Utilities recognise the importance of innovation, but are they investing in the right skills and tools to support it? Christine Easterfield analyses market data to find out.

Without innovation, growth (or even mere survival) is a long slog of trying to expand market share. A recent survey commissioned by Utility Week (see 18th September issue) gathered views on the levels of innovation in utility companies, and while more than half of respondents felt enough was being invested in innovation, most respondents expressed concern about the availability of skills to support this innovation. So let’s unpick where the investment in tools and skills to support innovation is best directed.

Investment

Investment in innovation by utilities is reflected in market data. Innovation of all kinds involves adopting new technologies, not least acquiring specialist engineering software to design, manage and operate new tools and processes. Therefore tracking investment in this technical applications software is a useful proxy for monitoring levels of innovation.

Chart 1 shows that across all of northwest Europe, spending on design and engineering technical applications is significant across all industries.

Technical applications software is a wide-ranging group of tools and includes: computer-aided design, engineering, and manufacturing software; product life­cycle management software; building information modelling software; geographic information systems; and visualisation tools.

The architecture, engineering and construction (AEC) industry is far and away the largest investor in technical software, but this class includes many of the engineering service providers subcontracted by utilities. Even so, the utility sector itself is in the top five of industries spending on technical applications across northwest Europe.

In the UK the view is similar. Chart 2 shows the same information, but for the UK alone. Again, AEC is the biggest spender but the number two in the UK is utilities, with spending greater than aerospace and defence, automotive, and machinery. This is perhaps a reflection of the decline in engineering industries in the UK, but also of the level of investment in technical applications – and therefore, we can argue, in the support of a key part of innovation, namely, maintaining and improving assets, and asset management.

A different way of viewing this is to look at what proportion of value-add different industries spend on technical applications. Chart 3 takes the average proportion as 100 and shows the relative position of other industries. Utilities are just below that average, but ahead of the high tech and process/pharmaceutical industries. So, for example, the absolute spend by the automotive sector (chart 2) is less than the telecoms/utilities spend. But as a proportion of value-added, automotive spend (chart 3) is greater than telecoms/utilities. This indicates the larger role of technical applications software in automotive compared with telecoms/utilities.

Integration

Improving communications with customers is at the heart of many utility growth strategies. As a result, it drives much innovative change as utilities reach out to keep customers informed (and therefore safe), happy (and therefore unlikely to switch supplier), and up to date with relevant offers (and therefore likely to purchase).

When unplanned outages occur, as they inevitably do when winter storms hit, keeping customers informed about the progress towards getting the lights back on is one of the most effective ways to keep those same customers happy. Even if the power is not back on for several hours, having tools to know that and to share that information with customers enables utilities to make appropriate plans. If the message is “it might be anytime”, it might as well be never.

Those companies that are most effective at communicating with their customers are those that can draw together data from multiple sources – network status, weather, traffic density – and package it into useful messages that can be sent across a range of mediums (website, Twitter, local radio).

This sounds fine but often it means sharing data between parts of the company that have little connection – at least in terms of data sharing. The customer service desk may be taking calls about a break in service but is there the connection with the control room that enables operators to say the interruption is known about and being acted on? Or are they connected with the dispatch office that has routing information and a traffic data feed that can predict when the work crews will be on site to effect repairs?

Meter location

Communicating with customers is a big part of the smart meter rollout programme – an initiative that itself is driving much innovation around the world and one that relies on the use of technical applications software throughout the exercise. Making best use of the software tools involved in planning and management of the installation, so they can also support the operational phases, will help smooth the impact of this change – both for the utility and the customer.

So, geospatial or location intelligence tools used for route planning by the meter installation teams can be used to accurately record the location of the meter. This location can then be shared with the operational systems that support maintenance programmes and emergency call out and response.

Precise recording of the location of installed meters in this way ensures no meters are lost – and lost meters can lead to lost revenue. Accurate knowledge of where meters are positioned also means that when it comes to maintenance or repair, work crews can get straight to work. Knowing where the work crews are means you can inform the customer when work will be carried out. With field-based access to maintenance tracking software back in the office, work crews can make their updates on the spot and any gaps in billing resulting from the breakdown or the work done can be rectified straightaway.

Innovative ways of working are emerging all the time, in engineering, in changes in the way utilities’ businesses are run, in customer communication, and in the use of the software tools to support those activities. Collaboration across the organisation, essential for drawing together different data sources, is a necessary step towards success, and having teams in place with the skills to achieve that is important.

Christine Easterfield, principal consultant, utilities, Cambashi