Unlocking the Value of Analytics

Accenture’s Digitally Enabled Grid program

Contents

Introduction 3

Opportunities for utilities to improve performance 4

Lessons learned from other industries 5

Analytics adoption to date 6

Analytics opportunities for high performance 6

Becoming an information-driven organization 9

How analytics drive real value 10
1. Analytics can radically improve decision making at every level. 12
2. Real insight comes from business intelligence and analytics that correlate data 13
across the enterprise and externally.
3. New insights are possible by moving from business intelligence to comprehensive 13
analytics to fundamentally manage business differently.
4. Achieving sustainable value from analytics requires new approaches to 14
information management.
5. Changes to the operating model are required to enable benefit realization 16
from new insights.
6. Rapid learning improves models and increases value from insights. 17

Conclusion 18

2
Introduction

Utilities face significant challenges to meet their commitments to

shareholders and regulators, while safely managing the health and
reliability of the network. Utility executives continue to make important
promises to shareholders to deliver earnings growth. In most regions,
according to Accenture estimates, 30 to 40 percent of the share price
of top-performing utilities is based on expectations for future earnings
growth. Yet these growth goals have become significantly more difficult
to achieve due to lack of load growth, rising operating costs and the
volatility of energy supply markets. Over the next five years, disruptive
changes are expected to put additional pressure on utilities’ economic
models, including increasing focus on energy efficiency, the growth of
demand-response programs and the impacts from increasing adoption of
distributed generation.
In response, many utilities are deploying smart technologies to enable
new capabilities and extract greater value from their assets. Utilities
have learned from their own experience and lessons from other industries
that delivering value from these new capabilities requires fundamental
changes to the business and operating practices. Many of these changes
can only be achieved by deriving critical insights from the voluminous
data captured by smart devices and correlating with data in current
operational systems and with external sources. Considering the potential
value of this data, using advanced analytics to help drive these operational
changes has become a critical imperative for most utility executives.

This paper provides insights and examples of how utilities can use advanced
analytics to transform operating practices to achieve better operating results.
It considers areas where utilities can focus their efforts on ways they can
become more effective, information-driven organizations. It also offers a view
into industries that have experienced, survived and thrived in times of
disruptive change.

Accenture’s analysis suggests the potential value of using smart grid analytics
to transform operating results, at a conservative estimate, could approach $40
to $70 per electric meter per year. While value estimates vary geographically,
Accenture believes that the potential for value is compelling leaders in all
markets to take steps to industrialize the discipline of driving operating change
through analytics to an organization-wide scale, including integrating enterprise
analytics with operational analytics. Successful companies will achieve a cultural
shift to foster an information-driven organization that uses data-driven decision
making to achieve high performance.

3
Opportunities for utilities to
improve performance

4
Lessons learned from
other industries
Transmission and distribution utilities
continue to deploy advanced technologies
into their networks—a fact that has been
true for decades. However, the wave of
technology changes affecting utilities—not
just advanced meter systems, but also
intelligent devices, advanced mobility,
smart consumer devices and social
media—is driving much greater impacts.
More than just providing opportunities
to improve existing processes, these
technology changes are providing new
capabilities that will change how processes
are executed. One example is the detection
of and response to outages, which can be
transformed when network diagnosis and
response activities can be more closely tied
through interactions with consumers via
customer technologies.
Other industries such as telecommunications,
retail and banking have experienced
similar disruption, and the companies that
thrived invariably embedded analytics into
business processes in a robust, industrialized
way. For example, traditional wireline
telecommunication companies (telecoms)
were blindsided by the rapid emergence
of competitors using Internet protocol (IP)
telephony, while at the same time, wireless
was displacing the use of local lines.
Successful companies used analytic models
to examine and change almost everything
from where to invest in packet-switched
technology based on call routing to what
to charge consumers for new product
bundles that emerged. Had these landline
companies not made these changes, their
survival would have been in jeopardy.
In the area of fraud detection, banks
have developed some of the most robust
algorithms and processes to identify
and prevent credit card fraud. Today, an
ordinary practice involves identifying
suspicious activity in real time and
sending a text message to the consumer
notifying them of the charge before it
is approved. Revenue departments at
numerous government revenue agencies
have employed data-driven insights to
increase identification of noncompliance
and increase collections.
The Moneyball analogy (see sidebar below)
is relevant to illustrate the opportunity
utilities have in facing their economic
challenges. If “salary” is replaced with
capital and “wins” replaced with system
reliability, then it replicates one of the big
challenges facing utility executives: how to
achieve greater system reliability and asset
health using less capital. This trade-off is
generally defined by the “efficient frontier,”
which is that most efficient combination
of the amount of money spent and how
much reliability can be achieved. Like Billy
Beane, Accenture believes that utilities
can move to a new frontier and achieve
the same or greater reliability using less
capital by changing the way they allocate
capital using more granular data and
insights about the network and statistical
models that assess asset outcomes.

Analytics and the Moneyball example
One ideal illustration of the
transformational potential of analytics
actually comes from the world of sports,
more specifically, US Major League
Baseball. In his book, Moneyball, Michael
Lewis describes the unorthodox methods
employed by Billy Beane, general manager
of the Oakland Athletics. Beane had the
daunting task of determining how to beat
other baseball teams that were spending
more than three times what his team was
able to afford in salaries. Using analytics,
the results he achieved were stunning and
fundamentally changed how baseball teams
are managed.
1
Traditionally, baseball team management 4.4 times less per game won, and they won
and scouts relied on their extensive more games. Two years later, the Boston
experience to evaluate players. They Red Sox adopted Beane’s methods and won
loaded their rosters with expensive players the World Series championship for the first
who looked good on paper (hits, batting time in 87 years.
average), but whose performance showed
little correlation with actual results, in
this case, wins. Beane used analytics to
turn this thinking on its head, by tying
every decision about players and playing to
statistical models. In 2002, the New York
Yankees paid $1.2 million for each game
they won (dividing total games won by
total salary). That same year, Beane and the
Oakland Athletics paid just $273,000, or

5
Analytics adoption to date
Utilities currently make decisions based
on extensive experience and information
that lives in “silos” in different parts of
the organization. Much of that data is of
questionable quality and requires a high
degree of manual manipulation, often leading
to debate among leaders about the relevancy
of data, rather than the actual significant
decisions. Siloed data leads to difficulty
in understanding cross-organizational
impact. Decisions made using operational
data can have unexpected consequences
if there is little correlation between these
separate types of data—consequences that
are sometimes only realized after decisions
are made and implemented. For example:
a decision to defer replacement of an
asset could result in increased costs as a
result of increased failure rates. Another
example: decisions to defer operations
and maintenance (O&M) spend to adjust
placement of capacitor banks, which could
defer potential benefits in terms of voltage
optimization. In many cases, extensive time
is required to perform cross-organizational
analysis, limiting these exercises to once or
maybe twice a year, which inherently limits
their value.
Conversely, an information-driven utility,
one that can aggregate and correlate
information across these data silos,
would be able to derive information-
driven insights that could potentially
fundamentally change decision models,
performance insights and process changes.
Accenture defines an information-driven
utility as having the following characteristics:
• Systematically harvests the flow of
information and knowledge, and provides
it to the appropriate people at the
appropriate time to help make optimal
decisions to drive value
Table 1. Estimated current use of analytics by operational areas.
Type of Utility
Electricity
Gas
Water
6
• Institutionalizes and industrializes
collective knowledge of the enterprise
• Architects data models to leverage all
available data (internal and external)
• Organizes and empowers people to make
decisions based on the use of information
models
These characteristics can help utilities
achieve sustainable improvements to their
business results, including:
• Enhancing return to shareholders by more
effectively modeling capital and operating
spend within a rate case period.
• Providing better return on invested
capital from better allocation of capital to
projects.
• Increasing contribution margin on power
delivered by better optimizing the grid
operations.
• Improving revenue on power delivered by
reducing “leakage” from theft and errors.
The adoption of analytics in the utilities
industry has not been widespread compared
to other industries. To date, most of the
focus has been in the customer/retail areas,
which has primarily been driven through
competition. According to recent research on
the utilities analytics landscape, conducted
for Accenture by 10EQS, one former CEO of
an integrated electricity company summed
up the situation for many utilities this way:
“From a retail perspective, we’re realizing
less than 10 percent of the potential of
[advanced] analytics, however, we’re around
40 percent of the way to understand what
we need to do to get there. In supply and
transmission [i.e., networks] we’re realizing
less than 5 percent of the potential, but we
don’t really know how to get to the
next level.”
Utility Operations Areas Use of Analytics
Supply 5% Networks 5%
Supply 5% Networks 5%
Supply 5% Networks 5%
Accenture estimates the current use of
analytics across the various operational areas
within a utility as shown in Table 1.
Gas utilities need to overcome critical
infrastructure integrity issues and satisfy
the need to engage with consumers in a
more meaningful way in what is, for some,
an increasingly competitive retail market
through the continued adoption of advanced
analytics. In water utilities, analytics
adoption is driven by a need to improve asset
management and address nonrevenue water
challenges where there is heightened focus
on resource management. Based on internal
and external research, most gas and water
utilities (with a few notable exceptions) are
still far from using analytics extensively, even
though doing so could help address a number
of critical priorities.
Analytics opportunities for
high performance
With the widespread adoption of advanced
metering infrastructure (AMI) and other
sensors, electric utilities have begun to
produce big data, or data at the scale
necessary to leverage analytics. This
production of big data is mostly applicable
for distribution (networks) and retail and, to
a lesser extent, for power generation.
While the application of analytics is not
yet mainstream, estimates of planned
investments show that utilities are clearly
recognizing the potential of analytics. Pike
Research estimates the compound annual
growth in spending on analytics at 24.5
percent for the years 2012 to 2020, with
a steady-state growth and total spending
of more than $34 billion during this time
period.2 GTM Research expects aggregate
expenditure on automated metering
analytics to reach an annual spend of $9.7
billion by 2020.3
Retail 20%
Retail 10%
Retail 5%
Insights from Accenture’s Digitally Enabled Grid
program: 2013 executive survey
When asked where they see analytics In addition, results from Accenture’s Accenture’s Digitally Enabled
as having the greatest impact for smart survey find that utilities clearly assess
solutions deployment, respondents to their current level of maturity on analytics
Grid program: 2013 executive
Accenture’s recent executive survey note capabilities in need of improvement. This survey methodology
that there is broad support for analytics characterization is true for all the facets of
across all areas. Of note, however, is the capability, including data quality, tools
Accenture conducted an
that the majority of executives point to and skills (see Figure 2). executive survey among utilities
analytics related to better management of executives worldwide involved
the network itself. Perhaps not surprisingly,
in the decision-making process
North American respondents tend to
favor outage management and AMI for smart grid-related matters in
operations analytics compared to European their company. The survey results
respondents (see Figure 1). are based on questionnaire-
led interviews with 54 utilities
executives in 13 countries,
conducted via telephone in 2013
for Accenture by Kadence.*

Figure 1. Analytic areas of greatest value to smart solutions deployment.

Which analytical areas would represent the greatest value to smart solutions deployment for your network?
Select all that apply

Grid operations analytics 96%

Asset management analytics 92% North
America Europe

Outage management analytics 85 %

93 % 69%
Volt/VAR analytics 81% North
America Europe
Communications network
operations analytics 77% 83% 56%
System planning analytics 77% North
America Europe

AMI operations analytics 77% 87 % 56%

Demand-response analytics 73%
Customer operations analytics 73%
Customer segmentation and
behavioral analytics 58%
Revenue protection/theft reduction 52%
AMI deployment analytics 50%
Distributed generation analytics 48%

Base: All respondents, analytics section.

Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.

7
Figure 2. Maturity assessment of current analytics capabilities.

How would you assess the maturity of your current analytic capabilities in each of the following areas?

23% 15%
35% 33% 33% 31% 27%
42%
53% 46%

64% 77%
55% 63% 65%
48% 63%
35% 46% 65%

12% 8% 10% 4% 12% 6% 8% 13% 8%

Data integration Statistical Data availability Analysis toolsets Data Data IT/OT integration Data quality Access to Data latency
across sources analysis/data (detail, gaps, (coverage/ visualization governance (i.e., integration (accuracy and real-time data (time delay of
(integrate data scientist skills timeliness/ completeness) between real- precision) systems)
from consumer, currency) time systems in the
weather, etc.) field and enterprise
IT systems)

No need for improvement Some need for improvement Significant need for improvement

Base: All respondents, analytics section.

Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.

8
Becoming an information-driven
organization

Successful use of analytics requires great
focus, having a clear view of what business
activity or business processes they impact
and what particular business outcomes they
might improve. This focus helps identify
and prioritize the analytics most relevant to
a utility’s business goals. Figure 3 depicts
some operational areas of analytics and
the operating areas they affect. Other
analytic models not included in the figure
include corporate services (finance,
supply chain, human resources), advanced
asset maintenance and capital planning
management, and work and field force.
We see this focus reflected in examples
from around the world: one large
Midwestern US utility is pursuing analytics
initiatives to support load planning
and forecasting; in the Netherlands,
another utility is testing how the use
of granular usage data could change
the capital required for distribution. In
Canada, a large utility has focused on
developing asset management regimes
that incorporate sophisticated asset risk
heuristics and visualizations (as are utilities
in China, Singapore and Australia).
Revenue protection and consumer
programs are also high on utilities’ priority
lists, with consumer programs having a
wide range of objectives. Additionally,
we also see increasing demand for
analytics supporting network operations,
specifically for the AMI network
(examples include a large Northeastern
US utility and a large Canadian utility).

Figure 3. Key operational analytical areas and affected operating areas.

AMI Deployment NOC/SOC

Meter Deployment Meter Common Installer Deployment Comms. status Event Grid topology Security
deployment exceptions discovery and deployment performance optimization management (as operated) incidents
metrics certification performance

AMI Operations Outage/Fault Intelligence

Meter read Remote meter Meter Meter quality Meter data Meter comms. Outage FLISR Outage KPI
performance operations data load consistency identification, comms. reporting and
performance resolution and optimization
optimization

Revenue Protection and Billing Distributed Gen. Power Quality

Exception Billing data Revenue Billing Meter data Unaccounted Availability Capacity Voltage sag Power factors
handling availability protection performance accuracy losses and swell
performance (including
theft)

Customer External Customer Internal Asset Management Demand Response

Usage and Supplier and Energy Customer Targeted Social media Usage Transformer Demand- Demand-
consumption third-party efficiency segmentation marketing aggregation load analysis response response
transactions (transformer, effectiveness planning
feeder, etc.)

Note: NOC: network operations center, SOC: smart operations center.

Source: Accenture.

9
These examples are just some of the ways
we see analytics transforming how the
business operates. As illustrated by the
Moneyball example, there are numerous
areas where analytics can provide a
transformative impact for decision making
within utilities. Table 2 provides a list of
10 opportunity areas that we see driving
significant value and are priority focus
areas for utilities.
Accenture research and experience in
multiple industries confirms that insights
alone will not make any difference to
operating results. Analytics create no
inherent value if they are simply focused on
reporting or involve putting large quantities
of data into sophisticated repositories.
Insights from analytics must be used as
a way to fundamentally change decisions
that impact utilities’ operating practices.
This is a lesson derived from years of
investments in industries that were early
movers in analytic capabilities, but often
struggled in early stages to realize results
from their investments.
In Accenture’s view, there are six insights
that demonstrate how analytics can be
used to transform operating practices
and help achieve more fundamental
improvements in results.
How analytics drive
real value
1. Analytics can radically improve decision
making at every level.
2. Real insight comes from business
intelligence and analytics that correlate
data across the enterprise and externally.
3. New insights are possible by moving
from business intelligence to
comprehensive analytics to fundamentally
manage business differently.
4. Achieving sustainable value from
analytics requires new approaches to
information management.
5. Changes to the operating model are
required to enable benefit realization
from new insights.

6. Rapid learning improves models and

increases value from insights.

Table 2. 10 priority use cases that can drive significant value for utilities.

Opportunity Areas Drivers

Revenue protection Detecting unauthorized use and configuration errors and recovering lost revenue

Voltage optimization Using asset-condition models to refine operational settings of assets to save on power costs

Demand-response effectiveness Increasing participation in demand-response programs and improving savings achieved from load
control

Load forecasting and planning Improving long-term investment planning based on bottom-up demand and asset load and
condition indexes

Outage detection and response Reducing outage costs from enhanced response to outages (detection, isolation and restoration)

Outage prevention Reducing equipment outages by focusing on assets with highest risk of failure

Investment planning Revising priorities of asset investments based on analysis of asset risk and consumer impact

Maintenance strategies Revising maintenance strategies, policies and programs based on condition and risk analytics

Energy efficiency Identifying and helping consumers improve value from energy and energy efficiency

Energy services Targeting consumers for services and pricing to help improve value from energy and with
adoption of new uses (e.g., use of distributed generation, photovoltaics)

10
Case in point: The US estimated potential value of
smart grid analytics
As previously stated, Accenture’s analysis
suggests that the potential value of smart
grid analytics, at a conservative estimate,
could approach $40 to $70 per electric
meter per year, with estimated benefits
generally split with 60 percent benefit to
the consumer and 40 percent to the utility.
Figure 4 illustrates potential annual savings
from AMI analytics in various business • Revenue protection and billing
areas, created for a representative US utility.
• Outage and fault intelligence
The bulk of the benefits to utilities, up to
Using data from Figure 4, the estimated
85 percent, are derived from four main
share of annual savings per meter from
categories:
AMI analytics, by business area, is shown as
• Asset management percentages in Figure 5.
• Power quality

Figure 4. Estimated average annual savings from AMI analytics, by business area, on a US dollar-per-meter basis (representative
US utility).

32.4
26.6

9.9 10.2
7.8 7.2 6.2
4.5 4.5 4.1 2.5 4.3
1.11
2.5 0.2 1.5 0.1 1.3 0.1 1.1

Asset Power Revenue Outage Customer Demand NOC and SOC Customer AMI AMI
management quality protection and and fault external response internal operations deployment
billing intelligence
Minimum benefit Maximum benefit
Note: NOC: network operations center; SOC: smart operations center.
Source: Accenture analysis, 2013.

Figure 5. Estimated share of annual savings per meter from AMI analytics, by business area, as a percentage (representative US utility).

1.2% Customer internal

NOC and SOC 2.7%
0.9%
Demand response 5.2% AMI operations

Customer external
0.8% AMI deployment
8 %

Outage and fault

intelligence 9.1% 47% Asset management

Revenue protection
11%
and billing
14%
Power quality

Note: Total net benefit 100% = $64.1 per meter.

Source: Accenture analysis, 2013.
11
1. Analytics can radically
improve decision making
at every level
The widespread adoption of AMI and other
sensors in electric utilities is providing
massive amounts of real-time data, which
can help utilities make better-informed
decisions. This data can be used to provide
“bottom-up” insights that are more
frequent, more granular and more accurate
than the information they are currently
using. For example, at one electric utility,
distribution planners use a single snapshot
of peak system load taken twice a year to
base all decisions about the planning of
assets, and plans for each area are reviewed
in multiyear cycles. By using meter-interval
data combined with asset information, the
utility would be able to use daily and hourly
information about the actual load on
specific assets. In an early prototype, the
utility discovered that many transformers
were substantially underutilized.
For these types of changes to be possible,
new models need to be adopted for
reviewing system performance, evaluating
investments and measuring outcomes. In
the planning example, reversing the flow
of insight creates a dramatic change in
the quality and timeliness of the decisions
possible (from top-down based on
experience or guidelines to bottom-up).
Figure 6 illustrates how the joining
of bottom-up insights and top-down
objectives can transform the
management model and impact all levels
of decision making.
It is the availability of bottom-up
information, when tied to top-down
objectives and goals that can dramatically
improve decisions and performance. In
utilities, bottom-up data can impact how
decisions are made in multiple areas—
assets, workforce and field operations, grid
operations, and customer. In the late 1990s,
the struggling US retailer Sears Roebuck
& Co. developed a sophisticated statistical
model that correlated bottom-up store
performance data with store profitability.4
Using the model to manage everything
from staffing to merchandise mix, Sears
began a half-decade of resurgent growth
and profitability. The sponsor of the model,
Alan Lacy, was later named CEO.
In the same way, the existence of detailed
big data information can transform how
utilities manage the business. Three
specific capabilities arise from big data
that can lead to the adoption of new
management models:
• Predictive models: Big data analytics
provide the basis for probabilistic models
and scenario-based planning approaches
that can fundamentally change the
nature of planning. For example, in asset
investment planning, by integrating data
sources automatically and embedding
institutional knowledge into analytic
models, overloaded and underutilized
assets are more easily identifiable. This
insight provides a more detailed basis
for ranking investment projects and also
makes planning easier by automating
asset planning analysis.

Figure 6. Illustrative view of potential analytics areas impact in the decision-making process.

From grid to C-suite

Executive • One vision of entire system

intelligence • P&L management
• Capital management
• Portfolio risk management

Business application • Prioritization of asset management

and decision support • Proactive asset intervention
• Workforce optimization
Analytics • Enabling faster decisions
and business
intelligence
drive Real-time • System health and status availability
decision operations monitoring • Real-time decisions
and actions and analytics
• Predictable restoration times

Data and complex • Automate complex activities

event management • Recording of events
• Integration and visualization of data

Intelligent sensor and • Monitor and record asset performance

device data generation • Monitor customer demand
and delivered quality

Source: Accenture.

12
• Real-time optimization: The availability
of real-time data at the asset level
provides a basis for day-to-day decisions
that can significantly improve the
optimization of the network and energy
use (example: Volt/VAR control and
voltage optimization). With greater
adoption of distributed generation and
storage, having real-time data about
the grid greatly increases the operator’s
ability to manage the grid effectively
within acceptable parameters and for the
best economic outcome. This is the same
capability that helped telecoms manage
network investments as their Class 5
telephony systems became the obsolete
(to data and packet-switched systems).
• Performance reporting: Big data
provides far more granular insight about
performance against specific objectives.
With the availability of more frequent
and granular performance data, it
becomes possible to correlate objectives
with specific performance metrics,
making it easier to make changes that
help meet performance goals.
With big data, operators and managers are
able to make more informed decisions and,
more importantly, understand and validate
the effect of their actions on overall
objectives in reasonably short time frames.
Analytic models make it possible to carry
out detailed scenario analysis to explore
different options, providing leadership
with greater information and situational
awareness than they had before.
2. Real insight comes from
business intelligence and
analytics that correlate data
across the enterprise and
externally
Today, most operational systems are
managed within organizational silos, with
data owned and managed by different parts
of the organization and toward different
objectives. Overcoming these barriers can
reveal statistical relationships that lead to
real insights on how to optimize processes.
As an example, combining meter-interval
data with data from the distribution
management system (DMS) and SCADA
control systems enables algorithms that
could allow a utility to discover where
opportunities for voltage optimization
exist. Another example is prioritization of
capital investments. Combining interval
data and data from asset information and
work management allows for the creation
of asset health metrics based on asset
utilization and load. The same approach
could help optimize crew location and
assignments based on information about
consumers reconnected after an outage.
Numerous other examples illustrate the
value of bringing data from disparate
systems together.
Canada-based Hydro One recognized the
criticality of data quality and of bringing
multiple sources of data together to
improve how the utility plans investments
in its transmission and distribution assets.
The utility has deployed an asset analytics
solution to access and integrate historical
asset data and information from multiple
databases and business applications that
were either inaccessible or not integrated
into the utility’s information technology
and operational technology networks. With
the implementation of this solution, the
utility’s asset management, engineering and
planning workforces now have information
on the performance of transmission and
distribution assets that is time-based and
locational. Hydro One’s managers are able
to access integrated asset information to
help them further identify and plan for
short- and long-term investment scenarios
and deliver performance outcomes that
mitigate power system and ongoing
investment risk. By pulling together the
data and information, Hydro One expects to
have improved data quality and advanced
predictive analysis capabilities to define
the requirements and forecast expenditures
needed to maintain the electrical grid at an
optimal level.
Correlating internal data with external
data sources provides additional insights.
Consumer usage profiles based on hourly
or 15-minute interval data can become far
more useful when combined with external
weather data or with real estate data that
could provide insight on the square footage
of a house, which could help benchmark the
home in terms of energy efficiency.
3. New insights are possible
by moving from business
intelligence to comprehensive
analytics to fundamentally
manage business differently
Many utilities have made significant
investments in traditional forms of business
intelligence (BI), including reporting
systems, data warehouses and data marts of
historical data. Trends in analytics highlight
some key differences between traditional
BI and more comprehensive analytics.
Data that drives comprehensive analytics is
distinguished from traditional BI approaches
in at least two ways:
• Time: Comprehensive analytics will
incorporate very low latency data
(seconds, minutes, hours) as well as high
latency (days, weeks, months) analytics
more common in BI.
• Data organization types: Advanced
analytics will consider many unstructured
sources (social media, e-mails, websites,
customer comments) as well as structured
data.
The emergence of these higher-velocity
sources of data coupled with large-scale
data from existing operational systems
explains what makes analytic data so “big.”
Using sophisticated computational models
and statistical techniques on these new
combined data sources make new insights
possible on a more regular basis—effectively
creating a new engine for insights.
Other industries have been leveraging
these complex sources—some for more
than 20 years. Many insurance companies
have developed sophisticated data quality
processes and systems to verify analytics
are using highly reliable data for decision
making. Credit card companies are able to
flag cards that are used in geographical
locations that do not appear in that card’s
prior history and confirm the transaction
with the customer in real time.
13
Likewise, utilities can similarly use unusual
patterns of usage to identify theft and
security breaches. Oil companies are now
able to monitor the real-time performance
of well assets in making decisions to
optimize production. Companies including
Apple (iTunes), Pandora Media (song
recommendations) and Amazon (purchase
recommendations) illustrate the incredible
power of inference engines used in other
industries to help identify customer needs
and make targeted offers.
4. Achieving sustainable value
from analytics requires new
approaches to information
management
Because of the collection of data across the
enterprise, big data analytics require more
discipline around information management.
In turn, more collaboration is required
between different parts of the organization
that had not previously worked together.
For example, since meters are related to
billing, AMI meter data is often owned
by the customer organization. However,
AMI meters are an extension of the
distribution network and can, among other
benefits, provide significant information
for better grid operation, increased
reliability, higher levels of safety, as well as
contribute considerably to improved asset
management. The tension between who
“owns”’ the data can prevent it from being
effectively utilized across the enterprise.
Another significant need is for a common
data model that allows data from all
these silos to come together to provide
meaningful insights. The electrical
distribution grid changes continuously
with the operation of switches, reclosers
and the like. A typical utility’s grid will
include millions of components, including
AMI meters. The ability to understand the
layout of the electrical connectivity model
at any point in time is necessary for the
effective use of some analytics, especially
those around grid operations, outage
management and asset management.
New regimes for information management
have proven to be the foundation for many
industries that successfully leveraged
analytics. These industries, including
financial services, telecoms and health,
are generally much more mature in their
14
information management capabilities than
the utilities industry. Their approaches to
information management typically include
data strategy and life cycle, master data
management and data governance and,
with the advent of the deluge of data made
possible by smart devices, big data.
We know that providing the right data,
to the right person, at the right time is
critical; however, as we previously noted,
data quality is often a major barrier and
remains a major issue for utilities. For
analytics to be useful and dependable,
accountabilities for data quality need to
be in place and data capture activities
must be integrated into process activities.
Adopting measures of data quality that can
be used to drive accountability is also a key
change critical to improving data assets.
Big data and big analytics
The key characteristics of big data are
volume, velocity and variety, and big data
goes beyond the ability to simply store
large amounts of data. An effective big
data solution needs to:
• Derive insight from big data in near
real time for certain types of analytics
needed for utilities. Traditional business
intelligence typically deals with high
volumes of data but it is often used for
after-the-fact analysis.
• Manage large volumes of data while
taking advantage of more cost-efficient
scalable architectures.
From a performance perspective, typical
data analytical engines are often tuned
to do one or the other of these functions
effectively. Solutions for big data are
now leveraging open-source platforms
to support massive transactional systems
that support social media platforms (like
Cassandra, the distributed data system
behind Twitter and Facebook). These
platforms will quickly change the price/
performance ratio of big data, again
transforming what is possible at reasonable
costs. The capability will not be achieved
simply by buying the fastest or largest
infrastructure. Instead, the challenge lies in
careful and considered attention to smart
design of data models, data integration,
data representation during transit, data
storage and analytics applications.
Most utilities to date have managed their
big data by providing analytics in a niche
area; e.g., for theft or meter deployment,
rather than holistic considerations. This
model has been a successful one for
achieving specific use cases, reinforcing our
previously outlined perspective. In addition,
Accenture believes that a foundation
consisting of robust data integration
architecture along with a comprehensive
utility data model is essential to bringing
greater value to the utility and to the
long-term viability of an analytics solution;
in particular, with regard to scalability,
performance, flexibility and extendibility
across the enterprise.
A comprehensive analytics solution should
also be able to handle structured and
unstructured data along with having the
ability to deal with low- and high-latency
analytics. More recent entrants in this
space, primarily C3 Energy and Siemens,
have these key big data model features
built into their solutions.
The cloud has also changed investment
models driving analytics across many
industries. For a utility, building and
managing its infrastructure to meet
these demands is expensive and can take
focus away from the more important
activities around data management and
implementing the necessary change
to achieve the business case. A key
characteristic of the cloud is its ability to
scale up or down on demand, which makes
it an attractive alternative to building and
maintaining an in-house infrastructure
for analytics. Key considerations in
a cloud-based solution include:
• Data privacy and security.
• Cost of data transportation (to and from)
the cloud infrastructure and associated
data latency.
Accenture’s recommended conceptual
solution architecture is depicted in Figure 7.
Data definition—management of
master data
Effective management of master data
across an enterprise is a significant
endeavor and utilities should treat it as
such. For example, operational meter
metadata lives in multiple systems (head-
end, meter data management system, asset
inventory, workforce management) and
could be modified in more than one of
those systems. Enforcing ownership and
confirming data is consistent across these
systems requires robust up-front design
and data governance. Consumer products
companies, which started much earlier in
managing analytics for insight, are now
leading the way in developing capabilities
to manage master data. These companies
have realized the need for a unified
capability to manage and unify data across
their global operations.
Governance
Data ownership, maintenance and
accountability need to be clearly
documented and enforced for disparate
data to come together and be effectively
maintained, which is critical to enable the
mining of deep insights. Governance models
should clearly lay out how decisions and
accountabilities for data quality and data
management will work, including roles and
accountabilities for data quality. Many of
the discussions about the need for a chief
data officer are really focused on the need
for strong and clear data governance.
Data security and privacy
Granular data is a double-edged sword.
For example, while interval data provides
previously unavailable insights about
the consumer and the grid, it can also
provide definitive information about
whether someone is home or away,
what appliances they have and how
they use them. All of these insights can
be considered an intrusion for some,
especially if the data has the potential to
be used for nefarious purposes. Handled
incorrectly, these deep insights about
the customer can violate consumers’
privacy and fall foul of regulations.
As a result, regulations managing data
privacy and data policies are continuously
evolving as regulators and policymakers try
to keep up with advances in technology and
analytics. Consumer sentiment regarding
these types of insights is evolving as well.
For example, when handled carefully with
permissions, consumers are generally
willing to allow very intimate data about
their lifestyles to be managed for them.
But, breaches or inappropriate uses
will be punished severely by consumers
and by the public media. For example,
in 2006, search data from a large set
of AOL users was inadvertently posted
online, leading to the resignation of the
chief technology officer and members
of the product team.5 Careful planning,
management and communication of data
policies and extremely rigorous processes
for client data protection are necessities.

Figure 7. Conceptual architecture for analytics.

Web Reports/dashboards/visualization tools

Real-time analytics Mid-/high-

(CEP; in memory) latency analytics

Analytics data store (meter/device data

repository - structured/unstructured data)

Integration/business process management

Actions/status

• Operational data • Asset data Grid/enterprise systems

• Events • Grid connectivity data • OMS • GIS
• AMI data • Meter data • DMS • MWMS
• Topology data • Other data • EAM • Others
(weather, census, etc.)

Note: OMS: outage management system, DMS: distribution management system,

EAM: enterprise asset management, GIS: geographic information system, MWMS: mobile workforce management system.
Source: Accenture.

15
5. Changes to the operating
model are required to enable
benefit realization from new
insights
Despite the incredible power of the
insights that can be extracted from big
data practices, value can only be achieved
if those insights are used to improve or
transform a process or set of activities.
Providing insight to employees is not
enough—insights should be coupled with
overall goals to drive changes to how work
is actually performed.
For example, insights about revenue
protection opportunities may require
changes to how field investigations
are scheduled and changes to billing
operating practices; for example, policies
that determine actions taken when
theft is discovered. A situation that has
a very strong likelihood of theft could
automatically create a work order for
field investigation. On the other hand,
less-certain situations might be routed
to an experienced analyst for further
investigation. Even more important is the
need to track the outcome of the analytics
and its success rate to continuously
improve on the analytic algorithms,
and stay ahead of intentional misuse.
Figure 8 depicts the two critical aspects
of realizing value from analytics. On the
left, insights come from sophisticated
computation models. On the right, revised
operating model and changes in operating
practices allow for value to be realized as
management models and work practices are
modified. While this is a straightforward
implication, there are numerous examples
in many industries of companies investing
in the left side and failing to facilitate the
change that actually delivers the results.
Telecom companies were notorious in the
early stages of business intelligence for
building data warehouses and providing
analytic workstations without much impact
on the business.
At a minimum, new insights will require
tweaks to how roles are defined and how
certain activities within a process are
performed. Some insights require a more
fundamental rethinking of the operating
model, the basic architecture of how
the business operates. For example, one
European telecom company recently
completed a major effort to gather insight
on its enterprise customers. In doing so,
it realized it had to restructure the role of
the product teams to more effectively deal
with the insights—the current model did
not provide the appropriate accountability
for its teams to be able to use the insights.
Important insights can lead to new
ways to manage teams and work, and
characteristics of the operating model will
need to be refined or reconstituted. We
define an operating model as having the
following characteristics:
• Leadership roles and accountabilities
• Organization and work group structure
• Value metrics—what are the critical
measures of success?
• Governance—how are key decisions
made?
• Processes—how is process performance
and accountability managed?
• Capabilities—who does what, where?
• Culture—what are expected behaviors in
key roles?

Figure 8. Realizing value from analytics: From insights through process transformation.

Insights from analytics Process transformation

Data Computational Insights Roles Process Operating model

management models/analytics • Revised roles • Change operating • Organizing
• Data integration • Computational • Decision- practices structure
• Revised decision
models support tools
Value
• Data cleanse models • Process changes • Leadership
and transformation • Propensity • Scenario roles and
• Revised • New ways
models modeling accountabilities
• System integration performance to work
(e.g., interfaces) • Stochastic • Target lists criteria • Value metrics
• New process
risk models • Query/report • New skills performance • Governance
• Data operations
• Consumer value/ visualization tools metrics
• Behaviors/culture
segmentation
models

Analytics platform

16
The insight about how to optimize voltage
on the system is an interesting example.
In a typical utility, voltage guidelines are
the responsibility of area engineering
managers and operations. But savings from
conservation voltage reductions would
accrue to generation or the commercial
group responsible for sourcing power. How
can this important trade-off decision be
made when the costs and benefits reside
in different parts of the organization? In
reality, a new value metric is probably
required—net margin on power delivered.
This would encourage more optimal choices
regarding voltage and power factors.
Currently, this metric might only be visible
to the utility CFO, or to the head of the
commercial group who manages the plants,
but most of the changes to enable the
improvement to this factor would be made
in operations. Clearly, some refinements to
the operating model would help encourage
the right decisions.
Another key consideration is the availability
of the appropriate skills to unlock the
potential of analytics. According to
Accenture’s survey, 90 percent of
respondents cited access to the right IT
skills as critical or important for their
Figure 9. Ability of utilities to compete for analytics skills in the market.
How well positioned do you believe your company is to compete for analytics skills
in the market?
Poorly
positioned
25%
50%
On par with other companies
Base: All respondents, analytics section.
Source: Accenture's Digitally Enabled Grid program, 2013 executive survey.
companies to manage the increasingly large
data volumes and integration. Constraints
on the analytics talent pool cross industries
and geographies. In the United States and
United Kingdom alone, jobs demanding
STEM skills—advanced knowledge in science
technology engineering and mathematics—
are projected to grow five times faster as
jobs in other occupations by 2018. Utilities
require talent with both engineering
knowledge about the distribution
networks and a deep understanding
and ability to manage and analyze
large amounts of data as well. Utilities
need “data scientists” who have deep
mathematical and statistical capabilities.6
The severe shortage in the pool of analytics
professionals makes it imperative for
analytics users to develop comprehensive
strategies for building, hiring or sourcing
the required analytics resources. Emerging
economies are producing larger numbers of
STEM talent than developing economics, but
this is still not sufficient to meet demand. In
addition, Accenture’s survey shows that only
25 percent of respondents feel their utilities
are very well positioned to compete for
analytics skills in the market (see Figure 9).
Very well
positioned
25%
6. Rapid learning improves
models and increases value
from insights
Most utilities are still at a fairly immature
capability level to achieve full value from
the types of insights highlighted in this
paper. The reality is that analytic models
have limitations, and can only improve
and get more sophisticated (and therefore
more reliable in terms of insight) using
a good feedback loop with experienced
business managers and executives. For
example, improving statistical models
that predict equipment failures requires
insight on that experience over time with
failure rates by asset class. The most
effective insights come from predictive
models, or models with smart heuristics
to define when something is more
likely to happen (for example, which
consumers are more likely to participate
in demand-response programs).
“Try and refine” is a critical approach to
improving analytic models and insights.
Focusing on a few specific use models
where analytics can make a difference is
the most effective way to refine the models
while realizing some immediate value.
Given the challenge of data management,
it is important to have a view of the overall
roadmap and total value of the journey to
becoming an information-driven utility. This
broader view is key to developing a holistic
data roadmap and getting buy-in for the
greater value that analytics can provide,
without having to solve the challenges of
data governance and quality all at once.
The other benefit to starting early is to
begin the longer journey to changing
behaviors and expectations in the business
as soon as possible. Speed to market is
critical, as key behaviors can be better
understood, modeled and predicted.
17
Conclusion
There is significant value to be derived by
applying analytics to the utility business.
While the technical aspects are important,
the real challenge is to infuse insight from
analytics into operations—embedding
analytic insights into business processes
and decisions and to drive a more
fundamental change for the enterprise.
Prior efforts have demonstrated that, while
technical challenges can be tangible, the
business and management changes are
more challenging because they require
a change in how people think and act
18
across the organization. Using analytics
is, therefore, one of the most important
ways for utilities to achieve new results to
support strategic imperatives and improve
shareholder returns. High-performance
businesses make analytics an integral part
of their daily business process, and this
should be a high priority for the utilities
industry. The most important action is
to find value propositions and use cases
that are aligned with a utility’s strategic
objectives and begin the journey.
References

1. Moneyball: The art of winning the unfair
game, Michael Lewis, 2003, W.W. Norton &
Company, Inc.
2. “Smart grid data analytics spending to total
more than $34 billion through 2020, forecasts
Pike Research,” Business Wire, September 17,
2012, http://global.factiva.com.
* Countries in scope for Accenture’s
Digitally Enabled Grid program executive
survey: Argentina, Australia, Brazil, Canada,
France, Germany, Italy, Japan, Netherlands,
Spain, Singapore, United Kingdom,
United States.

3. ”Utility AMI analytics market to hit $9.7

billion by 2020, according to new GTM
Research report,” GlobeNewswire, June 13,
2013, http://global.factiva.com.

4. Anthony J. Rucci, Steven P. Kirn, Richard

T. Quinn, “Employee-customer-profit
chain at Sears,” Harvard Business Review,
January-February 1998.

5. “AOL executive quits after posting of

search data,” International Herald Tribune,
August 23, 2006, http://global.factiva.com.

6. Analytics in Action: Breakthroughs and

Barriers on the Journey to ROI, Accenture,
2013, www.accenture.com.

19
Senior executive sponsor About Accenture Smart
Jack Azagury Grid Services
Global managing director, Accenture Smart Grid Services focuses on
Accenture Smart Grid Services delivering innovative business solutions
jack.azagury@accenture.com supporting the modernization of electric,
gas and water network infrastructures
Acknowledgements to improve capital efficiency and
We would like to thank the following effectiveness, increase crew safety and
individuals for their contributions to productivity, optimize the operations of
The Digitally Enabled Grid program: the grid and achieve the full value from
advanced metering infrastructure (AMI)
Andre Begosso data and capabilities. It includes four
Gregory Bolino offering areas which cover consulting,
Stephanie Bronchard technology and managed solutions:
Jonathan Burton Work, Field Resource Management;
Jenn Coldren Transmission & Distribution Asset
Robin Dicker Management; Advanced Metering
David Haak Infrastructure and Grid Operations.
Tony Histon
Robert Hopkin About Accenture
Vasan Krishnaswamy
Wade Malcolm Accenture is a global management
Trygve Skjøtskift consulting, technology services and
Ashok Sundaram outsourcing company, with approximately
Brent Zylmans 275,000 people serving clients in more
than 120 countries. Combining unparalleled
Accenture Research: experience, comprehensive capabilities
Jason Allen across all industries and business functions,
Lasse Kari and extensive research on the world’s
Charlotte Raut most successful companies, Accenture
Carmen Uys collaborates with clients to help them
become high-performance businesses and
For more information on Accenture’s governments. The company generated
Digitally Enabled Grid program, go to net revenues of US$28.6 billion for
www.accenture.com/digitallyenabledgrid. the fiscal year ended Aug. 31, 2013. Its
home page is www.accenture.com.

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