As utilities face mounting pressure on financial performance, safety and customer service delivery, IOT data could hold the key to operational transformation.
What exactly is the internet of things (IOT)? The utilities sector – especially electricity and gas providers – have been using a kind of IOT network concept all along. But it wasn’t really IOT because it didn’t involve the internet – it was an early version that used sensors to help understand networks. These sensors were monitored by teams who collected and analysed the information to make decisions. It was a manual, hands-on process.
When I worked for a power company, one of my employees, Stanley, had to make a daily decision on whether to keep crews back on overtime – an expensive option – or send them home.
To decide, he’d look at the weather forecast then stand outside and smell the air. If he could sense the threat of thunder and lightning, which would cause power failures, he would keep the crews back. He had been with the company for 40 years so he knew all the potential problems: where the wires were old and hadn’t recently been inspected, where the trees were recently trimmed. Based on his experience and knowledge, and some outside information including weather forecasts, he would make his decisions.
Stanley was taking all the information, organising it by location and analysing it in his head to reach a decision. And he was almost always right! One day he retired and all that knowledge simply walked out the door.
With the evolution of technology, IOT devices collect and analyse information from multiple locations for intelligent real-time decision-making.
In contrast, today’s utilities use geoanalytics – the portion of spatial analytics that replicates what human beings can do, but in a much more scientific, accurate and consistent way.
More and more sensors are being installed across networks every day.
One of the leading examples of this in the Asia-Pacific region is Singapore Power (SP), which has a comprehensive, real-time view of the entire network through data gathered from multiple sensors.
With a reputation for the highest levels of reliability in the world, SP integrated their Geographic Information System (GIS) with sensors, incorporating data from several sources, including emergency services and notifications from the public, all contributing to more effective decision-making.
Advanced metering infrastructure (AMI) transmits information about energy use from individual houses and commercial buildings to the power company.
What’s more important is the power of collective sensors – a conglomerate of meters and other inputs such as weather information and demographics. Put it all in a big GIS mixing bowl and that’s ‘analytics’.
This data reveals patterns of gas and electricity consumption and how it varies throughout the day. The notion of spatial analytics (or what we sometimes call geoanalytics) tells energy companies what they need to know in real time and helps them prepare for potential events.
Geoanalytics gives utilities the tools to determine vulnerabilities in advance.
The IOT, in effect, is an extension of what we have been doing for years; it’s substituting human observation and intuition with sensor information – and doing it in a much more scientific way.
Here are three key points for utilities to follow in order to leverage the power of IOT technology:
1. Put location first to maximise IOT insights
A utility’s performance can be measured by four key criteria: finance, customer satisfaction, compliance and safety. The challenge is balancing all these factors. Simplifying processes and improving workflows can save money and improve customer service. By eliminating the human factor and minimising mistakes, IOT data helps expedite decision-making, leading to lower costs, better service delivery, while increasing safety.
2. Use location-based analytics for growth strategy
Insights gained from location-based analytics give utilities the capacity to transform to new business models. For example, if a utility has enjoyed a long period of dominating a market and is suddenly challenged by a competitor, technology can be the key to better customer service. Utilities are capital intensive, investing a lot of money on infrastructure. The future of utilities is about adopting a more dynamic, responsive environment to meet public demand.
3. Keep pace with the rapid pace of technological innovation
Utilities need to put change management first and adapt to technology instead of passively expecting technology to change the business. Organisations need to be prepared to undergo transformation of processes and workflows to optimise new technology.
Don’t just keep doing things the same way, shoe-horning new technology into old ways of working: be prepared to change.
I think Steve jobs was a genius for his ability to transform his business. Who would have thought that a phone and a camera and music device could be incorporated into one device? That ground-breaking thinking transformed the Apple business model. The same thing is going to happen in the utilities sector: technology will transform both business and customer service outcomes.
Geoanalytics and big data is here. Now it’s up to utilities to change their culture and thinking from within to meet the demands of a location-enabled, sensor-connected future.
To find out more about how GIS technology can help transformation in your organisation, contact a specialist at Esri Australia on 1800 870 750 or send us an email.