Investing in enterprise analytics will be a $1.5 billion industry for utilities in 2012 according to GTM Research, and yet there are substantial barriers that remain for small and large players, according to a new survey from SAS.
The software company polled more than 200 energy and utility executives about analytics and which functions were most useful to them. The respondents were split amongst all sizes of utilities, from co-ops and munis to the largest investor-owned firms.
Utilities and vendors often talk about the cultural barriers to moving utilities into an IT-based business. The survey from SAS confirmed that, with 60 percent of participants saying that budgeting was the top barrier to implementing customer analytics software; internal change management ranked only a few percentage points behind.
The response was nearly the same for network analytics software, and budget was a larger consideration for enterprise IT investment. However, the study noted that the largest utilities cited internal operating processes as the main barriers to successfully implementing analytical solutions.
Among the suggestions to overcome those barriers were establishing centers of excellence within utilities and removing silos and cultural barriers, rather than having people go with “gut-feel” decisions. In other words, take a Moneyball approach.
It is not that utilities of all sizes don’t recognize the importance of sharing and crunching data. Only 6 percent of respondents said they had not even thought about restructuring to better leverage information. However, one-third of survey participants said that they recognized the potential but “have too many barriers to change” when it comes to breaking down organizational silos.
Nearly half, 44 percent, said that they recognize the importance and have just begun to act. That leaves a huge opportunity for vendors to offer more than just software. Big players like IBM and eMeter say that they spend a lot of time advising utility clients on how to rethink their business models, which is more important than the software analytics itself in many cases. Without the right teams in place, even the most sophisticated analytics cannot fully deliver.
At The Networked Grid, Randy Guard, VP of sales development at SAS, told the audience that business intelligence is not the same as business analytics. For utilities that are wading deeper into business software platforms than ever before, it is important to understand the difference and to plan for each accordingly.
The SAS report also found that only about half of utilities rated themselves as faring ‘well to very well’ in terms of organizational performance. Although the survey was about how power companies use analytics, many of the recommendations had to do with corporate structure and not the analytical tools themselves.
“The responses indicate that utilities need to establish metrics and goals for surfacing data, creating information and delivering it to the right people within the organization.” Not only do the most successful vendors quantify the return on investment of their products, they offer the organizational solutions to maximize the return.