Ross Smith, utility digital expert at PA Consulting, discusses the digital operating model and organizational agility in a podcast with Dylan Lockwood and Erin Hardick from Zpryme.
Commenting on how organizational agility is promoted in the energy industry, Ross says: “At the leadership level, there's an understanding of the need for this type of change. They can see in other industries the benefits it’s had. But it's hard because it is pushing against culture and the way the organization is operated for decades. It's more a question of how you get started. And the answer is not just with a few training and coaching sessions of the IT staff. It is truly driven from the C-suite as an organizational priority and the C-suite really making sure they know and understand what it needs for their business when they say organizational agility.”
Ross continues: “There are critical things we see that need to change and isn't happening quickly enough. A lot of the thinking and the structure that goes into these business cases is manifested because of the organizational structure of utilities, which are very traditionally siloed and functionally distinct across the whole value chain. Integration across the value chain, particularly to serve the customer, can be enabled through technology. In a way, you need to reimagine what that organizational structure should be, what the reporting lines should be, how you're collapsing or merging all of your customer facing functions and place them under one senior leader so you've got that unified view rather than this fragmentation.”
Discussing how the digital evolution is spurring utilities to change, especially on the operations side, Ross says: “The approach that I see a lot of utilities take to digitization is adding more digital channels or digital capability, technology to their business, predictive analytics, artificial intelligence, chat bots, this type of thing. And that's what gets sort of most of the attention. But because the business cases and the funding is often siloed into functional areas, the projects are chunked up in a way that fit into the customer realm or field services or electric operations. There isn't a lot of look across the organization as to where things tied together are the full value chain and consideration. The effect this has is you can layer in this new technology and spend the money, but you don't then modify the organizational design and workflow in a way that really joins up across the whole value chain in a new reimagined way that really is optimal.”
Commenting on how a utility not just deploys technology and upgrades systems, but instead imbeds technology and data into the DNA of the utility, Ross says: “This isn't just another technology upgrade for the utility. This is truly embedding it in the DNA of the organization and that cultural shift. It speaks to organizational agility and how the utility operates and the adoption of agile ways of working. Not just in IT but culturally across the organization. We also look at the digital operating model -- reimagining the organizational structure of the organization and how to optimize and take advantage of those technology investments by really embedding it into the organization. And that requires hard decisions. In the siloed organizations that have existed in their current form for quite a long time, you're really changing and challenging the status quo.”
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