Designing a disruptive digital solution for the Energy & Utilities sector

By Roland Schneiders

I’m Roland Schneiders, Head of Services of Smart O&M — ENGIE group’s operations and maintenance solution. I oversee Smart O&M’s feature development to offer our business activities maximum value and provide ENGIE’s maintenance teams with optimum user experience. Now that our solution is widely considered to be valuable, I want to share some key insights I have gathered over the last decades working hands-on in Digital & Utilities. I hope my experience will be useful for colleagues in the sector who want to develop the most relevant digital solutions with added business value and that you will maybe learn from the challenges I came across.

I studied mechanical engineering and started my career as an Automation Engineer in the Netherlands where I led major industrial projects to optimize production lines in different industries. Over time, as I worked for different entities within the ENGIE group, I became familiar with maintenance activities and service contracts (including SLAs, customer relationship, preventive vs corrective actions, trade-offs, and optimization). I initially focused on OT systems (Operational Technology) and then my career shifted when I had the opportunity to work on a major datacenter design, build and operations project. I discovered that the technology used to monitor and optimize IT and digital system management were far more advanced compared to those in the traditional OT world. It was then that I had my first intuition, which led me some years after, to design Smart O&M. The idea was to upgrade standard operations with innovative digital capabilities: live data monitoring; energy consumption analysis; and ticketing to manage operators’ actions. The questions at the time were: how can this idea be translated into actual solutions to optimize maintenance operations performance, and would there be a business opportunity for it?

How the digital transition affected the operations and maintenance business

While I was mulling over these questions, I witnessed the considerable impact the digital revolution was having on the maintenance business. A new era was beginning: on-site operators were equipped with increasingly advanced devices and tools; and sharing procedures and controlling implementation, tracking actions (including time and material), minimizing the volume of unplanned activities were the new ways for optimizing operational performance. Maintenance providers’ benefits that came from digital must then be shared with clients. Competition between actors led prices to drop and forced companies to improve their own processes. Customer expectation for transparency was also impacted by digital technology: detailed operations reports were more frequently required to prove quality of service. This meant that maintenance companies had to design new types of commercial offerings: output-driven or performance-based. The common denominator of the latter was to sell installation/equipment availability or fixed price for a defined scope of service. In the utility sector, the standard was EPC (Energy Performance Contracting), where actors were able to rely on their know-how to guarantee energy savings for customers and offer them best value procurement, meaning the best value for an acceptable price.

Digital enablers

Digital technologies were very promising enablers in extending this strategy: big data overwhelmed innovation and prospective departments in the utility industry. In a sector where equipment and technicians were generating massive amounts of operations-related data, it was obvious that there would be numerous use cases to create business value: condition-based maintenance; predictive maintenance; on-site augmented reality; and digital twins; etc. And to concretely support these use cases, we could rely on maturing technologies: powerful cheap mobile devices; light IOT sensors; and cloud computing. So, the main challenge was to combine technical capabilities with operational processes to support the new business offerings required to manage operational and financial risks and optimize asset performance whilst containing maintenance costs. In short, we had to design solutions to leverage real-time 360° information, which provided detailed information and guidance for users, and which encouraged transversal communication and collaboration. The main purpose of my digital journey within ENGIE has been to address the following challenge: provide users with an easy, attractive solution that supports them in implementing the overall Group business strategy.

How to develop, and run, a digital solution to disrupt maintenance activities

I have been busy with this challenge for the last 15 years! And I have developed successive versions of digital solutions to optimize maintenance operations for different types of installations. You could say it was like being agile before “Agile” came along. There are a few take-aways to share from this experience, which are not always intuitive or easy to say openly on LinkedIn!

A complex stakeholder chain

“Any digital product journey requires identifying users and understanding their business activities and expectations.”

In the utility sector, the business need is often straightforward: everyone wants an installation or equipment to be functioning, ideally in an efficient way. But if we look more closely at the maintenance ecosystem, you can see that the stakeholder chain is quite complex:

• Technicians want to work as quickly as possible — they like tools such as GPSs, and weather forecasts, etc.
• Operations managers want to steer technicians’ activities — they like ticket overviews and installation status
• Contract managers want to maximize profitability — they like automated, insightful dashboards in line with the SLAs defined with customers
• Client asset owners are looking for service provider performance — they like contractual reports, better transparency, and real-time contractor performance overviews
• Client technical managers want to control installation status — they like equipment condition and performance status reports, and regulatory compliance
• Installation users want to benefit from the installation — they like tools to report complaints and request services

Given this complexity, you must start by building a vision of the digital target. You will have to listen to business managers to understand their company strategy, to operational users to picture their day-to-day constraints, and to sector experts to anticipate context evolutions, and then come up with your own plan of action.

It is only after this point that you can work on designing a solution, which will support the implementation of required maintenance use cases. And during this process, if you get the feeling that you are just replicating an existing set of business processes, with no other change than a better interface, then stop and review your vision.

4 best practices for building an efficient solution

The next question is how to build a good solution? Beyond choosing a methodological agile framework, which is always required to structure organization and work methods, I would like to point out a few vital must-dos.

1. Feature production

When designing features, you must make generic technical capabilities easy to combine and configure, and easily adjustable to support various functional implementation methods. In utility maintenance services, activities, installations, and contracts are often quite similar but their combination is always very specific.

2. Team and product management

You need to both convince and trust the team to carry out the vision. But it is quite hard to communicate as there are two aspects to consider:

• Use case — Feature implementation — Technical capability configuration is the world of business
• Technical design — UI components — Software engineering methods is the world of products

Based on the time available and each team member’s specific expertise (business analysts, product owners, UX designers, software architects, scrum masters, developers, and QAs, etc.) not everyone will understand the full picture. So, it makes sense to share the vision, but you must rely on a few trustworthy relays to manage delivery continuity. “A strong network of key people is one of the main factors for success.”

3. Anticipating the solution’s implementation

You need to provide the user with a solution, which can be open, modular, and flexible, to simplify integration to a specific local context. Don’t forget that your solution will have to:

• Interact with an existing IT eco-system, as green fields are quite rare. You must be ready to deploy useful features within the full constraints of legacy landscapes
• Face actual real-life obstacles. You must apply the 80–20 rule to keep resources for later adjustments rather than spending too many resources trying to prevent all possible edge cases. Make pragmatic and fair trade-offs between time-to-market, user adoption, and business value, before going live and then complete the solution based on priorities

4. Mindset and behavior towards stakeholders

You will often be torn between pulling opinions and pushing convictions, but the most important thing is how to choose when to do what:

• During the design research phase, don’t listen to user feature suggestions before understanding the end-to-end business process
• During the build phase, stay firm in making decisions aligned with the vision, no decision is worse or more costly than reversing a decision after 3 months
• Pick intermediate presentation steps wisely to be sure to make a good impression, as a negative buzz and distrust can kill your product. Prepare a specific demo speech for the management, business development, and operations teams to show that every version of the solution supports workable and valuable use cases
• Don’t die with your ideas when testing the solution on the field: you need to firmly believe your vision, but you will always have to adjust it to actual stakeholder feedback. There are many ways to shape the features, be ready to change and adapt so that they can be delivered
• When rolling out, be humble with operational users and assertive with strategy managers, this is the best way to promote your solution
• After the roll out, you must remember that product development is a never-ending story: to stay ahead of the game, you must look for more business value rather than technological innovation (this can guide you when deciding whether you must extend horizontal coverage and deepen verticals by taking market standards into account)

I hope that you can build an attractive, successful solution by following these best practices. Now, let’s see how to ensure that a digital maintenance business tool is a success.

Ensure maximum value for utility organizations

There is no simple way to know whether a solution is good! You cannot use standard B2C KPIs to assess a digital solution in the maintenance services. Basically, time spent on the solution is time not spent performing technical tasks on equipment, which is the core activity of our users. So, if users seem very involved in the application, it can mean either that it is very insightful or that it is difficult to use and doesn’t suit their daily needs.

You can easily check if your solution is good by directly asking users if they are happy with it. However, this approach also has its limits. If you choose to launch a quantitative survey, there will be biases, like:

• Misleading questions (Are you happier with this solution rather than another/no solution? Could it be improved? etc.)
• Most respondents are often people with complaints
• People often try to provide the answer they think the management team is expecting

It makes more sense to opt for a qualitative methodology. The main limit is that you cannot interview all users, so how will you select a representative sample? And how will you assess your solution’s global impact?

Other indirect indicators help to evaluate feature quality: you can compare overall team and contract performance where your solution is implemented with other similar business contexts. This must reflect whether your solution is contributing to value creation in distinct organizational setups. However, the reasons behind better performance can be other than a digital solution. Plus, in the utilities industry, performance is not always easy to evaluate depending on whether you focus on operational productivity, installation availability, energy efficiency, or financial profitability.

It appears that assessing a digital solution’s value requires combining several methodologies. But it also seems that the quality of the solution cannot be assessed by itself, as what is assessed at the end of the day is how users leverage it to perform their own business activities. A solution’s value highly depends on how it is adopted within processes. In the utilities sector, and more precisely in maintenance, where traditionally the experience of technology is quite limited, you could even say that a just-good-enough solution would generate more business value than an optimal one if it is largely used and effectively supports users’ processes.

As a result, a robust vision is required to build a good solution but also to promote change throughout the stakeholder chain. Besides software development, you need to make a considerable effort to drive adoption:

• Communicate about value for each user profile to make it attractive
• Provide training material and detailed examples on how to implement use cases
• Organize specific teams to spend time on change management to help users get started

Doing this downwards of software development is a way to efficiently collect useful team feedback to fine-tune the solution and make it even more valuable for users’ business activities, rather than spending months with upfront in-depth research, design thinking, and edge case analysis. This is one of the key specific aspects of our approach with Smart O&M, which makes it successful in delivering real value to ENGIE O&M services.

Knowing when your solution is ready

I hope my experience will help you when you’ll be working on your next digital applications. I’d like to conclude with a last thought.

“Even if product development is a never-ending story, at some point you need to stop growing the functional scope of a solution to make it run sustainably.”

How do you know that a solution is ready? Here are a few tips which you can complete with your own experience!

1. When most user feedback is more focused on usability rather than on new features
2. When your benchmarks/market studies show that there is no obvious mature feature that competitors include in their own solutions
3. When the solution is delivering value in line with the using entities’ business strategy according to its business processes and maturity

When you reach this point, you need to finalize API and data-sharing features. For maintenance activities in the energy/utilities sector, the future is resolutely being designed by AI: predictive maintenance; schedule optimization; and automatic remote control based on installation usage to automatically optimize energy performance.

Next steps…

Once your solution is successfully up and running, it must be ready to cope with integration with the next digital game changers when they shift from the advanced innovation stage to market standard.

And, be prepared for this, because this is more than likely to happen, as going for asset-based and performance as-a-service offerings seems to be an inexorable trend to preserve profitability of large-scale service providers.