One of my jobs at the Utility Analytics Institute is to hop on the phone with utilities and dig into their analytics efforts. And one of the questions that inevitably comes up in these conversations is: Where does the "analytics department" sit in your organization? Recently, I've had many folks direct me to their business intelligence groups. Sure, utilities have had analytics in one form or another for a while, but what we're exploring today is more than the traditional reporting associated with business intelligence. We're looking at the evolution of predictive, real-time analytics. Can traditional business intelligence departments effectively address these needs? Despite this recent wave of business intelligence mentions, I've seen that advanced analytics efforts get housed in many different parts of utility companies -- from customer operations to separate analytics departments that report directly to the company president. These findings beg the questions:
- Is there one best location for advanced analytics in a utility company?
- If there isn't, how do you go about determining what is the best fit your company? And how will that best fit evolve over time?
Let's take a look at where advanced analytics are fitting into utility companies today.
The business intelligence group?
As I mentioned above, one landing spot for analytics that we've seen recently is the traditional business intelligence department. In many cases, these placements are for companies that haven't taken on extensive grid digitization. In other cases, utilities are leveraging departments already focused on data management, essentially so they can get all the data in order that's needed for advanced analytics. One utility preferred to use the name 'business information lifecycle department' to describe this type of organization. Many of these efforts, whether business intelligence or business information, are often focused on the data, but will they be able to accommodate the evolution beyond data toward more real-time, predictive analytics?
Business units?
We've also talked with numerous companies that choose to locate their analytics efforts within specific business units. Often, a specific business unit, whether customer service, grid operations or asset management, has a particular problem that can be addressed through the use of advanced analytics. The business unit then decides to move forward with an analytics effort to address the specific problem. As the success of this analytics project is realized, the business unit may suddenly be managing an analytics department for the company. Again, these efforts focus on a particular use of advanced analytics and raise questions about whether this analytics location is the best fit in the long-term as advanced analytics spread across the company.
Smart grid 3.0, 5.2?
There are so many versions of the smart grid out there that I've lost track, but will the smart grid teams that formed at utility companies over the past several years be the springboards to take utilities to the next version of smart grid -- one with advanced analytics? At the Institute, we've found that smart grid technologies are collecting all sorts of great data that can be leveraged into more advanced analytics. It can be a natural fit for interdisciplinary smart grid teams to be at the forefront of figuring out how to analyze all the data that is now pouring into utilities.
Taking it to the big time?
In this week's analytics professional profile, I had a chance to catch up with Lloyd Tokerud, director of analytics as Hudson Energy. Tokerud, who's working with Hudson Energy to develop an analytics department, said to take it to the president, well, at least the president of the company. "If an analytics department is really supposed to be there to get the most important questions answered, then it makes more sense that it's rolled up through the office of the president," said Tokerud.
So we've seen a lot of different approaches to the housing of advanced analytics efforts. What do you think? Where should advanced analytics fit inside utility companies? I invite you to share your thoughts with us on our Utility Analytics Professionals discussion group on LinkedIn. Or pick up the conversation at our Utility Analytics Week conference and exhibition in Arlington, Texas, September 18-20.
As always, thanks for reading!
H. Christine Richards is a director at the Utility Analytics Institute, a division of Energy Central. You may reach her at crichards@energycentral.com.
