4 minute read 7 Jun 2018
woman managing data large interactive screen

Why digital asset management is a fundamental driver of utility value

By

Igor Sadimenko

EY Asia Pacific Power & Utilities EAM Leader

Business strategy professional. Transformation leader.

4 minute read 7 Jun 2018
Related topics AI Blockchain Digital Disruption

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Digital disruption is changing how energy is produced and used, shouldn’t it also disrupt how we manage energy assets?

Who would have predicted that the fastest growing taxi company in the world would own no taxis? Or that one of the largest hotel groups would own no hotels? Can we also envisage a future in which power and utility (P&U) companies own no generation and supply assets? After all, there are many examples of P&U organizations moving toward a new value chain, augmented and interconnected by digital technologies – from customer-owned solar installations that forsake normal grid utilization, to electric vehicles that power residential homes.

In reality, the days of utilities doing away with all their service delivery assets aren’t upon us yet – and clever money says they may never be, at least in my lifetime. What is abundantly clear however, is that digital disruption is changing how we produce and use energy. So, shouldn’t it also disrupt how we manage energy assets?

Information is king but people bring it to life

There is no doubt that the pressure is on for utilities to do more with less in a bid to balance cost, risk and performance. But I believe the asset management capability needed to achieve the necessary optimization is often overlooked when, in fact, its need is far greater than ever before.

Today, utilities are often data rich but intelligence poor, collating vast amounts of asset data in asset registers, without necessarily linking it back to an asset strategy designed to support long-term business goals. This takes its toll on utility asset decision-making, often resulting in lackluster return on (asset) investment and value leakage. In our report, Maximizing asset performance in a digital world, one in three P&U executives placed data collection and confidence in asset condition data in their top three challenges.

By its very nature, digital asset management depends on data and the insight that can be gleaned from it. Thankfully, digital disruption – digitization and machine learning in particular – is transforming how asset data is collected, collated and analyzed:

  • It gives P&U executives access to vital information to manage and exploit asset portfolios better, gain greater control of costs, reduce risks and improve customer and shareholder value.
  • It provides a foundation for utilities to reinvent asset management, run operations in a completely new way, and develop new more customer-centric business models.

Leading enterprise asset management involves overlaying technology solutions with strategic decision support, until an asset management organization is born, with data at its very core. It’s the human/technology interconnection that opens the organization up to a new world of educated and more effective business decisions.

The intangible corporate benefits of digital asset management are not to be overlooked: from energizing innovation right across the enterprise to demonstrating a commitment to revitalized shareholder, employee and customer interactions.

Delivering on strategic goals and objectives

Digital disruption presents utilities with an opportunity to examine and refine their asset management capabilities and leverage a wide array of enabling technologies that will create value and help them perform. I believe the solution hinges on utilities taking a fresh approach to people, processes and technology. Here’s how P&U companies can develop successful digital asset management systems:

  • Asset, information and technology strategies should describe the processes, systems and tools that monitor and optimize the performance of assets across their lifecycle to support specific corporate objectives and goals.
  • Most importantly, asset excellence must be prioritized on the board agenda to enable the appropriate cultural, strategy and policy changes across the business.

Disruptor, not disrupted

Those that embrace digital asset management as a gateway to better decision making and a fundamental driver of utility value will gain competitive advantage and outperform their peers.

Those that don’t face a widening capability and stakeholder expectation gap on performance, service and cost, because with disruption also come new entrants – often from other sectors – that are tech savvy, agile, aggressive and cash rich.

We’ve seen businesses with no physical assets exploit the value of data to disrupt entire sectors in just a few years. For asset intensive P&U businesses, harnessing the power of data and asset management has never been more important to reinvent themselves as a disruptor, not the disrupted.

Summary

Digital asset management will help P&U companies compete and generate more value from their assets.

About this article

By

Igor Sadimenko

EY Asia Pacific Power & Utilities EAM Leader

Business strategy professional. Transformation leader.

Related topics AI Blockchain Digital Disruption