At your service

“It’s great, as with any recognition,” says Manoj Chouthai, CIO of Public Service Enterprise Group. “It’s always good to get external validation of the company’s work. But also it’s a manifestation of external recognition for the department, so it’s great in that sense.” He’s talking about being named CIO of the Year by the New Jersey Technology Council, an award of which he is clearly very proud. But such accolades are only a side concern. Chouthai is equally proud and energized about his day job and is extremely eager to talk about it. We very swiftly get down to business.

He’s talking about being named CIO of the Year by the New Jersey Technology Council, an award of which he is clearly very proud. But such accolades are only a side concern. Chouthai is equally proud and energized about his day job and is extremely eager to talk about it. We very swiftly get down to business.

Being CIO of the NJ-based energy company requires Chouthai to keep a lot of plates spinning and it’s a task he approaches with unusual enthusiasm. It helps that PSEG is blessed with management that understands what technology can do. Chouthai assumed the position of CIO when his predecessor Elbert Simpson moved upstairs to the President’s office. Chouthai had been reporting directly to Simpson as CTO for three years and had built up a good rapport. “ It really helps to have continuity of relationship with your boss,” he says. “He’s there to help you navigate some of the pitfalls and act as a sounding board.” But support from above doesn’t end there. Belief in IT at PSEG starts at the top. “Our CEO Ralph Izzo is a strong proponent of IT and truly understands the value it can bring to the enterprise. Having these two strong leaders in those positions makes my job much easier because I don’t have to fight those fights with my boss and his boss. ”

Such tech-savvy leadership would undoubtedly turn many CIOs green with envy. For Chouthai it means that he can focus on his core responsibilities and not expend too much effort convincing superiors why they should be investing in technology. One of the big areas of activity for Chouthai and his team has been in the area of smart metering. “We recently completed a pilot that helped us understand how price signals can influence customers’ energy usage patterns and improve our understanding of system requirements, technology options and performance.”

With this pilot under the company’s belt, Chouthai is now in the middle of a similar effort for the latest AMI technologies, field testing their capabilities within PSE&G’s service territory. But despite PSEG’s positive attitude toward technology, any project still has to make sense to the bottom line. “We are starting to build up a business case that’s going to help justify an overall deployment,” he explains. “We’re working diligently and doing both business and technical assessments of the latest technologies.”

But in a field that is developing so rapidly there are potential brakes on implementation. “There are really no good standards,” Chouthai continues. “There are lots of good companies and lots of good technologies, but the standards field is kind of evolving and we want to be prudent about which technologies we’re going to be piloting with, whether we go broadband over power line (BPL) or with a RF mesh network.” BPO or we go mesh network.” In response to these challenges a team of people from both business and IT was created and has been created from business and IT tasked with researching and assessing the options. “They’re talking to customers and suppliers trying to understand how this AMI technology is going to help them,” he tells us.

Chouthai’s enthusiasm for the possibilities that AMI can bring is palpable, but he’s also aware of the pitfalls that could lie ahead. “Each company is being faced with hundreds of millions of dollars in investment decisions,” he says. It’s an emerging space and the lack of clear, industry-wide standards could pose big problems for the early adopter who jumps in too carelessly. “These aren’t trivial investments that we’re talking about,” he says. “These are hundreds of millions of dollars that each company is being faced with. You don’t want to be the CIO that goes up to your CEO with a particular technology and then find out a year and a half later that there’s a critical mass of other solutions that has leapfrogged you.”

It’s because of this that Chouthai is being prudent in acting as a spearhead for AMI adoption. “ I’m being kind of risk averse in this area,” he confesses. “I would rather build a coalition, see how these technologies evolve and make sure that there is enough momentum behind whatever technology that we recommend to our customers.” But when the time comes to commit, Chouthai has no doubt that the benefits for both utilities and consumers will be massive. “ Not only does it provide real time customer metering information, it also helps us develop a two-way bridge with the customer,” he continues. “We can send pricing signals to help them manage their energy use, and better understand their usage patterns, which allows for more efficient demand side management and green energy initiatives.”

If full spectrum AMI remains a little way off, one area in which more concrete developments are being made is in PSEG’s customer infrastructure, where a huge redeployment and replacement of the company’s legacy system platform is currently underway. Chouthai laughingly tells us that PSEG may have the dubious honor of operating one of the oldest customer systems in the entire North American utility industry. But rather than this signifying a lack of ambition, it was simply a case of ‘if it ain’t broke, don’t fix it.’ “It keeps on chugging,” he says. “Although many assessments were conducted over the last decade, we could never develop a convincing business case to replace the old system. It just kept on working. It’s like the Energizer bunny.”

Unsurprisingly, the final impetus to make the change came with the arrival of PSEG’s freshly tech-friendly management team. “It had been a hurdle and a challenge for IT and even for the former heads of customer operations to convince our executives leadership of the fact that it was time to replace the system something that seemed to be working,” Chouthai explains. “With a the new CEO being in place, a new head of the services company being in place, a new CIO and a new head of customer operations in the mix, there was a critical mass of people who were convinced that the old customer service platform was not meeting the needs of the business or the future needs of our customers. It was with the ability to understand that it’s time to change.”

The episode illustrates an important issue for technology leaders: convincing management that removing something that seems to function is necessary from a business perspective and that what is going to replace it not only fits the current bill, but also positions the enterprise for the future. It’s a situation that Chouthai understands and one that has been reflected in the search for a new customer service infrastructure. “The existing technology is not something that’s going to take us into the future,” he says. “So we’re introducing a state of the art SAP system which is at the right spot on the maturity cycle.”

Chouthai tells us that PSEG had done a few assessments of SAP’s customer service solution going as far back as the late nineties and had always found that there was something necessary missing from its functionality. But when the company returned to the subject last year, things appeared to have changed. “We found that the SAP CCS module is now coming to a stage where it’s had its fair share of deployment across the industry,” he explains. “There have been a few successes with that technology and we felt the time was right to migrate to that platform.”

Once the deployment is complete, PSEG will have the unique distinction of being the first fully integrated utility on the SAP platform. While financial systems, materials management, supply chain management and HR are already integrated, the work management and customer system will be the final piece of the puzzle. So what advantages can working on a single connected platform bring? “ I’m confident that once we bring this in the true power of integration will be available to the company,” Chouthai replies. “We will be able to bring new features and functionality to our customers, and will have better reporting, better data integrity and the ability to truly integrate our financial systems with our supply chain systems and customer system.”

From technology that is currently being explored and technology in the midst of being deployed we move to an area where PSEG is an experienced industry leader. “ We’ve had a fairly successful history of deploying mobile technology to our field force,” Chouthai states. “Going back to the early mid 1990s, we were one of the first utilities to really start deploying mobile technology in our service trucks on a broad basis.”

PSEG calls them mobile display terminals (MDT) and there are several thousand installed in the company’s vehicles. According to Chouthai, the advantages they bring are tremendous. “In the past, field employees would have to come back to the home office at the end of the day to get instructions and work schedules for the next day,” he says. “Today, many are able to go home when their work is completed and pick up where they left off the next day morning.” In addition to making workers lives easier, it’s also helping the company to be more energy efficient, saving as company vehicles use less gas on essentially pointless journeys back to the central office.

Benefits also extend to customers as the system allows the company to give real time updates and more accurate arrival times for on-site visits. to customers, allowing them to know with more accuracy when they can expect service teams to arrive at their location. Additionally, this up- to- the- minute data can be put to other uses. “It’s also helping us provide better the same kind of real time information to our regulators,” Chouthai says. “It’s helping us communicate more with key stakeholders,, which was a challenge in the past when we were working with a paper-based system.”

So what are Chouthai’s concerns as he goes forward? In a world where environmental issues are increasingly important, he’s keen that IT plays its part. “We’re working to make sure that any new assets we bring into our data center are energy efficient and ‘green’,” he says. “That’s going to be critical in helping us build the clean data center footprint for the future.”

Other issues are those that face the industry in general, in particular that of the aging workforce. As Baby Boomers move towards retirement and a new, very different generation steps into its place, managing the transition will require careful planning. A chief concern is that departing employees will take their knowledge and experience with them. “There’s a lot of people that have had a great history with this company who are at the age where they might be contemplating retirement,” Chouthai says. “We’re in the planning phase of introducing infrastructure to mitigate the problem and deploying knowledge management techniques to address the issue.”

As these older workers make way, the new generation will bring challenges of their own. “They’re very competent with a large number of modern technologies,” Chouthai continues. “They are comfortable with texting, Web 2.0, Wikipedia, Facebook and so on. The IT department needs to rapidly step up and accept that challenge and build infrastructure that’s going to allow them to be productive with their own technologies and still make sure that we maintain the reliability, security and integrity of our networks. We’re living in pretty interesting times.”

But the biggest concern continues to be running technology in line with business objectives. To do this, PSEG is starting to manage IT using a balanced scorecard concept. Chouthai explains: “This means that we want to work in terms of maintaining the integrity of all four quadrants. You can’t have strong financial results at the expense of people. You can’t have operational reliability being compromised at the expense of customer satisfaction.” The challenge is to ensure that all of these elements are balanced and in harmony, so that IT can enable continuing and resilient business growth. Once again, the efforts of senior management have been instrumental in getting these initiatives off the ground. “We have been doing benchmarking for the past three or four years, but we’ve had our ups and downs,” Chouthai continues. “There were some times when we were very focused, and times when we kind of dropped the ball. But we’ve worked together to formalize the benchmarking concept and couple it with the balanced scorecard. This now is how we look at success in IT.”

Constant progress is the key for Chouthai and this close focus on IT’s value to the business shows no sign of letting up. “We’re going to be continually looking at improving the IT departmental performance by focusing on operational excellence,” he says as our interview draws towards its end. “This is how we’re going to be managing our costs and this is how we are going to be training and developing our people - to help support and build an IT department that’s both a top quality organization and long-term sustainable.”

Get smart?

Chouthai gives his take on the intelligent grid
Even within our company if I were to ask four other senior officers, I’m sure there will be a different nuance to the definition of Smart Grid. I have my opinion based on my reading and other people will have their own opinions about it. In a nutshell, I look at smart grid as an integrated mechanism that truly links demand side management and demand response management with supply side management. It’s a technology that will encompass the entire electric delivery system including transmission and distribution, taking it all the way to the customer with their residential and commercial site technology such as meters and other ancillary assets.

Key elements

Chouthai describes the four main dimensions of his role
“Besides a strong understanding of technology, any person that heads up IT needs to have business savvy and financial sense, needs to run his or her department as a business and pay strong attention to the bottom line. It means a tremendous emphasis on cost and making sure that budgets are managed well, so the business knows what to expect.”

“You have to understand the demands of the business and that these demands can change at any point in time based on new drivers and opportunities. On the IT side, I have to make sure that there is effective supply side management.

“Technology is going to be relevant today and down the road, too.. I have to make sure that any technology we bring into the mix is at the right maturity point, so that we aren’t really bringing in anything that’s on the leading edge. You have to be careful that you’re introducing technology that’s going to have a sustainable life in the market place and within the company.”

“I look at my job as being a people person. Even though we look at technology and IT as very systems focused. I think a big component of my job is people management and coaching. It’s about getting them outside their comfort zone, helping them stretch and helping them grow.”

A powerful history
1903 – The Public Service Corporation is formed in New Jersey by more than 400 gas, electric and transportation companies
1937 – Public Service Corporation launches first diesel-electric bus fleet in the world
1948 – Public Service is broken up and renamed Public Service Gas & Electric
1980 – PSE&G sells its transport system to the State of New Jersey
1985 – Public Service Enterprise Group is created as holding company
2008 – PSEG is a $13 billion Fortune 200 publicly traded diversified energy company