Written by Michael Cocroft, Managing Partner and CSO for Red Clay

Over the last two decades, utilities have been pressed to modernize information technology (IT) at a growing pace. Circa 2000, when Red Clay started our journey, many utilities opted for a tangible approach to managing systems. Mainframe, networks and PCs were the preferred solution so the only choice was to:

  • Go through a cumbersome procurement and implementation process
  • Build an organization to support our systems
  • Host, manage and upgrade them in-house

This has been such a heavy lift for utilities, that there hasn’t been much time to look up, see where the industry is heading and put plans in place to move steadily in the same direction.

Where does this leave us today?

As an industry, we are coming face-to-face with the fact that we did not:

  • Know that the increasing complexity of systems and networks would eventually create a scenario where IT management would become so resource-intensive and fast-moving that we wouldn’t be able to keep up
  • Realize that the demand for visibility into billing, balancing load with demand, and being responsive to customers will only grow
  • Prepare for an increase in data, which requires better means for ferreting out the information that will help operations personnel accomplish tasks effectively
  • Understand that there is always going to be more, so new opportunities to corral the beast should be at the forefront of business planning conversations

While this sounds like a lot of “did NOTS”, the good news is that someone DID.

Giving SaaS Solutions the Shoutout they Deserve

We’re halfway into 2021 and while a lot of things that the Jetson’s or Blade Runner promised haven’t transpired, a lot has thanks to Cloud Computing’s Software-as-a-Service (SaaS). Take Blade Runner’s Replicants or George Jetson’s maid-robot, Rosie. Harnessing the computing power into a robot brain to provide a truly sentient experience is possible today because of SaaS.

There has been enough education in recent years that nearly all utility professionals know what SaaS is and why it’s valuable. As a result, many are now traveling down the path of a Cloud-first IT transformation strategy which includes creating a roadmap for moving Systems of Innovation,  Systems of Differentiation or Systems of Record to a SaaS environment whereby there is an external connection (via the internet) to computing resources accessed.

It allows you to access them as if they were in your home or building with full support from a remote computer administrator, database administrator, network administrator and a huge IT team. Like system capacity, these resources can be scaled up and down as needed and you only pay for what you use. For example, there’s no IT spend for systems to be able to handle large batch processes. SaaS solutions are providing utility organizations with the advanced capabilities they need to lead in the new. We’re no longer tied to build to capacity, we’re only tied to capabilities, which we as a business define.

The Case for (SaaS) Managed Services

Because the Cloud hosting shifts IT responsibilities to a Cloud provider, the question utilities are asking is if they still need a third-party Managed Services provider to maintain and upgrade their applications, especially their Systems of Record like the Customer Information System (CIS) and Meter Data Management System (MDM).

Let me be the first to admit that at first blush this sounds like someone using your watch to tell you the time. But, in the age of Cloud computing, utilities that partner with a Managed Services provider (with deep SaaS expertise) are able to offload the entire ecosystem of IT system management and continuous system improvement activities to third-party experts.

The table below gives examples of what is typically handled by SaaS Providers versus Managed Services Providers:

  • Cloud Provider Roles
  • Ensuring network connectivity
  • Managing data security including malicious software and virus solutions
  • Conducting backups, disaster recovery and business continuity
  • Implementing upgrades and patches
  • Advising the utility on what capabilities are available, and how to achieve the most benefit
  • Be the middleman between the big SaaS provider, and the business, using knowledge of the business and the provider to seamlessly weave a complete offering
  • Facilitate the acceptance of upgrades through supporting the automation of regression testing
  • Managed Services Provider Roles
  • Guiding utility-specific IT strategy and growth management
  • Conducting business impact analysis
  • Conducting business impact analysis
  • Proactively watching for changes or updates, and communicating and/or training on those changes
  • Advising the utility on what capabilities are available, and how to achieve the most benefit
  • Be the middleman between the big SaaS provider, and the business, using knowledge of the business and the provider to seamlessly weave a complete offering
  • Facilitate the acceptance of upgrades through supporting the automation of regression testing

SaaS + Managed Services: A Case Study Perspective

“UtilCo” has a need to change rates and calculations because, after a very lengthy battle, it was finally able to close a rate case and now needs to put the new rates in place. “Joan”, a project manager, has been put in charge of the changes necessary to facilitate this in UtilCo’s systems.

In the old world, Joan and other internal folks would have been responsible for:

  • Planning and hosting team meetings
  • Identifying necessary changes
  • Allocating the right internal resources to make the changes
  • Developing and Managing the project plan
  • Developing a plan to support the systems involved to meet organizational SLAs
  • Meeting the deadlines and ultimately going live

Because Joan has a trusted third-party Managed Services provider—folks who do similar rate changes for utility companies around the country—she sends them a description of the rates and answers their questions.

What she has come to expect from her Managed Services provider is an open line of communication to share her needs and get back a timeline with commitments through timely and transparent communications. And, because they are genuinely a partner, they knew this request was coming and have worked behind the scenes to make sure Joan’s request would be delivered on-time with no hiccups.

In the background, Joan’s SaaS Provider is ensuring that the platform is running seamlessly. Their data recovery operation is replicating their data to multiple locations around the country, and their hundreds of cybersecurity staff are constantly monitoring and aggressively moving to make sure all that data is secure. No input from Joan or the utility is necessary, it’s just part of the service. What used to require interaction and planning, budgeting and procurement, HR and Hiring is now just done. A commodity.

Does this mean that Joan has solutioned herself and her team into joblessness? Hardly. Joan now has time to “look up”, as mentioned earlier, and put transformation plans in place to keep pace with the industry’s direction.

Get Ready; Get Set; The Art of the Possible is Around the Corner

When I hear people talking about the benefits of SaaS today, a lot of focus is placed on the opportunity to significantly reduce spend on core systems. While this is true, you’re cutting yourself short if that’s your only expectation.

Partnering with a SaaS CIS and/or MDM Provider along with a modern Managed Services Partner is a major business and IT department upgrade. In addition to freeing you up to focus on critical transformation projects, it can deliver the following benefits:

  • Manage budget by only paying SaaS provider for what you use and fixed prices for Managed Services
  • Establish SLAs and TMs
  • Further capitalize on your AMI investment
  • Take advantage of leading-edge technology to free up resources for new focus areas
  • Improve customer communications, and the overall customer experience

And this is only the beginning.

Reflecting back on The Jetson’s robot maid, Rosie, we’ve got something “similar” to her brain in the form of cloud-hosted systems like Amazon’s Alexa. Alexa sends your questions up to the Cloud, processes them and answers them via an artificial voice with real-time immediacy. But between the time that Rosie was conceptualized (in the early 60’s) and Alexa was introduced in 2014, “Rosie” has been upgraded in several ways including morphing from a clunky piece of metal to a small, sleek countertop device.

Ongoing technology advancements—what I’m calling the “art of the possible”—is what we see with all innovative technologies. Moving Systems of Record to a true SaaS environment, with a Managed Services provider leading utility industry-specific actions, will be no exception. To that point, there’s no reason we can’t start working towards generating a customer’s bill with the same ease as Alexa answers questions. “Alexa, please generate a bill for premise 2782738”.  “Here’s your bill for premise 2782738”. “Thanks, Alexa.”