historically were slow to embrace innovative approaches or technology - PDF document

historically were slow to embrace innovative approaches or technology solutions are changing quickly, driven by the fundamentals of scarcity.” In fact, utilities, including water providers, are forecast to dramatically increase their analytics spending through 2020 (see Figure 2, “Utilities Forecast to Spend Big on Analytics”).That’s certainly true in Tuscany, the region of Italy widely regarded as the birthplace of the Renaissance. There, water utility Publiacqua SpA needed a rebirth of its own. At its founding in 2002, Publiacqua was tasked with managing the water service of 49 municipalities within four provinces of Tuscany. Today Publiacqua serves 1.3 million residents and is responsible for 9,700 kilometers (km) of aqueducts, a 6,800-km drinking-water network, 6,200-km sewer network, 129 purication plants, 112 water-treatment plants and two laboratories. SEPTEMBER 2014 © Copyright 2014. Forbes Insights.All rights reserved.ater, water everywhere? Not so much. Regions around the world are nding they must increasingly compete for water resources that are surprisingly nite. Analytics technology can help.Utilities have used limited-scope analytics tools to understand discrete operations, such as billing or payments. But water shortages and conservation are expanding the way water companies use these tools. “Utilities are paying more attention to how they can eciently use and deliver available water,” says Will Sarni, leader for enterprise water strategy at Deloitte Consulting. Customer expectations are expanding, too. Accustomed to transparent communications from private-sector businesses, they expect utilities to deliver real-time information and services. In response, utilities are deploying analytics solutions to gain deep insights into consumption patterns, operations and the health of facilities (see Figure 1, “High-Value Analytics for Water Utilities”). “Analytics are beginning to permeate almost every utility business process in the value chain,” says Kim Gaddy, a consultant and senior analyst at Utility Analytics Institute, a membership organization of utilities and solutions providers that focuses on analytics. “Data is a strategic asset, and more utilities are beginning to manage it as such.” “Water companies can use data to drive better, faster decisions,” adds Deloitte’s Sarni. “Utilities that Ancient Civilization Opts for Modern Water Services C77 M77 Y31 K16 C100 M94 Y0 K47 C100 M94 Y0 K47 Talent & HR FinanceTechnologyMarketing & SalesSmall/MidsizeManagement & Business OperationsC54 M84 Y20 K3 C85 M59 Y28 K28 C85 M59 Y28 K28 C78 M52 Y28 K6 C73 M19 Y40 K1 C65 M29 Y79 K22 C65 M29 Y79 K22 C61 M20 Y78 K3 C33 M32 Y72 K3 C33 M32 Y72 K3 C41 M44 Y77 K15 C15 M72 Y100 K26 C28 M88 Y70 K19 C48 M89 Y84 K49C48 M89 Y84 K49 C61 M66 Y61 K52 C15 M72 Y100 K26 C0 M60 Y100 K17 provides new networks, workforce and customers, improving both performance BY CHERYL D. KRIVDA FORBES INSIGHTS Business process ResultsSources: Deloitte Consulting, Utility Analytics InstituteInfrastructure managementWorkforce scheduling and managementCustomer relationship management and collectionsMore ecient preventative maintenance programGreater awareness of water-loss events and faster repairsOverall reduced leakageImmediate access to job information by eld techniciansImproved customer service levelsReduced payment delinquenciesDecreased collections costs Increased speed and transparency of communications about outages and timing of repairsEnhanced customer satisfaction and closer customer connectionImproved targeting of conservation campaigns to consumers and reduced water use High-Value Analytics for Water Utilities FORBES Integrated water services are regulated in Italy. Traditionally, the country created one water utility for most of its 8,000 municipalities. So when Italian regulators needed Publiacqua to modernize its water service, the utility decided to match the organization of leading European water companies. The goals: cost-eective delivery of pure drinking water, reliable sewer service and excellent customer experience. To transform itself into an ecient service provider, Publiacqua deployed integrated management solutions and analytics to provide a clear view of operations, nances and eld technicians. Publiacqua also streamlined business processes while improving insights into operations. This, in turn, helped improve business performance, reduce costs and raise customer satisfaction. Next, to help manage its diverse assets, Publiacqua implemented an enterprise resource planning (ERP) system in 2002. The utility then consolidated its server hardware, planned IT governance policies and chose additional applications to run on the servers supporting the ERP software. “We minimized our costs and created a homogeneous IT landscape,” says Publiacqua’s CIO, Luciano Caroti.A 2006 public equity oer infused the utility with new resources from Florentine Blue Waters. In 2009, tech-savvy executive Alberto Irace joined Publiacqua as CEO. “He said that water service is a primitive business,” Caroti recalls about Irace, “and that we must drive change using technology as a lever.” Publiacqua quickly launched more than 30 business-improvement projects, all built on the ERP-based infrastructure. Two projects were especially notable for reach and impact: a workforce-management and scheduling initiative and a business intelligence and analytics project that uses in-memory computing technology to deliver nearly instantaneous business insights. The workforce-management software connects Publiacqua’s 270 technicians and subcontractors with both each other and headquarters. Workers receive notications, work orders and updates in real time on their mobile devices, which enables quick and ecient service. Work schedules are optimized according to task urgency and technicians’ locations, availabilities and skills. Because workers share information on mobile devices, they can receive job instructions and document work-order status changes without going to the oce. Other benets include a 70 percent increase in workforce process speeds, a 30 percent decrease in the average technician response time and a two-times increase in repair process eciency. Improved scheduling has cut technician overtime by nearly 80 percent, and the price-for-service quotation process was shortened by 60 percent. “The benets of workforce management are quite impressive,” Caroti adds. MAKING SENSE OF BIG DATA As Publiacqua continued its modernization eorts, data volumes grew. With 1.5 million invoices generated annually and 60 million records the utility clearly needed a way to aggregate, report and share data. “We also had huge volumes of data we wanted to analyze,” Caroti says. An analytics solution was the answer. Publiacqua’s analytics tools run on an in-memory computing platform that supports real-time data access and processing. “With each new report we build, business users think of more information they’d like to have,” Caroti says. “The in-memory system quickly reloads data and consolidates all of our reporting, from nancial to operational.”“Data is a strategic asset, and more utilities are beginning to manage it as such.” —KIM GADDY, CONSULTANT AND SENIOR ANALYST, UTILITY ANALYTICS INSTITUTE FORBES INSIGHTSUtilities Forecast to Spend (annual global spending in US$ billions) Source: Courtney, Martin. “How Utilities Are Proting from Big Data Analytics.” 20142015201620172018201920204.03.02.01.51.0.05 FORBES “When water companies deployed technology in the past, they typically focused on treatment systems,” says Deloitte’s Sarni. “Now the development will be how utilities use data acquisition, analytics and visualization to change consumer behavior and make faster, smarter decisions about managing water.” Looking ahead, Publiacqua is considering a new customer relationship management project that will use analytics to enhance customer service. “We like to use technology to shake up people, create a sense of urgency to address our business needs and make changes that will improve service quality,” Caroti says. Originally, Caroti recalls, Publiacqua’s investors wondered why the utility was deploying an ERP solution to manage water services. “Now they understand,” he says. “The technology gives us the foundation for innovation, and analytics deliver the insight we need to make business decisions that put customers at the center of our company. Our upgraded IT landscape and revised processes have set the benchmark for utility companies in Italy.” And, for that matter, wherever water supplies are nite. Forbes Insights is the strategic research and thought leadership practice of Forbes Media, publisher of magazine and Forbes.com, whose combined media properties reach nearly 50 million business decision-makers worldwide on a monthly basis.DIRECTOR, NORTH AMERICAWriter: Cheryl D. Krivda is a freelance writer who explains the impact of technology on business performance for companies around the world. The analytics tools also share information with the workforce-management software. Publiacqua developed key performance indicators that monitor how well planners optimize personnel scheduling, workforce planning and technician activities. Reports are issued weekly to operations managers, who then make adjustments and optimize performance. Currently, a proof-of-concept project is underway to assess the value of predictive analytics. Publiacqua is linking its supervisory control and data acquisition (SCADA) systems with the corporate database to predict equipment and network failures. “What-if” analyses help the utility anticipate the consequences of dierent scenarios, then create action plans. The utility plans to use predictive analysis to stimulate various invoice and credit-management scenarios.“Before, we would create a model and wait three to six hours for it to run. We would get results, make changes to the parameters and run it again. It was very slow,” Caroti says. “Now, with in-memory computing, we can quickly analyze parameters, run multiple scenarios at once and analyze all of the data instead of just limited samples. The resulting insight helps us make better business decisions.”Experts say utilities like Publiacqua are just scratching the surface of how analytics can deliver value. Utilities can gain even more knowledge by including data from new sources, such as assets, energy, and customer use and billing. These can then be used to optimize critical systems and processes (see Figure 3, “Integrating Data Streams”). “Technology gives us the foundation for innovation and analytics deliver the insight we need to make business decisions that put customers at the center of our company.” —LUCIANO CAROTI, CIO, PUBLIACQUA SPA FORBES INSIGHTS“Embedded” energy eciency programs Water balance—leak loss detection Systems optimization for energy eciency Residential hot and cold water conservation SCADA* dataWater utility asset dataWater utility energy dataCustomer water dataCustomer energy data Integrating Data Streams*SCADA = supervisory control and data acquisitionSource: Loge, Frank and Ned Spang. “Advancing Water Utility Data Analytics for Energy Efciency.” UC Davis Center for Water-Energy Efciency, August 2013. http://goo.gl/1vrnWr Real-Time Businesses Make Forbes Insights interviewed Steve Lucas, President, Platform Solutions, SAP, about transforming business operations with real-time insights.What does it mean to be a real-time business?Being a real-time business means being aware of the key factors that will impact your decisions and being able to make a decision in the moment that matters. What if utilities companies today had instant information about consumption and weather patterns to make in-the-moment decisions about energy supply and demand? That’s when utilities can truly transform their processes, whether by avoiding outages or helping customers moderate their consumption through online modeling tools that use historical usage information. And that is why the SAP HANA platform exists: to enable companies to do business in the moment.Where do you see the most value for different organizations?The value comes from three main drivers. First, we reduce the complexity of the systems required to produce your existing results. This was one of the key motivations in designing SAP HANA: massive IT simplication. You can use the platform to feed data from all dierent sources into one system. Second, we enable agility by giving customers the ability to get real-time insight for decision-making. Third, we’re unlocking the true potential for innovation through new business processes and models: the real-time business innovation.Our SAP HANA platform not only can enable customers to make decisions for today, but it also provides a powerful predictive engine. Most companies make decisions by looking in the rearview mirror. But the rearview mirror is tiny compared with the windshield looking forward. Companies will start to build forward-looking decisions into their operating models.What is your best advice to companies that want to start their real-time It is not just about the technology. SAP HANA is extraordinarily innovative, but the rst thing we do is look at where the opportunities are to transform business processes. Then we spend time with customers rethinking how those processes are designed and how to remodel them. You have to start at zero: What would you do if you didn’t have to wait for information? If you don’t have to wait, there’s an opportunity for massive reinvention and value creation across industries.To learn more about using SAP Analytics, visit www.sap.com/analyticsTo learn more about SAP’s oerings for utilities, visit www.sap.com/utilities Sponsored bySTATEMENT C77 M77 Y31 K16 C100 M94 Y0 K47 C100 M94 Y0 K47 Talent & HR FinanceTechnologyMarketing & SalesSmall/MidsizeManagement & Business OperationsC54 M84 Y20 K3 C85 M59 Y28 K28 C85 M59 Y28 K28 C78 M52 Y28 K6 C73 M19 Y40 K1 C65 M29 Y79 K22 C65 M29 Y79 K22 C61 M20 Y78 K3 C33 M32 Y72 K3 C33 M32 Y72 K3 C41 M44 Y77 K15 C15 M72 Y100 K26 C28 M88 Y70 K19 C48 M89 Y84 K49C48 M89 Y84 K49 C61 M66 Y61 K52 C15 M72 Y100 K26 C0 M60 Y100 K17 “We’re true potential for innovation through new business processes and real-time business innovation.” —STEVE LUCAS, PRESIDENT, PLATFORM SOLUTIONS, SAP CASE STUDY