Managing your assets

Enterprise asset management in energy utilities is rapidly being seen as an invaluable tool for improving asset-related decision-making. Power & Energy speaks to Axia Software Corp.’s Graham Carter to find out more.

PE. What are the most critical challenges currently facing the energy utility industry in terms of asset management?
GC. The most critical challenges are aging infrastructure along with the pressure of doing more with less. We are seeing much greater scrutiny around investment decision-making because utilities are being forced to change from the typical justification method of dollar per reliability investments, and are now having to show business cases that defend, dollar-for-dollar, their investment priorities. Utilities have an over-abundance of available data to make business decisions, but typically are unable to use much of that information to make planned decisions within an asset lifecycle analysis model. Many utilities have spent millions on ERP and EAM systems but are not realizing the full value of those investments because they are not able to use the resultant data in a holistic way to make critical business decisions. They have a lot of information, but there is not a lot of actionable knowledge.

Typically, what we see today is a variety of spreadsheets deployed within a utility’s various business units, and relied upon for budgeting and investment decisions. This methodology often creates inaccuracies and is unreliable in the face of changing priorities and issues of resource availability that impact mid to long-term investment planning. All utilities would benefit from a system that provides a single way of extracting consistent and actionable data to support their asset investment planning decisions.

PE. What would be the starting point for any utilities looking to set-up an appropriate and effective capital asset management process? What is the essential information required to set up this process?
GC. Utilities need an integrated, organization-wide process, to support their asset decision-making lifecycle in order to avoid making siloed and reactive decisions.

The first thing they need to do is identify where within their system investments need to occur, in line with various perspectives including corporate, technical and environmental, among others. Basically, they need to understand where the biggest opportunities exist for their investments to have a positive impact on their business. Their decisions need to be made in a proactive rather then reactive manner, taking into consideration all perspectives, rather than simply reacting to a current roadblocks or problems that have already occurred.

Once the most promising investment opportunities have been identified, utilities need to engineer the best solutions to those problems, based upon technical factors and their wider corporate objectives. Various alternatives should be considered and the most effective and efficient solutions selected in order to achieve the greatest ‘bang for your buck’.

Finally, a prioritizing process needs to take place. Because all of the groups involved have taken the time to identify the best investment opportunities and then verified that they have selected optimal solutions for each opportunity, they now have a lot of rigor around what goes into the optimizer. In that way, they avoid the ‘squeaky wheel gets the grease’ projects from gaining approval ahead of initiatives that are more deserving, and they clear the fog around why the selected projects have been put forward. Following such a process provides clear linkage between the corporate objectives and the projects that are prioritized and approved for investment.

PE. How can intelligent asset management solutions help utility executives align organi-zational objectives with engineering requirements? Why is this so important?
GC. Our intelligent asset management solution allows corporate objectives along with the perspectives of important corporate stakeholders such as regulatory bodies, customers and governments, to be narrowed down into a singe set of objective criteria against which all assets, portfolios and new projects are measured. In this way, all potential expenditures are ranked by their impact on helping the corporation to meet its goals and objectives.

Once identified, many potential projects will warrant further investigation by asset managers and engineers. There is no silver bullet or single indicator that will determine whether an asset or project should be selected, but to ensure a balanced view the perspectives of lagging, current and future indicators should all be considered. This is the first step toward determining where in the system improvements are required, in line with corporate objectives.

Using this methodology, all the projects that are reviewed and analysed by asset man-agement and engineering are already aligned and linked to corporate objectives, and the resultant decisions and eventual prioritization of investments for those projects will all carry through that same linkage.

PE. Can such an approach be effective in planning for new asset acquisition or construction, as well as for managing existing assets? And does this require a different approach?
GC. Absolutely. Because it is an objective process based upon what is important to the organization, there maybe different kinds of criteria required to determine the effectiveness of any one solution, but again those decisions will always be in line with the weighted priorities of the wider corporate stakeholders.

Growth projects should be included in the same prioritization pool as system sustainment projects to give each a fair chance of being funded. This allows the various utility functions to compete on a level playing field. For instance the optimization decisions for all projects, but especially for new acquisition projects will likely have to take into consideration emerging environmental and carbon footprint constraints as well as a tightening of resource availability. Providing a reliable method for comparing dissimilar projects is one of the big advantages that Axia’s REVEAL software suite provides.

PE. Finally, can you provide any examples of projects you have worked on where asset management challenges have been successfully addressed?
GC. Each customer Axia has worked with has faced these kinds of issues. For example, Toronto Hydro, the second largest municipal distribution utility in North America, recently completed a project with us. Robert Wong, Vice President Business Transformation at To-ronto Hydro is on record as saying: “REVEAL helps us to identify a common methodology that can be used across our entire system so that when we make asset management deci-sions, and ultimately financial decisions, we are always comparing apples to apples.”

Although a lot of utilities are starting to define better processes around how capital planning and asset management are handled, many of them are still using very rudimen-tary tools to do so. There is a thirst for an enterprise-level solution that removes orga-nizational silos and allows decision-making consistency and repeatability across the entire organization. For years now, in many utilities, there has been a growing reliance on outside consultants to manually create asset and project prioritization recommendations. Although these consulting-based solutions bring industry expertise and may provide good asset management recommendations, they ultimately diminish decision-making control within the utilities by providing a non-repeatable decision framework based on static asset information.

An enterprise level software solution allows utilities to use a well defined and agreed upon process uniformly across all areas of their organization. With the software acting as the vehicle to deliver reliable, repeatable, real-time decisions, the utility gains flexibility and its decisions become auditable, defendable and easily understood by all stakeholders.

An additional benefit of a software-based solution is that it creates a repository for knowledge retention. It provides a platform where past decisions and outcomes are stored, building an institutional knowledge base that can be leveraged to improve future decision-making. This process assists with critical knowledge transfer as the new breed of engineers and asset managers join utilities replacing the retiring baby boom generation. Axia’s REVEAL solution supports this new generation of employee allowing them to meet the challenges of the industry with confidence.

About Graham Carter
Graham Carter is currently President and CEO of Axia Software Corporation, a company he co-founded. Carter is recognized as an emerging leader in technology adaptation at a business level, with a proven history helping large organizations adopt new technologies that enhance and improve their mission critical business processes. In addition to being a corporate founder, Carter has held numerous executive and director level positions within the power, forestry and renewable energy sectors.