It’s no longer business as usual in the utility sector. The pandemic and its economic and operational consequences have made asset management more essential than ever before. In a recent panel discussion hosted by Zpryme, Boudewijn Neijens, Copperleaf CMO, was joined by Ricardo da Silva, VP Strategic Operations at New York Power Authority (NYPA), to discuss the importance of good asset management in uncertain times. They discuss how understanding asset risk and the full lifecycle consequences of decisions is becoming increasingly important, and how digital transformation can support utilities on their asset management journeys.
The Transformation of Asset Management
NYPA, the largest state-owned public power utility in the US, is boldly working towards becoming the first end-to-end digital utility. Ricardo explained how asset management for NYPA has changed as part of this goal, stating, “The key to making better decisions is creating a culture of digital transformation and making sure people are part of the solution. We need to empower our workforce, so that people understand their roles, are trained, and have the skill sets to use the digital tools made available.”
The key to making better decisions is creating a culture of digital transformation and making sure people are part of the solution.
Boudewijn noted that there are two major reasons for the digital transformation in utilities. First, over half of ISO-certified organizations are utilities because they understand the need for rigorous and methodical processes. “A digital system will reinforce behaviors and processes, which helps with compliance.” Additionally, regulators in North America are shifting to performance-based regulation, forcing utilities to become more sophisticated in their decision-making processes. “This means you have to start monitoring not only your assets, but how your decisions about these assets affect your organization and its stakeholders. And that is extremely difficult to do by hand,” explained Boudewijn.
Ricardo expanded on this topic, sharing that asset monitoring and analytics are critical in achieving operational excellence for NYPA. “No organization has unlimited budgets or resources. We use asset monitoring technology and analytics so that as we put together our asset management plans, we have a more informed view of where we need to devote those limited resources.”
Decision Making and Planning in Uncertain Times
Asked how the industry has handled the challenges and disruptions caused by COVID-19, Boudewijn answered, “I’ve been impressed by how resilient and well prepared utilities have been in responding to such a low probability, high impact event.” However, how the pandemic will affect operations in the long term is still unknown. “Over the past 8 months, a lot of maintenance work and asset replacements have been deferred and we don’t know the consequences of those deferrals. Asset models and what-if scenarios are needed to figure out how much work we can defer without it becoming a huge problem in the future.”
Asset management has prepared NYPA for the current crisis and beyond. In late 2019, NYPA developed a variety of scenarios to prepare for a pandemic-like situation—proving that what may seem unrealistic one day might turn out to be reality. According to Ricardo, “Remaining agile and having the systems and tools in place are key. Regardless of what future event occurs, we’ll be better prepared to handle it and make decisions around it.”
Challenges for Transformation
Boudewijn noted that a perceived lack of data is a challenge to the digital transformation of asset management. “Sometimes we hear ‘we can’t improve until we have better data’. However, asset management is about processes, and those can be put in place as a starting point.” Data can enrich these processes over time, but utilities shouldn’t let a lack of data paralyze them into inaction.
Leadership commitment is also needed to drive alignment of strategic objectives and adoption of technology. “Don’t do it alone. Look to others to collaborate, share ideas, and challenge each other to ensure the best decisions are being made,” commented Ricardo. “Change management takes focus and effort to achieve.”
Sometimes we hear ‘we can’t improve until we have better data’. However, asset management is about processes, and those can be put in place as a starting point. Data can enrich these processes over time, but utilities shouldn’t let a lack of data paralyze them into inaction.
The Shift to Enterprise-wide Decision Making
To navigate the challenges ahead, utilities can no longer afford to operate in silos and use different decision-making practices across the organization. “Moving away from ‘business as usual’ means that risk-based decision making will no longer cut it—you need value-based decision making,” explained Boudewijn. "An enterprise-wide value framework can help you determine what you value as an organization and provides a consistent means to value and compare even the most dissimilar investments across organizational boundaries."
To watch an entertaining recap of the webinar, check out this animated video.
Watch the full panel discussion here:
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