Challenge for utilities to get smarter: research

Peter Dinham
Thursday, 15 October 2009 13:28

IT Industry - Market

The move towards smart metering, new government legislation and environmental policies are forcing Australia’s utility companies to assess internal systems and adopt new technologies, according to a survey of the industry, which also found that poor internal systems, lack of integration between them and spiralling costs pose the greatest challenges for utilities.

According to global enterprise applications company, Industrial and Financial Systems (IFS), which commissioned the research of some of Australia’s largest utility companies, “achieving the balance between responding to government legislation, meeting customer demand and keeping shareholders happy, is proving difficult for many utility companies.”

IFS says the findings of the survey showed that, whilst 81 per cent of utility companies said the biggest challenge to their business was reducing business costs, 57 per cent are “trying to get their customers to reduce consumption of their product or service to conserve resources, become more ‘green’ and comply with government legislation, all during a time when profit expectations have increased.”

IFS’ managing director for Australia and New Zealand, Rob Stummer, said that “today’s energy and utility industry is facing unprecedented changes as they move towards a smart metering platform. The research highlights environmental and legislative pressure, whilst needing to reduce costs, to keep prices down and shareholders happy.

“A new level of enterprise integration is required to support these utility companies through the transition to smart metering so that they can interpret and respond to the new data quickly, offering a more efficient service to customers.”
 
IFS maintains that the implementation of smart meters in Australia will enable customers to monitor their own energy use and allow utility companies to read, connect or disconnect meters remotely and respond faster to power outages.
 
Fifty per cent of respondents surveyed had already adopted smart metering, according to IFS, with a further 11 per cent considering it in the near future. “However, the associated costs of implementing new smart metering technologies and the volume of information generated puts additional pressure on utility companies to increase their efficiency and achieve a return on investment,” Stummer said.

As part of the research , the utility companies were asked to rate their internal systems, including ERP, Asset Management, billing and HR/payroll, and IFS says that only 14 per cent rated their ERP systems as good and 47 per cent rated their HR/payroll systems as average or poor.

The research also found that, when asked if the systems were integrated to provide one view of the organisation, 52 per cent said systems lacked integration and couldn’t provide real time data. However, over half of the respondents said they acknowledged that adopting new technologies was important (53 per cent).

Stummer says that, whilst some progress has been made in reducing environmental impact, 100 per cent of the companies said they had adopted green initiatives and 95 per cent employed an environmental officer, with only 14 per cent of respondents saying that reducing carbon emissions was important to their business.