Why Utilities Should Adopt a Programmatic Approach to Asset Lifecycle Management
Moving from a site-centric approach for managing utility assets to one that's programmatic will be key to modernizing aging infrastructure and driving digital transformation. Here's how utility companies can make the shift.
The challenges and opportunities of managing utility assets
Utility companies will need to deploy myriad IT assets into their operational technology (OT) environments — IoT sensors, next-generation firewalls, SCADA systems and more — as they become essential to digital transformation efforts in the coming years.
This transformation offers opportunities, like enhanced data analytics, improved security and real-time monitoring, but also presents concerns. Prolonged technology adoption cycles and the ongoing need to maintain legacy systems have historically made asset management difficult for utilities, which have treated each site or device refresh as an individual project. This has led to ad hoc, "snowflake" processes and designs that prevent the realization of economies of scale.
In addition to posing outage and security risks, that approach has made it difficult for technology leadership to secure the needed budget for large-scale refreshes.
Leadership often struggles to identify which assets need refreshing because they reside in hard-to-reach locations with scattered data.
Reactive maintenance has resulted in large quantities of end-of-life (EoL) and end-of-support (EoS) equipment negatively impacting user experience, hindering automation and introducing security risks.
The solution is a programmatic approach to asset lifecycle management that starts by centralizing asset data to gain a clear picture of where assets are in their lifecycles. From there, utilities can consolidate refresh schedules to roll out multiple technologies at sites based on a company's overall technology roadmap and business goals, reducing truck roles and complexity.
When companies embrace this approach, they can optimize capital planning and minimize the operational and security risks of running EoL or EoS systems.
Benefits of a programmatic approach
We see clients who adopt a programmatic approach to asset lifecycle management benefiting in several ways:
- Improved data visibility and quality: By taking a comprehensive, data-driven approach, utilities can gain better visibility into their IT and OT assets across the enterprise. This improved visibility helps ensure data quality and enables more informed decision-making, proactive planning and effective management of asset refresh cycles.
- Optimized budgeting and cost savings: A programmatic strategy allows utilities to align technology refresh cycles across multiple sites and asset types. This coordination can lead to cost savings by reducing truck rolls, eliminating redundant site visits and leveraging economies of scale. Additionally, utilities can avoid costly extended support contracts for EoL infrastructure.
- Enhanced security and compliance: With a programmatic approach, utilities can proactively identify and replace outdated systems running beyond their EoL or EoS periods. This mitigates the risks of security vulnerabilities, compliance issues and disruptions to critical operations.
- Operational efficiencies: By refreshing multiple technologies simultaneously (e.g. switches, routers, access points, firewalls, etc.) and standardizing on consistent infrastructure generations across substations, utilities can drive significant operational efficiencies. This includes easier maintenance, scalability for new applications and deployments, and improved grid reliability.
Implementing a programmatic lifecycle strategy
Programmatic asset lifecycle management is an incremental process that must consider people, processes and technology. The following steps will help companies ease into a programmatic lifecycle strategy:
- Executive buy-in and vision alignment: Utilities must clearly articulate the vision and benefits such as improved data visibility optimized budgeting enhanced security and operational efficiencies. Gaining executive sponsorship is often crucial for securing the necessary resources, overcoming organizational inertia and driving cultural change across the enterprise.
- Establish a cross-functional core team: Gather a self-contained team with the authority, knowledge and skillsets required to run an asset lifecycle management program and empower them to make critical decisions.
- Upfront planning and data assessment: This involves gaining a comprehensive understanding of the existing infrastructure landscape, identifying data gaps, and establishing processes for ongoing data collection and maintenance. A federated data strategy with co-ownership across business units is essential.
- Pilot programs to test and refine approach: Rather than attempting an enterprise-wide rollout, utilities can start with pilot programs to test and refine their programmatic approach. These pilots allow technology leadership to identify early wins, gather feedback and make necessary adjustments before scaling the program. For the initial pilots, utilities can target specific asset types, locations or use cases to showcase quick successes and build momentum.
- Scale the program across the enterprise: Once the programmatic lifecycle strategy has been validated through pilot programs, utilities can begin scaling it across the enterprise. This involves establishing consistent processes, procedures and accountability measures to ensure uniform execution. Change management and training initiatives equip teams with the necessary skills and mindset for the new approach which can help overcome cultural resistance.
Success stories and best practices
Utilities across the country are realizing the significant benefits of adopting a programmatic approach to asset lifecycle management.
For example, one of WWT's utility clients was able to refresh 120 devices across multiple substations in just six weeks by adopting a coordinated data-driven strategy. The keys to their success included proactive planning, maintaining a consistent technology base across sites and accounting for external factors (e.g., wildfire seasons) that could impact operations.
Another client achieved substantial cost savings and operational efficiencies by refreshing multiple technologies simultaneously during site upgrades. Instead of treating each device refresh as an individual project, they were able to upgrade switches, routers, access points and firewalls in a coordinated manner. This eliminated redundant truck rolls, reduced operational expenses from extended support contracts, and standardized their infrastructure across locations for easier maintenance and scalability.
Measuring success
Device counts, percentage of EoL assets and capital budget utilization are straightforward metrics that can demonstrate the value of asset lifecycle management efforts. However, leaders can analyze additional data to showcase benefits that might not be readily apparent.
- Compliance: Utilities can track metrics related to compliance with regulatory requirements (e.g. NERC CIP) and internal security policies. Effective lifecycle management should improve compliance scores by keeping systems patched and supported.
- Security risk reduction: Utilities can track metrics like mean-time-to-patch vulnerabilities and incident response readiness. These metrics will show how a programmatic approach to asset lifecycle management can reduce utilities' risk exposure.
- Operational reliability: Utilities can track uptime, mean-time-between-failures (MTBF) and related metrics for critical infrastructure and applications. Timely refreshes should improve reliability.
- Standardization and consistency: Utilities can measure consistency metrics like version/configuration drift across sites. Effective asset lifecycle management should lead to standardized tech stacks and, as a result, faster deployment of new applications and services.
- Productivity gains: Utilities can capture time and effort saved by operations teams from streamlined processes and automation versus manual, reactive management.
- Environmental impact: Utilities can track reductions in energy use, electronic waste and carbon emissions from optimized asset use.
It's important to remember that in addition to demonstrating success to key stakeholders, monitoring critical metrics is essential to identifying potential bottlenecks and driving continuous improvement.
Planning for the future
The future of utilities will involve deploying a far greater number of IT assets in OT environments. This type of digital transformation will be crucial to capitalize on current and emerging advances in artificial intelligence (AI) machine learning (ML) and the industrial internet of things (IIoT).
In addition to managing more assets, utilities should expect this future to include compressed refresh cycles and more frequent device updates.
While effective asset lifecycle management has always been beneficial, it can easily be argued that today it's a prerequisite for infrastructure modernization and successful digital transformation.
By adopting a programmatic approach to asset lifecycle management, utilities will be well-positioned to adapt to current and emerging energy trends.
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