127. Cutting Costs with Technology-Driven Improvements
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If you’ve been in the power industry workforce for any significant length of time, you may have asked your supervisor at some point “Why am I doing this?” regarding a task that you were assigned, only to have them respond, “We’ve always done it this way.” That’s because the power industry has a reputation for being stuck in its ways of doing things. As long as a process is safe, reliable, and reasonably cost-effective, the feeling is often, “Why change?” But just because something works, doesn’t mean its efficient or the best practice. Sometimes you have to step back and consider, “Is there a better way?” And sometimes you have to spend money to make money. The old English saying goes, “Penny-wise and pound-foolish,” which is intended to keep people from being too careful with small amounts of money, while missing out on large windfalls. Implementing new technology typically requires an initial investment, which in many cases can seem substantial. For power companies, that often means justifying the expense to the purse-string holders. “If we think about the focus on operating expense [OpEx] versus capital, within the U.S. sector at least, looking at leveraging cloud or other SaaS [Software-as-a-Service] solutions that may come across as an unwelcome operating expense can definitely hinder the speed of adoption of some of these newer technologies,” Casey Werth, general manager for the Energy industry with IBM Technology, said as a guest on The POWER Podcast. “We work closely with a lot of our clients on how to address these and build out business cases that can show that even if you have an increase in OpEx, for instance, the downstream reduction of OpEx cost far outweighs the OpEx increase of the solution.” Werth offered an example based on IBM’s Vegetation Management solution, which he helped a transmission and distribution (T&D) customer implement. “Veg management is a massive operating expense on any T&D operator’s budget that can be optimized or improved upon to have a better outcome,” Werth said. IBM’s website touts Vegetation Management as an end-to-end solution that leverages artificial intelligence (AI), satellite images, Light Detection and Ranging (LiDAR), and more to regularly assess and monitor vegetation. It says the solution helps improve work prioritization and decision-making from planning all the way through work inspection and auditing. Werth said IBM has leveraged “advanced technology to better automate the identification of potential areas of risk due to foliage, and then helping better plan and then audit those veg processes to ensure the best outcome for our clients.” Texas-based Pedernales Electric Cooperative is reportedly a satisfied customer. It expects to reduce the number and severity of vegetation-related outages, improve safety and reliability, and cut overall vegetation management costs by having implemented the solution. Among other ways Werth said technology can improve operations is through “process mining.” The goal of process mining is to gain complete process transparency using data from a business’s own software systems, such as ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) software. Process mining also aims to pinpoint inefficiencies and prioritize automation by impact and expected return on investment to drive continuous process improvements. It does that by triggering corrective actions or generating Robotic Process Automation (RPA) bots. “If we could identify four or five steps of a discrete process that could be either automated or removed, the potential OpEx savings, or just operational efficiency from that process on the other side, has really powerful impacts,” said Werth. “But, if you can’t run the tools to find those wins, then that win sort of stays hidden.”