Navigating the complexity of Enterprise Asset Management (EAM) in the Energy and Utilities sector

In this post, we’ll explore several key areas of EAM in energy and utilities, including connection volume, IT/OT convergence, commissioning and decommissioning, and the circular economy, as well as security considerations.

The sustained increase in connections to the grid poses a significant challenge in keeping a grid operational and balanced. It also poses a challenge for those who are responsible for tracking and maintaining these assets. The more assets there are to manage, the more difficult it becomes to ensure that they are all tracked, monitored, and maintained effectively. This leads to increased costs, reduced efficiencies, and potential downtime for critical infrastructure assets.

To address this challenge, COOs and Operations Directors are turning to new technologies to collect real-time data about their infrastructure’s performance and health, which can then be analysed to identify potential issues before they become major problems. These digital technologies can help to provide operations managers with insights and actionable information that they can use to optimise asset management and operational processes. Used intelligently, these platforms can ‘predict’ failures and support interventions in the network that drive down cost while also reducing operational impacts (i.e., outages or leakage)

By leveraging these digital technologies and exploiting an improved operational awareness of the network, asset and operations managers can improve efficiencies, reduce costs, and ensure that all assets are tracked and managed effectively. The convergence of IT and OT in asset management refers to the integration of two distinct areas of technology Information Technology (IT) and Operational Technology (OT) to create a consistent digital ecosystem that enables organisations to manage their infrastructure efficiently. IT and OT have traditionally been separate areas of technology (and under separate ‘management’ through CIO’s and Engineering Directors respectively), with IT focused on managing data and information systems whilst OT focused on managing physical assets, infrastructure and processes. As digital transformation has accelerated, there has been a growing recognition of the need to integrate and combine these two areas to create a more holistic view of assets and infrastructure across the organisation and so drive organisational structures, governance, and processes to change.

By integrating IT and OT systems, organisations gain a more complete picture of their capital and IT assets in context to the operational needs of the business, including data on performance, maintenance, and utilisation. This enables organisations to identify areas for improvement, optimise asset utilisation, and reduce downtime and maintenance costs.

Furthermore, IT/OT convergence also enables organisations to align their asset management goals with their overall business objectives. By connecting asset management to business objectives, organisations can ensure that assets are managed in a way that supports their strategy and objectives.

Commissioning and decommissioning are critical processes within infrastructure operations management that can have a disproportional impact on a company’s strategy, objectives and, ultimately, their business results. Bringing new assets online, ensuring they are functioning correctly, and retiring assets at the end of their useful life is a demanding and involved operational procedure. These processes require careful planning and management to ensure that assets are correctly brought into operations and removed from operations effectively and efficiently without disrupting the rest of the network and are key considerations to ensure efficient operation of any grid infrastructure.

Commissioning involves a series of tests and checks to ensure that new assets are functioning correctly and safely. This process can involve everything from checking electrical and mechanical systems, to verifying that the asset meets regulatory and safety standards. The commissioning process is critical to ensure that assets are safe to operate and will perform as expected in the operational environment it is intended to be used in. Digital system integration is a core enabler to the smooth running of an effective commissioning process.

Decommissioning, on the other hand, involves retiring assets that are no longer needed or have reached the end of their useful life. This process can involve everything from removing equipment and disposing of hazardous materials to shutting down systems and securing the site. Proper decommissioning is critical because it ensures that assets are retired safely and efficiently, reducing the risk of accidents, and reducing the impact on the environment, and in a digitally enabled environment reduces the impact on other operational assets as dependencies are easier to identify and manage accordingly.

Operations managers leverage data and analytics to gain insights into their infrastructure assets’ performance and make informed decisions about the risks associated in commissioning and decommissioning. By tracking performance metrics and analysing data on asset utilisation, maintenance costs, and downtime, operational managers can identify opportunities to optimise when an asset should be decommissioned from operation. To optimise this, operational managers must balance the risk of keeping an asset operational against the cost of decommissioning the asset with newer, more efficient equipment, minimising impacts on customers and business operations alike.

Whilst talking about the decommissioning process, the circular economy is an emerging trend in EAM that involves designing products, solutions and systems with a focus on sustainability and circularity. The idea is that operational assets can be retired to secondary or tertiary operational roles or returned to manufacturer for reconditioning or material reuse. It aims to minimise waste and the consumption of natural resources by keeping materials in use for as long as possible, through reusing, repairing, refurbishing, and recycling.

In a circular economy, assets are designed and managed to ensure their long-term value, with a focus on minimising waste and reducing environmental impact. Asset managers play a key role in promoting the circular economy by commissioning assets that are designed for maintenance and that support circularity and by implementing effective recycling and repurposing programs. If these requirements are not specified and driven hard through design and implementation, then the assets delivered and deployed are destined for landfill.

Furthermore, asset managers can implement effective recycling and repurposing programs to ensure that materials are reused and recycled at the end of the asset’s lifecycle. This can involve everything from implementing a recycling programme for electronic waste to repurposing old equipment for use in other applications.

Lastly, the most overlooked element in most operational environments is security. We have found it to be a critical consideration in EAM, particularly as assets become more connected and digitally enabled. COOs and Operations Directors need to ensure that all assets are protected from cyber threats and other security risks that cause financial, reputational, and operational damage to their business.

To ensure that assets are protected from security threats, operations managers should implement security protocols such as zero-trust security methodologies, which assume that all devices are potentially compromised and implement measures to verify the identity of users and devices before granting access to the wider infrastructure. Other security measures can, and should, include network segmentation, access control, data encryption, and intrusion detection and prevention systems.

Operations managers can also incorporate regular security patching and maintenance procedures into asset management processes to ensure that vulnerabilities are addressed promptly. This can involve everything from updating firmware and software to conducting regular vulnerability assessments and penetration testing. They should also prioritise security by incorporating security considerations into asset design and asset selection processes.

In conclusion, EAM is an increasingly complex and evolving field that requires careful planning and management to ensure that assets are used effectively, safely, and efficiently throughout their lifecycle. By leveraging technologies such as IoT sensors and advanced analytical tools, embracing IT/OT convergence, prioritising security, and promoting supply chain circularity, COOs and Operations Directors can optimise asset management processes and achieve greater success in the digital age. If one or more of the topics we touched on in this blog are of interest to you or you are curious to know more, please watch the videos where our SMEs Sven Strassburg (IBM) and Mark Hewett (Capgemini) discuss these very topics focused on the energy and utilities sector.