National Grid was in the news[i] recently for saving an impressive £170 million off their 13/14 operational budget through ‘Operational Excellence’ initiatives. In a regulated market, Operational Excellence is a great way of keeping prices down for consumers whilst maximising returns for shareholders. And there is certainly lots of potential – Utilities businesses manage huge operational budgets and geographically distributed operations with large field forces.
Utilities are starting to appreciate the impact of Digital Transformation in this area. Over the next few years the development of the ‘industrial internet’ or ‘internet of things’, of which Smart Metering is a high-profile example, could provide real-time diagnostics of every critical asset in the network. Mobile platforms and GPS technology will create a truly digitally connected field force, and intelligent new systems will take all that data and turn it in to a revolution in analytics and insight that is just starting to be explored.
My personal interest is in the people aspects of Operational Excellence. Many Utilities are running ‘Lean’ or ‘Performance excellence’ programmes to engage and empower their workforces in continuous improvement and I believe that, rather than being less relevant, these methodologies will accelerate, and be accelerated by, digital transformation. I can see two key reasons for this.
Continuous Apps Improvement
Until recently, Information Technology has actually been a blocker to continuous improvement, with systems being expensive and difficult to change. This is no longer the case. We are now in a world where apps can be developed, launched and improved quickly and cheaply.
Furthermore, the workforce can now play an integral role in applications development. With the increasing adoption of ‘Agile’ techniques within software development, there is a new, close partnership between developers and users.
The main challenge now becomes how organisations should set up to capitalise on this. How do we prioritise improvement ideas and manage the process? How will the business and development teams work effectively together? The good news is that Lean and Agile methodologies have a lot of common principles and work very well together.
The second reason is that digital tools have the potential to transform how distributed teams collaborate. The latest mobile platforms and improved internet connectivity will create a truly connected workforce and user-friendly devices will make technology more accessible to a much higher proportion of the workforce than before.
Digital tools, such as Capgemini’s Virtual Visual Management, will allow distributed teams to effectively coordinate and manage their work flow on a daily basis and to initiate and manage improvement activities.
Digital tools will also link operational and support teams. For example, field operatives and office staff will be able to see the same data and information in real time and the increasing use of cameras will put those back at base in the reality of those in the field. And those agile development teams will now be able to engage directly and easily with their user group – a potential of thousands of users, generating ideas, testing apps and collecting feedback.
Conclusion: Digital Transformation will accelerate Continuous Improvement
In conclusion, the combination of established methodologies such as ‘Lean’ with the latest digital platforms tools and techniques has the potential to dramatically accelerate improvement efforts and can provide a real competitive advantage for Utilities companies in their pursuit of Operational Excellence – an opportunity, I believe, not to be missed.
Sponsor for this post is :
Paul Donnellan, VP CCUK. firstname.lastname@example.org
Paul is a Vice President in the Operating Model & Performance Improvement capability of Capgemini Consulting UK. He has 23 years of operational experience in industry and consulting where he has worked at the forefront of the operational excellence movement globally. He is an experienced Lean Master and Six Sigma Master Black Belt and when in industry led the design and implementation of major programmes for chemical multi-nationals. During his past 10 years in consultancy his programme design and delivery has delivered in both the private and public sectors. He is currently the Head of Operational Excellence for the UK.
Linkedin – http://uk.linkedin.com/pub/paul-donnellan/3/698/145