Fresh challenges require new alliances
The combination of new connected digital technologies with the requirement for the utilities industry to leverage more from existing asset bases is driving new types of collaboration and partnership agreements.
Utilities companies have long partnered with IT providers to introduce new technologies. In contrast, making use of Internet of Things (IoT) technologies requires a broader set of competences. This is because many of the physical assets, activities and people connected through the IoT have traditionally been outside the IT domain. To take one example, using the data from connected devices, engineers can now see what’s happening in an underground water-pumping station without having to dig a hole. Furthermore, that station can be viewed and monitored as just one part of a highly complex asset system, with a complete overview of processes from end to end. As a result, as well as IT and business process expertise, engineering knowledge is crucial in using IoT technologies to support digitally enabled working and decision-making.
At the same time, with spending limits set by regulators, companies are having to improve productivity and efficiency and reduce costs by leveraging more from their existing assets. To do this, they need to modernise and transform to make step changes in cost-effectiveness and operational efficiency. As well as a broader skills base, this requires vendors and partners who can work collaboratively and innovatively to meet the challenges their customers are facing – to lower costs, reduce outages and comply with regulators’ requirements while providing better customer service.
Focusing on outcomes
As a reflection of more innovative collaborations, there is a move across the industry towards new types of commercial model built around the outcomes that utilities companies need to achieve. Anglian Water, for example, has developed relationships with a group of alliance partners – of whom Atos is one – who provide a set services, from building infrastructure and installing networks to implementing the next generation of applications to support Anglian Water’s business. With a capital programme in place, these partners devise and deliver projects designed to achieve the company’s goals: enhancing customer experience while also meeting the demands of the market.
By drawing on a mix of industry, technology and engineering knowledge and expertise, supply chain partners can deliver added value by not just, for example, providing water pumps, but delivering end-to-end water services and managed solutions on the customer’s behalf, using data to manage networks more effectively, efficiently and sustainably. Scottish Water, for example, has appointed a partnership of suppliers to implement an energy management service across its network. Using IoT technologies and integrating data from internal and external sources, this service manages and monitors the network effectively and efficiently end to end, so that events can be predicted and problems prevented.
Sharing risks and rewards
Partnership agreements that share risk and reward with supply chain partners such as Atos, are becoming increasingly common. What is crucial is that partners understand and invest in the company’s overall strategy and can bring the right blend of domain and technological expertise. One challenge for any utility company is the long-term nature of infrastructure projects in comparison to the more rapidly changing digital and business landscape, which is why finding partners who can be agile is so key.
The focus for many companies in the industry is shifting towards how their supply chain can help them achieve transformation at the right speed with the right outcomes. These are exciting times in which partners need to cooperate, enabled and empowered by new relationships and technologies to find different ways of working in line with their customers’ vision and the utilities industry’s wider contest.
Digital Vision for Energy and Utilities
This article is part of the Atos Digital Vision for Energy and Utilities opinion paper. We explore the potential of digital transformation to help energy and utilities companies power a new era for UK businesses and homes, amid profound and rapid change across the industry.