How can utilities make dramatic business improvements in productivity through better asset utilization and work force unification? This is the second of a two part series that identifies improvement strategies utilities are applying today.
Part I of this article (which appeared in the January-February 2005 issue of this magazine) discussed the state of the utility industry and suggested that utilities are asset intensive companies. It reviewed how utilities are changing their approach to asset management and implementing new systems to support asset management requirements. To manage assets effectively, utilities need to know the full life cycle history for each asset and base their asset strategies on Return on Asset Investment (ROAI) evaluations.
Traditionally, utilities have organized along capital and operations activities and further
divided into office and field workers. This culture, reinforced with "best-of-breed" systems implemented for specific organizations and often only loosely integrated with other systems, has resulted in organizational silos that discourage cooperation and prevent employees from operating at their fullest potential.
These silos can be eliminated and utilities can operate more effectively as unified organizations. All the utility’s employees and contractors can focus on common business objectives and become part of shared business processes.
This Part 2 of the two part series recommends strategies for unifying the utility’s work force and systems in the office and in the field to reduce organizational silos. Cultural changes are required to achieve the unification and drive productivity improvements. Once the constraining silos have been removed, the utility can achieve long-term cost savings and dramatic business improvements.
Automating the Field – The Last Frontier
Since utilities are asset intensive companies most of their work is done where their assets are located – in the field. However, most of the improvements in processes, procedures, and
systems have emphasized the office worker and not the field worker.
The field may be the "last frontier" for increased effectiveness and reduced costs. Industry studies have documented that a 30% to 50% improvement in field productivity can be achieved by:
• Implementing comprehensive system
capability on mobile devices
• Redesigning business processes to unify field and office work
• Developing and monitoring key performance indicators
• Providing field access to current data
The first steps toward field productivity improvement -- such as field map access and downloading work orders -- have been available for years. These capabilities offer field workers ease of use benefits and reduce clerical work. However, even greater benefits are achieved when the utility fully integrates the field into its business processes, accepts field updates, and provides wide system access to the field worker.
Poorly defined business processes have hampered achieving projected system benefits in both office and field operations. The culture of many utilities separates the field and office staff as well as the construction and operations organizations. In fact, within some utilities, there is a tradition of disrespect for the needs of each party. This culture constrains the benefits that can be achieved.
To achieve the next level of utility effectiveness, the utility must shift its cultural focus from the office to the field where the work is performed. Executive support for these changes, including the necessary organizational changes, is required to help ensure their success.
Moving the Office to the Field
Almost all the distribution utility vendors are turning to field applications as a source of new users and increased benefit. However, few field systems are integrated with one another and with other corporate systems. Many vendors are simply moving their desktop functionality to the field without implementing new business processes and integrating field and office functions.
At one time it appeared, in a comical way, that the fully enabled field worker would look like "an outlaw in a cheap western" – a person weighed down with different mobile units, PDAs, and cell phones in different holsters and ready for any situation, whether the application was mapping, dispatch or inspections. But this hasn’t happened because mobile units provide enough capacity to support multiple applications, even if the applications aren’t integrated. So the question becomes, how can the utility capitalize on the power of the fieldtop and integrated applications to support greater work efficiency?
Mobile Capability Evolution
Mapping was one of the first distribution field applications (customer service turn on / turn offs and outage/dispatch were other early adopters). Since maps are the only field source of network configuration, they are the lifeblood of the field worker. Map access on mobile units has replaced
hardcopy map books that were time consuming and expensive to maintain, awkward to use, and always out of date.
Yet dramatic cost reductions have not been achieved. One reason is that the mobile mapping capability serves a narrow purpose – delivering map information. The mobile device is being used as a digital clipboard. The work, defined by office based systems, is downloaded to the mobile device and results entered by the field worker are recorded on the mobile unit (digital clipboard) and uploaded to the office, typically for reentry into the office systems. Some implementations use redlining to record the construction details – a process that replaces the red pen on the paper design with a digital pointer recording redlines on a digital map for subsequent re-entry into the office systems by office staff. This approach duplicates the existing process and doesn’t provide a unified, highly productive office and field process.
The next evolutionary step for mobile capability came from the asset/work management environment. Work packets defined in the office are downloaded to the mobile units. Some mobile vendors support recording of construction results and upload and automatic entry into the asset/work management systems from the field units. With this capability paper designs and work packets are eliminated, the effort to transcribe construction is reduced, redundant processes are eliminated, and the utility’s databases are updated rapidly with accurate data.
However even today, many of the field worker’s applications don’t have the same look and feel and few of them perform in an integrated fashion with the corporate systems. In some cases, because of the limitations of field devices or communication methods, the field workers are offered "stripped down" applications that reduce the field’s productivity as an enterprise contributor. For the utility to achieve real efficiencies business processes and cultural environments must be changed and both field and office systems must be modified to enable the new processes.
A Lesson from the Desktop
All of us have experienced how the value of our desktop systems has increased dramatically as the applications became more integrated and more user friendly. Then these systems became even more valuable when they moved from departmental silos into enterprise wide use. As we learned to "Google", we began to draw on the knowledge of the entire world at our desktop.
The modern desktop environment is a seamless environment. However, the field worker often has a hodge-podge of technology: a real time connection for dispatch, docking stations for construction and inspection work, and CDs for mapping.
What if all these field functions were integrated as seamlessly as typical office-based desktop environments? Why not move the office to the field? Why not change the work process so that office and field work are much more transparent? To achieve real performance gains, why not provide access and update capability for most enterprise data to all users, whether in the office or the field? Recognize that the "field" can be many different places – a crew vehicle, a job site, an employee’s home, a contractor’s office – and make data access possible from all. What if the crew defined new work, requisitioned material, completed the work, and recorded the results from the field without returning to the office -- and the effort took a day or two instead of weeks or months?
Unified field and office work doesn’t result from new technology alone; it requires cultural changes supported by senior management. As long as office workers are the only ones who can design the job and record as-built data; and as long as the field doesn’t appreciate the office requirements or respect office developed designs and corporate records; then work will be
performed redundantly in the office and the field and important office system records will remain months behind. Some utilities are actually perpetuating their unproductive behavior by buying additional systems to automate antiquated processes. They are incurring additional costs with little hope of achieving significant benefits.
The corporate culture should change to give greater emphasis and responsibility to the field worker until the distinctions between field and office workers are virtually eliminated. New processes must be defined and implemented so that the whole environment -- office to field and field to office -- becomes a single business process continuum. When this happens, utilities can reap their expected benefits and experience greater accountability from both office and field
personnel. Utilities that adopt this approach can further flatten their organizations.
Harnessing Technological Change
The next generation of office and field systems will implement new system architectures that take advantage of increased communications capabilities. With the revolution called "Wi-Fi" and wireless networks, desktops and fieldtops can connect to corporate systems via the Internet from many locations. Often, wireless "hot spot" connections are either free or relatively inexpensive. As wireless coverage increases, Internet solutions proliferate, and communication costs decrease, utility workers in the field will be able to do everything that they now do in the office.
With new wireless system architectures, systems will be designed to operate seamlessly in both the office and the field. When a wireless connection is unavailable, the system will access data previously downloaded to the field unit. When the connection is re-established the system will automatically upload the work and refresh the field unit without the user taking any actions. This approach requires new system architectures. Enabled by this communications revolution, utilities will be able to achieve real benefits as field and office cultures and their business processes are transformed and the utility’s combined work forces focus their efforts on enterprise-wide objectives.
Key Performance Indicators for the Field
Studies have shown that companies that implement performance measures for field activities achieve a much higher level of productivity. Virtually all top quartile companies implement performance metrics that help them substantiate their benefits and identify areas for additional study and subsequent improvement. These metrics – often called key performance indicators -- are designed to measure the improvements the utility is striving to achieve. Typical indicators for the field are: completed work orders per day categorized by type, average labor per work order per type, average duration of the work orders and productive direct activity time.
Direct activity time is measured as the percentage of the workday spent working directly on an asset. It doesn’t include travel, planning, approvals, record keeping, management, meetings, etc. – only the actual time spent working on the assets. "Productive" direct activity time is the time that an employee is performing work appropriate for the employee’s skill level. Maximizing direct activity time is essential to keeping everyone busy – a good objective; maximizing productive direct activity time is the key to keeping everyone busy doing work they can most cost effectively perform – a better objective.
Studies demonstrate that when the cultural changes are achieved to make work in the field more effective, a dramatic increase in direct activity percentages results. Many distribution utility companies are performing at less than 20% direct activity time. This means that on average the utility’s staffs spend less than two hours a day working directly on an asset and more than 6 hours a day filling out paper work, traveling, recording results, managing others, etc. By way of contrast, field workers for top quartile companies achieve 45% direct activity time.
Alternative Work Forces
In seeking to make productivity strides, utilities are re-examining who does what work and with what tools. Continuing a trend from the de-regulation era, asset intensive companies are distinguishing asset ownership from asset related service delivery. Service delivery can be divided into:
• Providing capacity, reliable service, and safety
• Performing routine work such as construction and maintenance
For some asset owners, capacity, reliability, and safety efforts are core capabilities for which they retain direct responsibility. Non-core activities such as construction and maintenance may be done by contractors and managed by the asset owners.
Contracting and Outsourcing
Utilities have been contracting their work for years – gas construction, tree trimming, and pole maintenance, for example. However, for some utilities, the paradigm is changing from "contracting" to "outsourcing". With traditional contracting, the contractor does what it is
directed to do by the company. With outsourcing, the outsourcing vendor accepts the risks and responsibilities for delivering specific processes and functions, as well as for performing the work. Outsourcing contracts include
negotiated service level agreements (SLA's) that specify the outsourcer services, responsibilities, and performance levels to assure quality results.
Each utility is determining its own balance between company employees, contractors, and outsourcers with some utilities contracting everything except the core asset ownership responsibilities while other utilities are pulling most of their work in-house.
Using the Web to Empower Contractors
One of the barriers to effective contracting is the effort required to manage contractors and to record contractor work into the company’s permanent records. This problem is not unlike the organizational silos, discussed earlier in this article, that prevent office and field workers from working effectively.
Most utilities rely on server/desktop systems such as work management, financial systems, and GIS to streamline their in-house work processes. But the utility often restricts contractor access to the systems for security reasons.
The barriers to effective contracting can be substantially reduced if the utility treats the contractor more nearly as a partner, increases the share of the work the contractor performs, and provides access to the company’s computer systems through secure portals.
For example, the following procedure increases contractor productivity. Assuming the contractor has a standing agreement with the utility, the utility defines the work at a high level and makes it available in the contractor’s office via the Internet through a secure portal. Contractor system access is limited to the contractor’s needs (for example, the contractor can’t view work assigned to others). The contractor accepts the work, does any design, permitting, material requisition, and construction, and then records the detailed construction through the Internet portal via the same systems the utility uses. The contractor’s involvement ends with the submittal of an invoice via the web.
Advantages of this approach include:
• Contractor performs more of the work, presumably at a lower total cost
• As-built records are updated quickly and accurately by the contractor
• Contractor management efforts are reduced
• Redundant paperwork and data entry are eliminated
• Asset posting backlogs are eliminated
Dramatic Improvements
Leading utilities are taking aggressive steps to manage their assets better, find new ways to reduce their costs, and provide better and more reliable service. Recognizing they are asset owners in asset-intensive companies, they are maximizing the effective lives of their assets and controlling total cost of ownership. They are implementing new systems and an asset repository with enterprise access including field workers. These utilities are changing their cultures, unifying their office and field workers, and instituting new business processes to improve performance.
The lines between "office" and "field" are blurring as the utilities recognize that work is the same regardless of where it is performed. Leading utilities are also re-examining such alternatives as contracting and outsourcing and transferring business processes and accountability to third-party entities to reduce costs and increase reliability.
In a tough economic environment where many utilities have taken the easy benefits,
utilities are finding new approaches such as these to move to the next level of effectiveness and achieve dramatic business improvements.
About the Author
Chuck Drinnan is Executive Consultant for LogicaCMG’s energy and utilities division located in Houston, Texas. He has over 30 years of experience in asset and resource management for the utility industry. Chuck can be reached at chuck.drinnan@logicacmg.com or call 1-800-334-7101.
LogicaCMG is a global IT solutions company,
providing systems integration, consulting, products and services. LogicaCMG’s Asset and Resource Management (ARM) product suite includes work management, mobile computing, asset management, compliance tracking, scheduling, and reporting capabilities delivered as a pre-integrated, seamless solution. For additional information visit the LogicaCMG web site at www.logicacmg.com/us.
Part I of this article (which appeared in the January-February 2005 issue of this magazine) discussed the state of the utility industry and suggested that utilities are asset intensive companies. It reviewed how utilities are changing their approach to asset management and implementing new systems to support asset management requirements. To manage assets effectively, utilities need to know the full life cycle history for each asset and base their asset strategies on Return on Asset Investment (ROAI) evaluations.
Traditionally, utilities have organized along capital and operations activities and further
divided into office and field workers. This culture, reinforced with "best-of-breed" systems implemented for specific organizations and often only loosely integrated with other systems, has resulted in organizational silos that discourage cooperation and prevent employees from operating at their fullest potential.
These silos can be eliminated and utilities can operate more effectively as unified organizations. All the utility’s employees and contractors can focus on common business objectives and become part of shared business processes.
This Part 2 of the two part series recommends strategies for unifying the utility’s work force and systems in the office and in the field to reduce organizational silos. Cultural changes are required to achieve the unification and drive productivity improvements. Once the constraining silos have been removed, the utility can achieve long-term cost savings and dramatic business improvements.
Automating the Field – The Last Frontier
Since utilities are asset intensive companies most of their work is done where their assets are located – in the field. However, most of the improvements in processes, procedures, and
systems have emphasized the office worker and not the field worker.
The field may be the "last frontier" for increased effectiveness and reduced costs. Industry studies have documented that a 30% to 50% improvement in field productivity can be achieved by:
• Implementing comprehensive system
capability on mobile devices
• Redesigning business processes to unify field and office work
• Developing and monitoring key performance indicators
• Providing field access to current data
The first steps toward field productivity improvement -- such as field map access and downloading work orders -- have been available for years. These capabilities offer field workers ease of use benefits and reduce clerical work. However, even greater benefits are achieved when the utility fully integrates the field into its business processes, accepts field updates, and provides wide system access to the field worker.
Poorly defined business processes have hampered achieving projected system benefits in both office and field operations. The culture of many utilities separates the field and office staff as well as the construction and operations organizations. In fact, within some utilities, there is a tradition of disrespect for the needs of each party. This culture constrains the benefits that can be achieved.
To achieve the next level of utility effectiveness, the utility must shift its cultural focus from the office to the field where the work is performed. Executive support for these changes, including the necessary organizational changes, is required to help ensure their success.
Moving the Office to the Field
Almost all the distribution utility vendors are turning to field applications as a source of new users and increased benefit. However, few field systems are integrated with one another and with other corporate systems. Many vendors are simply moving their desktop functionality to the field without implementing new business processes and integrating field and office functions.
At one time it appeared, in a comical way, that the fully enabled field worker would look like "an outlaw in a cheap western" – a person weighed down with different mobile units, PDAs, and cell phones in different holsters and ready for any situation, whether the application was mapping, dispatch or inspections. But this hasn’t happened because mobile units provide enough capacity to support multiple applications, even if the applications aren’t integrated. So the question becomes, how can the utility capitalize on the power of the fieldtop and integrated applications to support greater work efficiency?
Mobile Capability Evolution
Mapping was one of the first distribution field applications (customer service turn on / turn offs and outage/dispatch were other early adopters). Since maps are the only field source of network configuration, they are the lifeblood of the field worker. Map access on mobile units has replaced
hardcopy map books that were time consuming and expensive to maintain, awkward to use, and always out of date.
Yet dramatic cost reductions have not been achieved. One reason is that the mobile mapping capability serves a narrow purpose – delivering map information. The mobile device is being used as a digital clipboard. The work, defined by office based systems, is downloaded to the mobile device and results entered by the field worker are recorded on the mobile unit (digital clipboard) and uploaded to the office, typically for reentry into the office systems. Some implementations use redlining to record the construction details – a process that replaces the red pen on the paper design with a digital pointer recording redlines on a digital map for subsequent re-entry into the office systems by office staff. This approach duplicates the existing process and doesn’t provide a unified, highly productive office and field process.
The next evolutionary step for mobile capability came from the asset/work management environment. Work packets defined in the office are downloaded to the mobile units. Some mobile vendors support recording of construction results and upload and automatic entry into the asset/work management systems from the field units. With this capability paper designs and work packets are eliminated, the effort to transcribe construction is reduced, redundant processes are eliminated, and the utility’s databases are updated rapidly with accurate data.
However even today, many of the field worker’s applications don’t have the same look and feel and few of them perform in an integrated fashion with the corporate systems. In some cases, because of the limitations of field devices or communication methods, the field workers are offered "stripped down" applications that reduce the field’s productivity as an enterprise contributor. For the utility to achieve real efficiencies business processes and cultural environments must be changed and both field and office systems must be modified to enable the new processes.
A Lesson from the Desktop
All of us have experienced how the value of our desktop systems has increased dramatically as the applications became more integrated and more user friendly. Then these systems became even more valuable when they moved from departmental silos into enterprise wide use. As we learned to "Google", we began to draw on the knowledge of the entire world at our desktop.
The modern desktop environment is a seamless environment. However, the field worker often has a hodge-podge of technology: a real time connection for dispatch, docking stations for construction and inspection work, and CDs for mapping.
What if all these field functions were integrated as seamlessly as typical office-based desktop environments? Why not move the office to the field? Why not change the work process so that office and field work are much more transparent? To achieve real performance gains, why not provide access and update capability for most enterprise data to all users, whether in the office or the field? Recognize that the "field" can be many different places – a crew vehicle, a job site, an employee’s home, a contractor’s office – and make data access possible from all. What if the crew defined new work, requisitioned material, completed the work, and recorded the results from the field without returning to the office -- and the effort took a day or two instead of weeks or months?
Unified field and office work doesn’t result from new technology alone; it requires cultural changes supported by senior management. As long as office workers are the only ones who can design the job and record as-built data; and as long as the field doesn’t appreciate the office requirements or respect office developed designs and corporate records; then work will be
performed redundantly in the office and the field and important office system records will remain months behind. Some utilities are actually perpetuating their unproductive behavior by buying additional systems to automate antiquated processes. They are incurring additional costs with little hope of achieving significant benefits.
The corporate culture should change to give greater emphasis and responsibility to the field worker until the distinctions between field and office workers are virtually eliminated. New processes must be defined and implemented so that the whole environment -- office to field and field to office -- becomes a single business process continuum. When this happens, utilities can reap their expected benefits and experience greater accountability from both office and field
personnel. Utilities that adopt this approach can further flatten their organizations.
Harnessing Technological Change
The next generation of office and field systems will implement new system architectures that take advantage of increased communications capabilities. With the revolution called "Wi-Fi" and wireless networks, desktops and fieldtops can connect to corporate systems via the Internet from many locations. Often, wireless "hot spot" connections are either free or relatively inexpensive. As wireless coverage increases, Internet solutions proliferate, and communication costs decrease, utility workers in the field will be able to do everything that they now do in the office.
With new wireless system architectures, systems will be designed to operate seamlessly in both the office and the field. When a wireless connection is unavailable, the system will access data previously downloaded to the field unit. When the connection is re-established the system will automatically upload the work and refresh the field unit without the user taking any actions. This approach requires new system architectures. Enabled by this communications revolution, utilities will be able to achieve real benefits as field and office cultures and their business processes are transformed and the utility’s combined work forces focus their efforts on enterprise-wide objectives.
Key Performance Indicators for the Field
Studies have shown that companies that implement performance measures for field activities achieve a much higher level of productivity. Virtually all top quartile companies implement performance metrics that help them substantiate their benefits and identify areas for additional study and subsequent improvement. These metrics – often called key performance indicators -- are designed to measure the improvements the utility is striving to achieve. Typical indicators for the field are: completed work orders per day categorized by type, average labor per work order per type, average duration of the work orders and productive direct activity time.
Direct activity time is measured as the percentage of the workday spent working directly on an asset. It doesn’t include travel, planning, approvals, record keeping, management, meetings, etc. – only the actual time spent working on the assets. "Productive" direct activity time is the time that an employee is performing work appropriate for the employee’s skill level. Maximizing direct activity time is essential to keeping everyone busy – a good objective; maximizing productive direct activity time is the key to keeping everyone busy doing work they can most cost effectively perform – a better objective.
Studies demonstrate that when the cultural changes are achieved to make work in the field more effective, a dramatic increase in direct activity percentages results. Many distribution utility companies are performing at less than 20% direct activity time. This means that on average the utility’s staffs spend less than two hours a day working directly on an asset and more than 6 hours a day filling out paper work, traveling, recording results, managing others, etc. By way of contrast, field workers for top quartile companies achieve 45% direct activity time.
Alternative Work Forces
In seeking to make productivity strides, utilities are re-examining who does what work and with what tools. Continuing a trend from the de-regulation era, asset intensive companies are distinguishing asset ownership from asset related service delivery. Service delivery can be divided into:
• Providing capacity, reliable service, and safety
• Performing routine work such as construction and maintenance
For some asset owners, capacity, reliability, and safety efforts are core capabilities for which they retain direct responsibility. Non-core activities such as construction and maintenance may be done by contractors and managed by the asset owners.
Contracting and Outsourcing
Utilities have been contracting their work for years – gas construction, tree trimming, and pole maintenance, for example. However, for some utilities, the paradigm is changing from "contracting" to "outsourcing". With traditional contracting, the contractor does what it is
directed to do by the company. With outsourcing, the outsourcing vendor accepts the risks and responsibilities for delivering specific processes and functions, as well as for performing the work. Outsourcing contracts include
negotiated service level agreements (SLA's) that specify the outsourcer services, responsibilities, and performance levels to assure quality results.
Each utility is determining its own balance between company employees, contractors, and outsourcers with some utilities contracting everything except the core asset ownership responsibilities while other utilities are pulling most of their work in-house.
Using the Web to Empower Contractors
One of the barriers to effective contracting is the effort required to manage contractors and to record contractor work into the company’s permanent records. This problem is not unlike the organizational silos, discussed earlier in this article, that prevent office and field workers from working effectively.
Most utilities rely on server/desktop systems such as work management, financial systems, and GIS to streamline their in-house work processes. But the utility often restricts contractor access to the systems for security reasons.
The barriers to effective contracting can be substantially reduced if the utility treats the contractor more nearly as a partner, increases the share of the work the contractor performs, and provides access to the company’s computer systems through secure portals.
For example, the following procedure increases contractor productivity. Assuming the contractor has a standing agreement with the utility, the utility defines the work at a high level and makes it available in the contractor’s office via the Internet through a secure portal. Contractor system access is limited to the contractor’s needs (for example, the contractor can’t view work assigned to others). The contractor accepts the work, does any design, permitting, material requisition, and construction, and then records the detailed construction through the Internet portal via the same systems the utility uses. The contractor’s involvement ends with the submittal of an invoice via the web.
Advantages of this approach include:
• Contractor performs more of the work, presumably at a lower total cost
• As-built records are updated quickly and accurately by the contractor
• Contractor management efforts are reduced
• Redundant paperwork and data entry are eliminated
• Asset posting backlogs are eliminated
Dramatic Improvements
Leading utilities are taking aggressive steps to manage their assets better, find new ways to reduce their costs, and provide better and more reliable service. Recognizing they are asset owners in asset-intensive companies, they are maximizing the effective lives of their assets and controlling total cost of ownership. They are implementing new systems and an asset repository with enterprise access including field workers. These utilities are changing their cultures, unifying their office and field workers, and instituting new business processes to improve performance.
The lines between "office" and "field" are blurring as the utilities recognize that work is the same regardless of where it is performed. Leading utilities are also re-examining such alternatives as contracting and outsourcing and transferring business processes and accountability to third-party entities to reduce costs and increase reliability.
In a tough economic environment where many utilities have taken the easy benefits,
utilities are finding new approaches such as these to move to the next level of effectiveness and achieve dramatic business improvements.
About the Author
Chuck Drinnan is Executive Consultant for LogicaCMG’s energy and utilities division located in Houston, Texas. He has over 30 years of experience in asset and resource management for the utility industry. Chuck can be reached at chuck.drinnan@logicacmg.com or call 1-800-334-7101.
LogicaCMG is a global IT solutions company,
providing systems integration, consulting, products and services. LogicaCMG’s Asset and Resource Management (ARM) product suite includes work management, mobile computing, asset management, compliance tracking, scheduling, and reporting capabilities delivered as a pre-integrated, seamless solution. For additional information visit the LogicaCMG web site at www.logicacmg.com/us.
