Publisher’s Note: With this first issue of 2007, it is my pleasure to introduce a new feature focused on T&D automation and information technology: The Automation/IT Leadership Series. This series of interviews with top executives at leading utility automation and information technology companies will provide readers with valuable insights about how the automation/IT industry is addressing new challenges in the 21st century and how they are changing, adapting and investing to meet those needs. Mike Marullo, the Automation/IT and Utility Horizons editor for Electric Energy T&D, will conduct the interviews and deliver unique perspectives found only in EET&D. I trust you will find these dialogs both interesting and informative. As always, your feedback is welcome and encouraged.
Welcome to the first installment of Electric Energy’s Automation/IT Leadership Series – This series of interviews with top executives at leading utility automation and information technology companies will provide readers with valuable insights about how the automation/IT industry is addressing the new challenges of the 21st century and how they are changing, adapting and investing to meet those needs.
This month, our spotlight is on the executive management team at Telvent – a leading global automation and IT company with North American headquarters in Calgary, Alberta (Canada) and Houston, Texas (USA). Dave Jardine, Chairman and President of Telvent in North America (NASDAQ:TLVT) heads Telvent’s North American operations. Joining Dave for this session is Larry Stack, president of the newly formed Telvent Energy. Several other changes are also in the wind at Telvent, so we are pleased to be able to provide insights from these key executives just as the curtain is unfolding on their vision and plans for 2007 and beyond…
EET&D: As an organization that has been through lots of changes over the past two decades, Telvent has managed to grow and integrate new products and even entirely new businesses without losing its central focus and momentum. To what do you attribute this resiliency and dedication to purpose?
Jardine: There are four key factors that I believe have allowed us to succeed in critical areas of organizational changes where many others have had significant difficulties and even outright failures. The first – and most important, I think – is the continuity of our core management team. Even though we have been through a number of ownership changes since we began in the 1970s, our critical mass of human resources has remained largely intact. This is especially important for technology companies; you literally lose decades of talent, experience and know-how every time someone walks out the door.
Second, we have carefully expanded our portfolio of products, solutions and services with targeted acquisitions in a way that have consistently delivered higher values through what we call deep integration. That is, pieces that fit a specific set of needs as opposed to the common practice of buying other companies based primarily on financial metrics and hoping to make the synergy work after the fact.
Third, we’ve enjoyed continued success in growing the business profitably. Our long-term financial stability has allowed us to do far more of what we want to do rather than just what we have to do. Rather than being constantly distracted by basic survival strategies – a posture that has dictated the development path for a lot of suppliers to this industry for decades – our long-term stability has allowed us to maintain a tight focus on target markets while steadily increasing our footprint of products, solutions and services tailored to specific market needs.
Fourth, our customer relationships has remained strong and supportive of our vision as a global automation/IT provider. Besides the determination and commitment of a contiguous executive team, our focus on products, applications and solutions is routinely derived from very close relationships with our customers.
For example, we have a very diverse and proactive user group that has been instrumental in driving our R&D efforts over the years. This helps enormously to gain rapid product acceptance rather than depending on massive market pushes to accomplish that same objective. Moreover, our strategic focus is to develop Telvent as a business partner to our customers and support them to the best of our ability as they face enterprise integration challenges, whether rooted in regulatory compliance, security, environmental issues, technology, efficiency or other areas.
And finally, we have maintained a personal discipline across our organization to meet our commitments to all stakeholders. Simply stated, we pride ourselves on doing what we say we will; everyone at Telvent is committed to that principle.
EET&D: I also understand that Telvent has put a new corporate structure in place for 2007. Can you shed some light on how this new organization might affect the marketplace at large for our readers?
Jardine: I should probably start by giving you a quick overview of what we’re doing at the corporate level, since the goals and objectives for our energy market involvement are substantially driven by Telvent’s global IT vision addressing multiple market sectors. The new structure organizes the company into five major operating units, each of which has a global mandate:
As part of this realignment I’m very pleased to announce that Larry Stack, a 27-year veteran of our organization who was previously Executive Vice President & CTO, will be leading Telvent Energy. This new Energy business unit includes electric, water and gas utility, and telecommunications, as well as oil, gas and petrochemical markets. I’ll turn this over to Larry for more on the role of Telvent Energy in 2007 and beyond…
Stack: Telvent Energy will bring enhanced talent, focus and resources to these vital market areas and will have the full dedication and support it needs to further expand its products and services, while continuing to provide top rate support for our installed base of SCADA, process automation and IT installations worldwide.
Like our other businesses, Telvent Energy is a global entity that will draw upon centers of excellence from around the world to help solve the industry’s most daunting problems. Telvent Energy comprises our second largest business unit bringing together R&D, Product Management, Operations, and Sales & Marketing resources from all parts of Telvent’s global operations.
EET&D: What about Telvent’s current and future customers in the energy and utility marketplace? What should they expect the impact of this new Telvent Energy organization to be on those special relationships?
Jardine: Telvent Energy represents one of the broadest and most integrated sets of automation/IT-centric products, services and value-added solutions available across the energy and utility marketplace. Moreover, it leverages our geographically diverse customer base and expertise accumulated over more than three decades of involvement.
Clearly, the challenges we face as an industry are in many ways unprecedented and will require much more than just technological ability to meet and overcome; financial and organizational strength will also be vitally important ingredients in the success of any company involved in the automation/IT business.
From this point forward, solving the changing – and arguably the most challenging – needs of energy and utility enterprises must be backed by strong, stable organizations capable of delivering fully integrated products, solutions and services with a greater depth and breadth than ever before.
EET&D: Shifting now to the energy market itself and the electric utility sector in particular, what do you feel are the biggest challenges that utilities face when it comes to automation and IT planning, design, implementation and support over say, the next 3-5 years?
Jardine: Well, that’s quite an all-encompassing question, so let me address some broad issues first, and then Larry can probably add more detail from the Telvent Energy perspective.
Obviously, all of the challenges that utilities are facing would make for a very long list, but I believe that the integration of real-time operational systems with the business IT systems needed to facilitate business decision making in a timely, consistent and effective manner must certainly be near or at the top of that list.
As an automation/IT supplier, we believe in the concept of “meter-to-boardroom” process and data continuity across the IT infrastructure and security perimeter including data validation, enterprise integration with legacy systems and timely data delivery to critical customer service processes. Over the last few years Telvent has both developed and acquired specialized technologies and expertise in traditional data acquisition subsystems, enterprise GIS, and mobile workforce solutions as well as advanced operational and business applications. These strategic investments allow our customers to take a series of incremental steps that not only ease the technical, operational and economic burdens of system migration in the short-term but that also buy valuable time needed to deal with the longer term problems precipitated by lagging T&D investment, workforce deficits and security enhancements for critical infrastructure. Within that context, there are at least three areas of attention that immediately come to mind; those being Security, Human Resources and Communications. Larry may have some others to add, but those three are key in my mind.
EET&D: Okay, let’s take those one at a time, starting with Security. How do you see the security issue ultimately being resolved with so many critical infrastructure systems already deployed and so many new ones coming on line? And, is it feasible to retrofit legacy installations or is that just a futile exercise?
Jardine: Security issues hit the industry like an avalanche following 9-11, so Telvent (as did many companies) initially tried to retrofit existing systems with levels of critical infrastructure security that we felt could be both acceptable and affordable to our customers. We quickly found that to be an insurmountable task since security requirements and standards were then – and are still – evolving.
It soon became obvious that following a path of putting band-aids on existing systems would result in something that would quickly become inflexible and ultimately impossible to maintain as the industry adapted to the changing requirements. So, we went back and built security and the corresponding standards into the lower levels of system platforms based on which future applications could accommodate both a suitable and an acceptable level of security for each application. EET&D: Another issue that has gotten a lot of press lately is the looming human resources crisis. We all know that the utility industry stands to incur an unprecedented loss of people, talent and experience over the next decade as Baby Boomers retire. How do you see the industry bridging this gap, especially at a time when engineering and computer science graduates are at an all-time low?
Jardine: Well, most importantly, I think it’s a given that automated solutions can no longer be perceived as merely an available option, but instead must be embraced as a vital set of problem-solving tools. As you may recall, we had an extended low-to-no hiring period during the “right-sizing” craze, which began in the early 1990s. That hiring gap left a staffing dead band spanning up to ten years, further exacerbating the disruption of what I call the “human architecture” of the enterprise. As a result, automation will have to bridge the widening gap between front office and back office functions that were previously fulfilled by people.
EET&D: Let’s move on to communications technologies – and the corresponding standards – that are being cranked out at a feverish pace as well as the utilities’ rising interest in broadband over power line (BPL) and other leading edge alternatives to leased lines and radios. Where do you think future automation/IT networks are headed?
Jardine: Utilities will be making some landmark decisions over the next few years regarding the selection, procurement and deployment of communications technologies. Clearly, there are many choices available, but not all necessarily help utilities manage their telecommunications and information technology systems with the same level of efficiency. In the past, communications solutions have typically been evaluated separately from automation/IT initiatives, but unless utilities make communications an integral part of a total integrated business solution, the outcome probably won’t deliver the desired results or benefits. Larry may want to elaborate further on that point…
Stack: Let me just add that I believe utilities should first identify and leverage the opportunities already residing in their existing communications infrastructure. But, at the same time, they must also recognize that large telecommunications infrastructures might no longer deliver the desired cost effectiveness or a proper fit for all of their future enhancements or expansion needs.
When evaluating newer communications platforms, utilities should make selections based on the ones that can best meet their future plans while supporting their business model and its economic goals across the applications that will use those platforms rather than just focusing on just one application or only a single technology.
That is, future communications solutions will often involve multiple technologies including wired, wireless, radio, broadband, etc. working in complex meshed networks that allow the user to gather and distribute information whenever and wherever it may be needed on a virtually instantaneous basis.
EET&D: Is there anything else either of you would like to add to the discussion before we end?
Jardine: Yes, I think we should probably say something about the amount of time and money that has been – and will continue to be – spent on preventing future outages, especially those on the scale of the August 2003 Blackout. In particular, I want to point out here that there are also some implications for security.
One of the keys to improving both pre-emptive strikes and emergency response is the use of more accurate and timely information. Most legacy OMS projects were very focused on good performance for specific dispatching operations, but did not have that same degree of focus on data utilization, openness or integration.
The fact is, building and maintaining a highly detailed picture of the network has typically been more than most companies could do, and bringing in real-time and highly aggregated historical data was a pipe dream for many. As a result, many companies were – and are still – operating today with a very limited picture of the electrical network (e.g., primary backbone only or highly simplified secondary networks), with little or no real-time or actual historical data, even though the tools are there to take it to the next level.
Stack: That’s right. I’ll just add that the best performing utilities of the future will use spatial data to model the details of electric networks, thereby sustaining and improving that data as a part of their normal workflow. By marrying that spatial information with accurate real-time and historical data, managers and dispatchers will be able to use that information in a decision support system to make real-time and “near-real-time” choices about the best way to improve network performance and reliability.
EET&D: One last issue that we’ve been watching closely is the ongoing debate over operating system alternatives and selections. We’ve seen the transition from proprietary operating systems for automation/IT to UNIX and eventually to Microsoft Windows. Now, many are saying that Windows is a security disaster and Microsoft’s soon-to-be-released Vista OS – though reportedly better equipped to deal with malware – leaves a lot of questions unanswered, pending its formal release. Meanwhile, Linux has also made steady advances into the automation/IT environment. Do you have any final comments on this topic?
Jardine: Mike, I’m afraid I’ll have to answer that question with another question, not only so your readers will have something to think about, but also because the question may not have the kind of answer you might otherwise expect. Consider this: As the data acquisition and control subsystems and advanced application environments of the future become truly integrated functions of the business IT environment, will the operating system even matter?
EET&D: Good point. Maybe some of our readers will be inclined to address that question and share their views on this controversial topic with us in a future issue. (Please send your comments to MAM@ElectricEnergyOnline.com.)
- Steven Desrochers, Publisher
Electric Energy Publications
Welcome to the first installment of Electric Energy’s Automation/IT Leadership Series – This series of interviews with top executives at leading utility automation and information technology companies will provide readers with valuable insights about how the automation/IT industry is addressing the new challenges of the 21st century and how they are changing, adapting and investing to meet those needs.
This month, our spotlight is on the executive management team at Telvent – a leading global automation and IT company with North American headquarters in Calgary, Alberta (Canada) and Houston, Texas (USA). Dave Jardine, Chairman and President of Telvent in North America (NASDAQ:TLVT) heads Telvent’s North American operations. Joining Dave for this session is Larry Stack, president of the newly formed Telvent Energy. Several other changes are also in the wind at Telvent, so we are pleased to be able to provide insights from these key executives just as the curtain is unfolding on their vision and plans for 2007 and beyond…
EET&D: As an organization that has been through lots of changes over the past two decades, Telvent has managed to grow and integrate new products and even entirely new businesses without losing its central focus and momentum. To what do you attribute this resiliency and dedication to purpose?
Jardine: There are four key factors that I believe have allowed us to succeed in critical areas of organizational changes where many others have had significant difficulties and even outright failures. The first – and most important, I think – is the continuity of our core management team. Even though we have been through a number of ownership changes since we began in the 1970s, our critical mass of human resources has remained largely intact. This is especially important for technology companies; you literally lose decades of talent, experience and know-how every time someone walks out the door.
Second, we have carefully expanded our portfolio of products, solutions and services with targeted acquisitions in a way that have consistently delivered higher values through what we call deep integration. That is, pieces that fit a specific set of needs as opposed to the common practice of buying other companies based primarily on financial metrics and hoping to make the synergy work after the fact.
Third, we’ve enjoyed continued success in growing the business profitably. Our long-term financial stability has allowed us to do far more of what we want to do rather than just what we have to do. Rather than being constantly distracted by basic survival strategies – a posture that has dictated the development path for a lot of suppliers to this industry for decades – our long-term stability has allowed us to maintain a tight focus on target markets while steadily increasing our footprint of products, solutions and services tailored to specific market needs.
Fourth, our customer relationships has remained strong and supportive of our vision as a global automation/IT provider. Besides the determination and commitment of a contiguous executive team, our focus on products, applications and solutions is routinely derived from very close relationships with our customers.
For example, we have a very diverse and proactive user group that has been instrumental in driving our R&D efforts over the years. This helps enormously to gain rapid product acceptance rather than depending on massive market pushes to accomplish that same objective. Moreover, our strategic focus is to develop Telvent as a business partner to our customers and support them to the best of our ability as they face enterprise integration challenges, whether rooted in regulatory compliance, security, environmental issues, technology, efficiency or other areas.
And finally, we have maintained a personal discipline across our organization to meet our commitments to all stakeholders. Simply stated, we pride ourselves on doing what we say we will; everyone at Telvent is committed to that principle.
EET&D: I also understand that Telvent has put a new corporate structure in place for 2007. Can you shed some light on how this new organization might affect the marketplace at large for our readers?
Jardine: I should probably start by giving you a quick overview of what we’re doing at the corporate level, since the goals and objectives for our energy market involvement are substantially driven by Telvent’s global IT vision addressing multiple market sectors. The new structure organizes the company into five major operating units, each of which has a global mandate:
- Energy
- Environment
- Transportation
- Public Administration & Health Care
- Outsourcing
As part of this realignment I’m very pleased to announce that Larry Stack, a 27-year veteran of our organization who was previously Executive Vice President & CTO, will be leading Telvent Energy. This new Energy business unit includes electric, water and gas utility, and telecommunications, as well as oil, gas and petrochemical markets. I’ll turn this over to Larry for more on the role of Telvent Energy in 2007 and beyond…
Stack: Telvent Energy will bring enhanced talent, focus and resources to these vital market areas and will have the full dedication and support it needs to further expand its products and services, while continuing to provide top rate support for our installed base of SCADA, process automation and IT installations worldwide.
Like our other businesses, Telvent Energy is a global entity that will draw upon centers of excellence from around the world to help solve the industry’s most daunting problems. Telvent Energy comprises our second largest business unit bringing together R&D, Product Management, Operations, and Sales & Marketing resources from all parts of Telvent’s global operations.
EET&D: What about Telvent’s current and future customers in the energy and utility marketplace? What should they expect the impact of this new Telvent Energy organization to be on those special relationships?
Jardine: Telvent Energy represents one of the broadest and most integrated sets of automation/IT-centric products, services and value-added solutions available across the energy and utility marketplace. Moreover, it leverages our geographically diverse customer base and expertise accumulated over more than three decades of involvement.
Clearly, the challenges we face as an industry are in many ways unprecedented and will require much more than just technological ability to meet and overcome; financial and organizational strength will also be vitally important ingredients in the success of any company involved in the automation/IT business.
From this point forward, solving the changing – and arguably the most challenging – needs of energy and utility enterprises must be backed by strong, stable organizations capable of delivering fully integrated products, solutions and services with a greater depth and breadth than ever before.
EET&D: Shifting now to the energy market itself and the electric utility sector in particular, what do you feel are the biggest challenges that utilities face when it comes to automation and IT planning, design, implementation and support over say, the next 3-5 years?
Jardine: Well, that’s quite an all-encompassing question, so let me address some broad issues first, and then Larry can probably add more detail from the Telvent Energy perspective.
Obviously, all of the challenges that utilities are facing would make for a very long list, but I believe that the integration of real-time operational systems with the business IT systems needed to facilitate business decision making in a timely, consistent and effective manner must certainly be near or at the top of that list.
As an automation/IT supplier, we believe in the concept of “meter-to-boardroom” process and data continuity across the IT infrastructure and security perimeter including data validation, enterprise integration with legacy systems and timely data delivery to critical customer service processes. Over the last few years Telvent has both developed and acquired specialized technologies and expertise in traditional data acquisition subsystems, enterprise GIS, and mobile workforce solutions as well as advanced operational and business applications. These strategic investments allow our customers to take a series of incremental steps that not only ease the technical, operational and economic burdens of system migration in the short-term but that also buy valuable time needed to deal with the longer term problems precipitated by lagging T&D investment, workforce deficits and security enhancements for critical infrastructure. Within that context, there are at least three areas of attention that immediately come to mind; those being Security, Human Resources and Communications. Larry may have some others to add, but those three are key in my mind.
EET&D: Okay, let’s take those one at a time, starting with Security. How do you see the security issue ultimately being resolved with so many critical infrastructure systems already deployed and so many new ones coming on line? And, is it feasible to retrofit legacy installations or is that just a futile exercise?
Jardine: Security issues hit the industry like an avalanche following 9-11, so Telvent (as did many companies) initially tried to retrofit existing systems with levels of critical infrastructure security that we felt could be both acceptable and affordable to our customers. We quickly found that to be an insurmountable task since security requirements and standards were then – and are still – evolving.
It soon became obvious that following a path of putting band-aids on existing systems would result in something that would quickly become inflexible and ultimately impossible to maintain as the industry adapted to the changing requirements. So, we went back and built security and the corresponding standards into the lower levels of system platforms based on which future applications could accommodate both a suitable and an acceptable level of security for each application. EET&D: Another issue that has gotten a lot of press lately is the looming human resources crisis. We all know that the utility industry stands to incur an unprecedented loss of people, talent and experience over the next decade as Baby Boomers retire. How do you see the industry bridging this gap, especially at a time when engineering and computer science graduates are at an all-time low?
Jardine: Well, most importantly, I think it’s a given that automated solutions can no longer be perceived as merely an available option, but instead must be embraced as a vital set of problem-solving tools. As you may recall, we had an extended low-to-no hiring period during the “right-sizing” craze, which began in the early 1990s. That hiring gap left a staffing dead band spanning up to ten years, further exacerbating the disruption of what I call the “human architecture” of the enterprise. As a result, automation will have to bridge the widening gap between front office and back office functions that were previously fulfilled by people.
EET&D: Let’s move on to communications technologies – and the corresponding standards – that are being cranked out at a feverish pace as well as the utilities’ rising interest in broadband over power line (BPL) and other leading edge alternatives to leased lines and radios. Where do you think future automation/IT networks are headed?
Jardine: Utilities will be making some landmark decisions over the next few years regarding the selection, procurement and deployment of communications technologies. Clearly, there are many choices available, but not all necessarily help utilities manage their telecommunications and information technology systems with the same level of efficiency. In the past, communications solutions have typically been evaluated separately from automation/IT initiatives, but unless utilities make communications an integral part of a total integrated business solution, the outcome probably won’t deliver the desired results or benefits. Larry may want to elaborate further on that point…
Stack: Let me just add that I believe utilities should first identify and leverage the opportunities already residing in their existing communications infrastructure. But, at the same time, they must also recognize that large telecommunications infrastructures might no longer deliver the desired cost effectiveness or a proper fit for all of their future enhancements or expansion needs.
When evaluating newer communications platforms, utilities should make selections based on the ones that can best meet their future plans while supporting their business model and its economic goals across the applications that will use those platforms rather than just focusing on just one application or only a single technology.
That is, future communications solutions will often involve multiple technologies including wired, wireless, radio, broadband, etc. working in complex meshed networks that allow the user to gather and distribute information whenever and wherever it may be needed on a virtually instantaneous basis.
EET&D: Is there anything else either of you would like to add to the discussion before we end?
Jardine: Yes, I think we should probably say something about the amount of time and money that has been – and will continue to be – spent on preventing future outages, especially those on the scale of the August 2003 Blackout. In particular, I want to point out here that there are also some implications for security.
One of the keys to improving both pre-emptive strikes and emergency response is the use of more accurate and timely information. Most legacy OMS projects were very focused on good performance for specific dispatching operations, but did not have that same degree of focus on data utilization, openness or integration.
The fact is, building and maintaining a highly detailed picture of the network has typically been more than most companies could do, and bringing in real-time and highly aggregated historical data was a pipe dream for many. As a result, many companies were – and are still – operating today with a very limited picture of the electrical network (e.g., primary backbone only or highly simplified secondary networks), with little or no real-time or actual historical data, even though the tools are there to take it to the next level.
Stack: That’s right. I’ll just add that the best performing utilities of the future will use spatial data to model the details of electric networks, thereby sustaining and improving that data as a part of their normal workflow. By marrying that spatial information with accurate real-time and historical data, managers and dispatchers will be able to use that information in a decision support system to make real-time and “near-real-time” choices about the best way to improve network performance and reliability.
EET&D: One last issue that we’ve been watching closely is the ongoing debate over operating system alternatives and selections. We’ve seen the transition from proprietary operating systems for automation/IT to UNIX and eventually to Microsoft Windows. Now, many are saying that Windows is a security disaster and Microsoft’s soon-to-be-released Vista OS – though reportedly better equipped to deal with malware – leaves a lot of questions unanswered, pending its formal release. Meanwhile, Linux has also made steady advances into the automation/IT environment. Do you have any final comments on this topic?
Jardine: Mike, I’m afraid I’ll have to answer that question with another question, not only so your readers will have something to think about, but also because the question may not have the kind of answer you might otherwise expect. Consider this: As the data acquisition and control subsystems and advanced application environments of the future become truly integrated functions of the business IT environment, will the operating system even matter?
EET&D: Good point. Maybe some of our readers will be inclined to address that question and share their views on this controversial topic with us in a future issue. (Please send your comments to MAM@ElectricEnergyOnline.com.)
