Learning by Doing

I recently read a survey where utility executives were asked about the challenges that they are facing. You can find the survey here:

The State of the Electric Utility 2015 (utilitydive.com)

This makes for interesting reading once you have downloaded the report. One of the findings is that the utilities are developing new business models for multiple new services including distributed generation, demand response and electric vehicles. At the same time they are working on the regulation and worrying about their own role in the future. Overall it does seem that there are a lot of things to worry about and very little of the future business is based on something that is available or even known today.

All of the above makes decision-making more difficult than ever, both from a technology and a business point of view. The complexities and unknowns make investments very difficult and therefore practical decisions get delayed. This is also true of the IT decisions and solutions. In most cases the old IT solutions were originally developed for the old paradigms in the electricity industry, they were developed for a particular purpose and their further development is costly. Even the maintenance of the old systems costs a significant amount of money.

So this raises questions like “What are we supposed to do to get answers on some of these questions?” and “How much is that going to cost us to develop the new systems?”. Knowing the high cost of IT development it seems logical to continue gradually developing new features and functions to the current systems and hope to maintain pace with the market development. A significant investment has already been made into the existing systems, therefore they should continue to be used, right?

Wrong. The new systems should be designed for the new services, rather than try to create the new services and business models around the capabilities of the old legacy systems. The shortcomings, missing features and lack of interfaces will eventually slow down the development and there is a high likelihood that the cost will ultimately be significantly higher in the case that the old systems are used for new services. This is due to the fact that the development is highly-tailored, available only from a single source and that the systems will need to continue to serve their original purpose as well.

So what is the right answer for the IT development for new services? In our opinion the new services should be  trialled in stand-alone, brand-new IT systems that can be developed more rapidly and that are used to launch the initial services for the trial or pilot users. The development of these new IT systems should take into account the current IT infrastructure, but not be limited by it. This allows the IT to be developed on a trial-and-error basis early on, but by taking into account the need for integration we can design the necessary interfaces and data structures to use the existing IT systems where applicable.

Trial-and-error is still a good way to learn when one is going through a major transformation. Staying still and doing nothing is not an option, in all likelihood it guarantees a slow slide into obsolescence and that is not something one should strive for.

done in the existing systems.

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