Guidehouse Partners with Leading Utility Company to Modernize and Transform

A leading US electrical power utility company, serving more than 600,000 customers. The company was reassessing the suitability of its information technology (IT) and operational technology (OT) environments to support its long-term business strategy. Its technology infrastructure was built on legacy technology and was no longer able to support the internal business or external customer needs. 

Challenge

Legacy Systems Created Technology Risk and Inhibited Innovation 

The organization’s large-scale enterprise IT solutions had been in place for more than a decade, with some components up to 30 years old.  In addition, the legacy infrastructure had become a barrier to developing and delivering new IT and OT applications required to keep pace with industry innovation, support strategic priorities, or enable digital customer services. Utility leadership recognized the need to modernize critical systems and integrate advanced technologies, such as automation, AI, Internet of Things (IoT), and 5G connectivity.

Inability to Integrate IT and OT Systems and Data

The organization’s large-scale network of IT and OT systems was intrinsically linked, with vast connections and interactions across its energy distribution network, however there were key technology components that would need to be integrated during modernization. While legacy systems would need to be replaced with digital solutions, retaining uninterrupted communication between IT and OT across the network was crucial. The risk of losing business continuity or service to customers would need to be carefully managed and mitigated. 

Transition to More Sustainable Energy 

The organization had set a goal of providing 100% clean energy by 2045, while pledging to keep its prices low and remain reliable for its customers. This alone would be an extremely difficult undertaking from a technology perspective, as changes in energy sources would change how IT and OT supported the distribution grid. Achieving its sustainability objectives would not be possible without an overhaul of the technology infrastructure that supported the business operating model.

Increasing Network Reliability and Resilience 

As an energy provider, outages, and loss of service for customers are not an option. However, as its IT and OT environments continued to age, this was becoming a more likely risk.  In addition, reliable technology was critical for enabling the field workforce to continue to do their jobs effectively. These and other issues underscored the need to implement a more resilient and agile technology infrastructure.

Growing Pressure to Manage Cost Pressures 

As competition in the energy market increased price transparency, the organization’s leadership was facing financial pressures amid rising operational costs. They needed an IT modernization strategy that would provide tangible, near-term improvements and generate a strong, long-term return on investment, while also ensuring competitive prices for customers.

Solution 

To address these challenges, the senior leadership team recognized the need for a significant investment in technology modernization was required and that they needed the support of an experienced, trusted advisor to ensure successful achievement of their strategic and operational goals. They chose Guidehouse as a partner to develop long-term strategy to modernize the organization’s technology infrastructure.  With a large-scale energy distribution network, they were seeking solutions that would increase security and overall IT resilience over 5-, 10-, and 15-year timeframes. 

Guidehouse developed an IT Modernization Strategic Roadmap and tactical implementation plan that incorporated all critical projects and considered key variables and dependencies that could impact cost, timeline, quality, and risk. The roadmap ensured that helped maintain interconnectivity and dependability would be maintained across the network and support sustainability objectives. 

Evaluating the Current State 

Guidehouse began by working closely with the client project team to evaluate the current state of the technology infrastructure.  The team assessed the entire infrastructure environment, evaluated the technological maturity of processes and tools, reviewed the assets and resources, and conducted risk analysis. The rigorous assessment served as the foundation to create a common understanding of  the client’s IT environment, which would inform decisions moving forward.  

Defining the Future Needs and the Gap

Next, the combined team developed a target state infrastructure that would increase IT resilience and provide the long-term stability required by the organization. The team leveraged Guidehouse’s utility-of-the- future research, deep understanding of utility IT/OT, and an internal assessment of the business, operational, and customer needs. Once the future requirements and environment were as defined, a detailed review was conducted to understand the gaps between the current state and the leading technology solutions available within and outside the industry. In addition, the team identified unique needs, along with overall distribution network requirements, for this utility, customer base, and energy infrastructure to refine the target state environment and set achievable goals. 

Prioritizing Strategic Options 

Guidehouse worked closely with senior executives to align the tactical options with strategic needs of the business, conduct dynamic scenario analysis and facilitate decisions about where to invest and in what priority. The overall strategy involved many individual projects and initiatives, which meant success would depend on prioritizing correctly for both the short and long term. 

Delivering the Technology Roadmap 

Guidehouse developed a detailed strategy and implementation roadmap across six areas: network monitoring, control and optimization, self-healing electrical grid, communications infrastructure, IT/OT integration, and customer solutions. The strategy and roadmap identified technology solutions, key vendor categories, modernization sequencing for each infrastructure component, and timeline.  In addition, the strategy addressed resource, organizational- structure, training, and change- management requirements for modernization to ensure internal and external users would be able to seamlessly adopt and adapt to the new technologies.

Future-Proofing the Strategy 

With such a large-scale, complex modernization that would be implemented over multiple years, Guidehouse determined that the roadmap could not succeed as a one-time exercise. So, the team created trigger points that would signal points where the strategy and roadmap may need to be reviewed and refined to account for business, operations, and technology changes throughout the implementation timeframe. 

The team worked with senior leadership to emphasize the importance of periodically updating and optimizing the roadmap to ensure they’re consistently taking the best path forward on the overall program and key initiatives, and adapting to external market factors and technology shifts.  In addition, the team highlighted opportunities to accelerate adoption of advanced technology solutions in three years rather than five years, based on successful implementation of foundational components.

Impact 

Guidehouse’s team worked closely with the senior leadership team to align the tactical and strategic needs of the business, providing stakeholders with industry and technology perspectives and providing the foundation to enable investment decisions. Guidehouse’s proven track record of advising clients on large-scale IT modernization projects and deep utility experience gave leadership confidence in its transformation strategy. Guidehouse continues to serve as a trusted advisor and support the infrastructure modernization implementation.