these changes with transformation programs of work is fast becoming the method to demonstrate to regulators the prudence of asset investment and the efficient delivery of that investment to manage the network. The focus of these transformations are driving uplifts in people and process and managing the integration and convergence of IT/OT technology platforms to meet these strategic outcomes.
Our mission is to support the Australian market through reducing the cost and risk of the utility transformation initiatives required to manage these risks.
We believe success comes from implementing strategic objectives through aligned transformational delivery outcomes. As a result we have invested in the development of a capability delivery model to support business transformation implementations with a holistic focus on people, process and technology .
CountERPart Solutions are experts in Business Transformation implementations with over 20 years of delivery success across multiple industries.
What is SMAaRT Utility?
It's a Strategy Management, Alignment and Realisation Tool (SMAaRT) which utilises a best practice project capability model that has been derived from optimised practices in manufacturing, mining, utilities, health, councils and major asset intensive organisations.
This transformation capability model leverages CountERPart Solution’s expertise and experience in strategic asset planning, asset management, reliability centred maintenance regimes, works management, project delivery, optimised scheduling, metering and billing, meter to cash processes, operational technology management, performance management and assurance across the entire utility, financial management, corporate services management and reporting required as the asset owner.
SMAaRT aligns strategic objectives identified by the customer and maps them to target state project capabilities and outcomes. This allows the customer to select and understand the practices they want to adopt in their specific project target state.
SMAaRT provides the customer with a clear understanding of benefits that can be derived from the adoption of best practice and establishes a framework for business transformation initiatives to align to the strategic objectives.
SMAaRT provides the benefit of fast-tracking the development of a business transformation program and validates prudency of their investment.
How SMAaRT Utility works?
The Strategy Management, Alignment and Realisation Tool (SMAaRT) utilises a best practice utility capability model to reference a target state. This provides the customer with a detailed view of what “good” looks like. It allows the customer to review their Target State through the lens of key business value streams defined in the model. The customer can then identify the extent to which they want to effect a transformation.
The customer can leverage the model’s direct line-of-sight from transformational value stream to performance measures and metrics it wants to focus on. This allows the customer to tailor the transformation initiatives required to their budget and strategic objectives.
By aligning strategic objectives identified by the customer to the model and mapping them to target state utility capabilities and outcomes, the Executive team understand the performance levers of the transformation initiatives and allows them to select and understand the practices they want to adopt in their specific utility target state.
By utilising the SMAaRT model customer’s have a clear understanding of benefits that can be derived from the adoption of best practice and the cost of adoption of the model frameworks for business transformation initiatives to stand up Business Transformation Programs rapidly.
Executives of the new Utility business will need to win the hearts and minds of a group of dedicated followers, who are willing to take significant risks (career or financial) to prove the new business model.
The future is likely to be won by businesses with the right mix of centralised and decentralised infrastructure and those with business models which enable resources to be shared in local areas through interconnected infrastructure and digital platforms.
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