Enterprise Operation Systems (EOS) Essential for survival in the dereguated marketplace

Enterprise Operation Systems (EOS)
Essential for survival in the dereguated marketplace

David Alston & Mark Watts
EPIC LLC
2330 Glendale Blvd
Sacramento, CA 95825
Telephone: (916) 569 3499
Fax: (916) 921 6620
E-mail: mark.watts@epicllc.com and david.alston@epicllc.com

Introduction
As many of you will be aware, governments around the world appear to have come to the conclusion that the cost of services provided by utilities to the public can be significantly reduced if a more competitive (utility) market can be created. Ultimately they envisage a market that allows the individual customer the right to purchase services from any provider they choose. Governments have used strategies such as deregulation, commercialisation, re-regulation, privatisation, as a means of creating a more competitive market. Call it what you will, the fundamental agent of change being utilised is re-structuring.

Whatever particular variant of re-structuring your organisation is going through, to be successful in the restructured market, Utilities must meet the challenge to improve services to customers and to reduce the cost of providing those services whilst at the same time increasing Return On Investment (ROI) to stakeholders. (A relatively simple objective, a decidedly more complex effort is required to achieve it.) The difficulties facing Utilities in meeting this challenge are many and varied. The challenge appears a paradox in itself; to improve service and reduce costs at the same time seems to be almost mutually exclusive.

The problem is further exacerbated when Government, driven by a political agenda, fixes prices, demands increased and more complex reporting mechanisms and still expects service to improve. Government has created new, or strengthened existing regulatory bodies, as a means of overseeing and measuring the (hopefully) desirable outcomes of re-structuring. Consistent with the objective to improve service at a reduced cost, these bodies (agencies) have imposed a broader, more complex, reporting regime on utilities. These reports are about measuring the utilities' performance in the area of customer service, not its financial performance. Reports such as:

SAIFI - System Average Interruption Frequency Index
SAIDI - System Average Interruption Duration Index
CAIDI - Customer Average Interruption Duration Index

have become the "lingua franca" of the utility market.

It is interesting to note that often we think only of "Regulatory Bodies" as originating only from Government. However, perhaps "Regulatory Bodies" should not be viewed from so narrow a perspective. It is arguable that for any Utility other "Regulatory Bodies" include the Stock Exchange, stakeholders/owners and ultimately, customers. Public Utilities are also subjected to more commercial scrutiny as privatization options are investigated and its primary stakeholder, the state, looks for an increased Return On (its) Investment (ROI).

Whether a Utility welcomes a change of ownership or not, the best strategy for any Utility (IOU or Public) is to be able to prove that they perform as well, or out perform, similar utilities, whether they be IOU or Public. This strategy enables the Utility to argue that it should remain under the same ownership if it chooses, whilst at the same time ensuring the best sales price is realized and that operational and structural changes are minimized, should a change of ownership eventuate.

All of these "Regulatory Bodies" are creating unprecedented demand on utilities for information. This information is often more complex than that ever required before and is intentionally designed to be used as a means of measuring one utility's performance against another's. The information required can be of a technical, financial or service nature, or a combination of all three. The significance of this information to a utility should not be underestimated. This sort of information will be an integral part of the process that:

values the utility,
increases or reduces its customer base,
decides its future ownership (public or private)
renews, or withdraws, its licence to operate.

In fact, the ability of a utility to provide the requested information, in a timely manner (as requested by the regulator) is often a performance indicator in itself.

In many countries, in particular the U.K., another factor that has increased the information output requirement of a utility is the public. Legislation that allows the public unprecedented access to the utilities' performance and operational data, has placed further strain on the reporting capabilities of utilities.

Responses
The re-structured Utilities, particularly in the UK, Australia and New Zealand where re-structuring is further advanced, have utilised outsourcing, staff reduction and product and service diversification, as strategies for success. In the United States, acquisition, merger and the increasing number of Investor Owned Utilities (IOUs) appear to be the immediate response to enable the successful positioning of organisations in the re-structured market.

Unfortunately, these strategies do not necessarily support all of the challenge faced. For example, staff reduction will lower costs and (most likely) improve ROI, but will it improve, or even maintain, existing service levels? Mergers and acquisitions promote the opportunity to diversify and potentially reduce costs, but often create a larger (regulatory) reporting requirement than existed before. It is self evident that these strategies can do little to reduce the number of service outages, customers impacted, and/or the duration of outages that are now the new "measuring stick" in the re-structured market.

What Utilities such as Melbourne, Australia based Yarra Valley Water and Energy Australia (Sydney) have realised is there is a need to be able to "work smarter". They have turned to Information Technology and the provision of more data and information from hitherto unconnected systems to empower their staff to do so.

Outage events
Known as an "outage", this key event dictates the level of service to a customer and therefore how favourable regulatory reports such as SAIDI and CAIFI appear. An "outage" is any situation where customers have lost supply due to a planned or unplanned interruption to the supply network.

A utility's performance is detrimentally impacted by the number of outages that take place in a specified period, the number of customers affected by those outages and the duration of them, individually and as an average.

In order to improve service performance, the utility must strive to reduce the:

frequency of outages;
number of customers that are impacted by an outage;
duration of individual outages;

if it is to be viewed as a competitive service provider in comparison with other suppliers.

One way to reduce all aspects of outage occurrences may best be described as the "traditional" hands on approach. Increasing network redundancy, the establishment of smaller shut off or isolation blocks, increased network re-routing capabilities and more and multi skilled field maintenance crews will certainly reduce all aspects of outage occurrences. The problem with this approach is that whilst it delivers one half of the solution to the cost equation, in that it improves service, it negates the desired result by increasing the cost required to deliver the service. This is particularly true in the area of increasing network redundancy etc as many utilities' are already seen to be over capitalised.

With the more "traditional" approaches often being denied to utilities, they have turned to Information Technology to provide the solution believing that, considering the significant investments already made in it, IT should be able to solve the problem. Unfortunately, in many cases IT has not been able meet the challenge anywhere near as well as expected, primarily due to the fact that operational level IT systems (applications) often exist as "islands of technology", that is there is a lack of integration.

A high level analysis of an (unplanned) outage event quickly identifies why integration of operational IT systems is essential if IT is solve the services to cost equation.

The figure below shows, at a high level, what procedures an organistaion will go through in the event of an unplanned outage. The left most column summarises the business function while the columns on the right show the Operational Level IT systems that will be utilised at some point in the process from start to finish.

Notification
The first stage of the process for an unplanned outage is the notification of it. The notification can be received in two ways, either a call from a member of the public (not necessarily a customer) through the customer system, or the annunciation of am alarm from the SCADA system.

Regardless of what first notifies the outage, in an un-integrated environment a SCADA system operator most likely will not know whether a Customer Service representative is aware of the problem and vice versa.

Verifcation
The next stage of the process is to verify that this is in fact a genuine, unplanned outage. For example, if only one customer in an area has called in that they have no power or water this may be due to the fact that the customer has been disconnected or because they failed to receive/read a planned outage notfication letter.

An abundance of phone calls to the customer service center is usually evidence enough of an unplanned outage. Should there be only the one complaint, access to Customer Information or Maintenance Management system can rapidly establish whether this is in fact a planned outage situation or whether the customer has been intentionally dis-connected.

Location
The next step is to accurately locate the location of the problem. Due to the flow on affects that happen in connected networks the ability to identify the exact location of the problem and to identify the equipment located there is not as easy as it sounds. The effect of an equipment failure may first be reported from a customer located many miles from the actual cause of the problem so that notification of the customer's address does not necesaarily go a long way towards locating the problem.

This is where the ability to access the Geographical Information System (GIS) becomes critical in reducing the outage parameters we need to. Integration of the GIS with the customer Service system can geographically represent to an operator what area(s) the calls are being received from so that he can gain a picture of ripple on effect is taking place. If the GIS system is integrated with the SCADA system, ie the Power or Water Network is over layed or contained in the GIS system, the operator can view the operational status of the network. Indication of open and closed switches or valves, equipment in alarm status, sub station location, pump and manhole location can all be displayed to the operator, in relation to the customers reporting loss of service.

Basically, if operational systems are integrated, the operator can automatically be presented with a total view of what is happening in the outage zone.

(Asecertain) Customers Impacted
The above integration of Customer Service, SCADA and GIS will rapidly enable the operator to ascertain the number of customers impacted. Due to demographics certain customers may not be aware that they no longer have supply eg they may not be home to report it but the integration of these systems will enable the operator to view all impacted customers.

At this stage, once the outage has been validated and the (general) area impacted located, a message may be placed on the Interactive Voice Recognition system. This message can inform customers of the outage, in general terms, and thereby reduce some of the demand on Customer Service operators with regard to the volume of calls they will receive.

Minimise Impact
As mentioned previously, many networks already have re- routing capabilities in place and if an operator has integrated viewing and control functions they can minimise the impact of the outage via control to field devices (if it exists). If this is obtainable, an important parameter in the performance equation has already been dramatically reduced, ie the number of customers impacted by the outage.

An integrated system will also highlight critical customers eg Hospitals, private dialysis machines etc in the affected area, allowing specific emergency actions to be undertaken at once, again reducing another important outage parameter; duration.

Assign Crew
Once located, a crew can be assigned to investigate/rectify the problem. Utilities have already understood the need for improved crew utilistation and the need to minimise outage durations further enforces this. An easy way to improve crew utilisation and minimise outage time is to ensure that the nearest available and appropriately skilled crew is assigned to the task.

Obviously integration with the maintenance management system is essential here both in terms of identifying an appropriate crew and locating the nearest crew. For example, it may be better to assign a crew undertaking routine maintenance at a site not far from the cause of the outage than to dispatch a crew from the (nearest) maintenance depot.

A maintenance management system that is integrated with the GIS will show the operator, at a glance, the location of all crews in the field, enable the operator to assess the capabilities of the crew and if appropriate assign them.

Having made the decision to assign the crew, integration with the Mobile Data Dispatch system enables the instruction to attend to the problem, as well as relevant information concerning the problem, to be electronically distributed to the crew, while in the field.

Inform
Upon arriving at the scene the crew can inform the operator of the initial assessment of the problem and the estimated time to reapair. If integrated, this information can be rapidly conveyed to the Customer Service system and the IVR system so that customers can be informed of progress and the estimated time for the restoration of services.

Isolate
In combination with the field crew and using the integrated capabilities of the GIS and SCADA systems, the operator can isolate the system for repair in a fashion that reduces the number of customers impacted by the outage.

Repair
Once safely isolated repairs can be effected. Via integration with Mobile Dispatch, Maintenance Management and SCADA systems any additional information required by the crew can be provided rapidly; thereby reducing the time to repair and the duration of the outage.

Inform
Once repairs are completed, the crew can inform the operator who in an integrated environment, can automatically update the Customer Service system and the IVR.

Restore
Having effected the repair, the crew and/or operator can restore supply to the affected area. At this stage the operational component of the restoration is complete. However, there are further "wash up" activities that can take place after this that can also deliver business benefit to the utility, if operational systems are integrated.

Cost
Obvioulsy there are costs associated with the repair and these need to be recorded for reporting and future analysis requirements. With an appropriately functional Maintenance Management system these costs can be held against the work order (and the asset) and be transferred electronically to the Finance system for accounting purposes. Similarly, if integrated with payroll systems, the hours worked by the crew members can be automatically transferred to the payroll time sheet system, thereby eliminating the need for employees to rekey the data and opening the possibility of automatic payroll generation.

Reporting
A significant advantage gained by having integrated operational systems lays in the generation of reports. If integration is in place, the service measurement type reports such as CAIDI and SAIDI can be automatically generated from data contained within the systems, thereby eliminating the considerable effort associated with producing them and ensuring their accuracy.

Outage Management
The IT System (application) that enables the Business Functions to be delivered and integration with the required IT applications is known as the Ouatege Management System (OMS).

"Enterprise" systems
"Enterprise" solutions were seen by many to be the panacea to all the difficulties that integration posed. Theoretically, "Enterprise" solutions required no integration, it was already there. Terms such as "Enterprise Resource Planning" (ERP), "Enterprise Resource Management" (ERA) and "Enterprise Asset Management" (EAM) have become synonymous with large scale IT application implementations.

These types of systems have promised much but what have they delivered and to whom?

This question appears particularly relevant to Utility Enterprises, where these packages have often been found to lack, or ignore, key operational applications and technologies that are critical to running the business. For example, it is hard to envisage a true Enterprise (wide) system for a Utility that did not encompass GIS, SCADA, Outage Management and Customer Information, Service and Billing systems, yet this is often the case.

The origin of these packages perhaps provides they key to understanding this "oversight". Industries that are removed from direct contact with the end user of their products, or are focussed upon their own internal controls and management, have little need for applications and technologies that interface directly with the customer.

The deficiencies in these "Enterprise" approaches become glaringly obvious when we analyse what IT can do to assist utilities to meet the objective of improved service, at lower cost and regulatory reporting requirements.

For example, if there is no SCADA or integration with SCADA and network management tools, the ability to identify the source of an outage is minimal as is the ability to respond rapidly to it. If there is no integration with the GIS, the ability to relate locationally to the problem and coupled with network management tools, the ability to assess downstream flow on effects is significantly impaired. Without integration of these "operational" type systems, the ability to utilise the available technology to reduce the number of outages, the duration of them and the number of customers impacted is significantly impaired. The end result being that customers receive a lower level of service than what could be delivered using the technology available.

Another example that brings the value of existing "Enterprise" solutions to utilities into question is the new regulatory reporting requirements. These requirements focus on the utility's performance in providing customer service. Typical regulatory reports such as SAIDI CAIFI etc., are focussed upon providing information as to what level of service customers are receiving from the utility. These reports require information that can for example, calculate and identify the customers impacted by an outage, the duration of the outage(s), the number of outages per customer and so on. Without integration with GIS, SCADA and Network Management tools, this information is hard to compile and extremely time consuming to do so.

Financial performance, whilst obviously still important, is not the primary concern of the regulator and nor should it be. The stakeholders of the utility are interested in this and in most cases it can be safely assumed that existing financial applications can provide it.

Enterprise Operatiaonal System (EOS)
Clearly, what is needed is a new type of "Enterprise" solution one that "provides a full suite of spatially enabled operational applications with a common seamless user interface into all the data contained in them". An Enterprise Operational System (EOS) staff to "work smarter" in the key areas of service that utilities are being measured in the restructured environment. An EOS is outward and forward looking towards the Utility's Networks and Customers.

The figure below (figure 2), represents the EOS solution.

Figure 2 EOS Solution

Achieving an EOS Solution
Typically, EOS solutions are delivered as a result of Integration with existing core Operational IT Applications such as SCADA and GIS. The integration approach is desirable as it:

Protects the organisation's current investment in IT systems
Allows organisations to select "best of breed" solutions
Allows the (future) replacement of core applications, if desired
Is driven by business, not technology
Minimises implementation risk and internal disruption.

YARRA VALLEY WATER's EOS IMPLEMENTATION

ENERGY AUSTRALIA's EOS IMPLEMENTATION