The need for asset management decision-making analytics tools in the utility sector has never been greater. Dollars are scarce, needs are critical and interest rates are rising at levels not seen in decades. Demand is constantly evolving as grids become more decentralized, and ESG mandates become the accepted norm. Every decision must be defensible. Intuition isn’t enough; wise planning relies on accurate data and reliable projections. Given the current planning environment, the question facing leaders is no longer whether to use capital planning software, its which kind to employ.
There are several options on the market, each with their own advantages. Here we look at three solutions utilities should be considering as part of their technology stack.
EAM systems are the most common management software used by utilities as they help prioritize and schedule daily operational maintenance. Their capabilities minimize risks and costs, while improving system flexibility and decreasing dependency on IT.
APM solutions move a bit further along the analytical scale by employing data from a variety of sources to identify and predict where maintenance activity should be directed. Their capabilities allow you to understand the true status of each asset, predict equipment and process issues with accuracy, and mitigate potential problems while balancing associated costs, risks, and benefits.
AIP platforms, are designed for mid- and long-term capital planning, along with risk and constraint analysis. These solutions help utilities manage finite resources when executing capital planning. Their capabilities enable utilities to align long-term capital investment planning with business objectives, optimize capital and operational expenditure and levels of service throughout the asset life cycle, test different strategies and account for uncertainties. Giving you the insights to accurately predict how your infrastructure will look in the future.
It’s clear that any EAM, APM and AIP solution provides some level of business value. With EAM and APM excelling at short-term planning and management. Operations, repair and maintenance are critical functions of any utility. By finding where extensive or repeated maintenance is needed, both types of platforms can reliably improve capital expenditure planning.
A more strategic capital planning approach, however, only comes with AIP software. AIP can accommodate multiple perspectives, from mid-term planning to long-term decisions. Moreover, it can monetize the data that comes from EAM and APM platforms. Virtually all utilities collect valuable operational data, even if the data is in some way incomplete. AIP can use machine learning to fill in the gaps and create accurate models that capture the real-world environment.
Hydro-Québec TransÉnergie, an electric utility serving three Canadian provinces and four U.S. states, has over 800,000 individual assets in its portfolio, encompassing 22,000 miles of high-voltage power lines. Every year it invests billions of dollars in maintenance, replacements and upgrades. Modeling its portfolio over a 50-year timespan would far outstrip the capabilities of conventional capital planning tools; yet with AIP, the utility identifies the exact operational expenditure and capital expenditure strategies that generate the best return on assets while meeting required service levels and controlling risk.
While some solution providers claim their platforms provide analytics, these tools often fall short. They may provide the “what,” but not the “why.” Understanding the broad context for change will help utility decision-makers make better decisions with greater ROI.
Market dynamics, economic and financial conditions, changing regulatory environments can all affect planning. These factors can be built into AIP, providing the wide-field perspective necessary to multi-year, multi-million-dollar capital plans.
Using data and predictive analytics to drive decisions that impact the short-, mid- and long-term strategy of your organization will give you the insight to prepare your utility for the unknown. AIP software can take historic, real-time and future data and analyzes it to simulate and forecast problems that allow you to map outcomes, trade-offs and results. Ultimately allowing you to make decisions that are best for your business.
How much has your organization been underinvesting in its infrastructure, and for how long? How long will it take you to erase that backlog? When you get the answers to these questions from an AIP software, you can collaborate with other departments to map a course of action to get you back on target.
When you know exactly how you could be better spending your money, you’ll also be able to justify decisions to anyone; regulators, internal and external stakeholders.
Dollar amount is usually the first thing that comes to mind when giving the go/no go on a project. But there is more at play than just financial exchanges when thinking of asset management strategies. Utilities should be considering the impact of lots of variables, from risk to climate impacts and the total cost of ownership (TCO) over an asset’s life.
Crucially, AIP answers the “why” behind critical infrastructure projects and empowers utilities to do more with less. For utilities that want to create value from their data, prove that they’re operating sustainably, forecast trade-offs and accurately predict outcomes from their capital planning initiatives, investing in AIP is the wise choice.
Layering AIP over an existing EAM or APM system can multiply the benefits. By leveraging EAM/APM data, an integrated AIP platform like DIREXYON Suite has been proven to extend capital planning significantly.
Learn more about the benefits of asset investment planning for utilities here.