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The CIO of this Australian utility offers some experience-based insights on leading a transformation that involves not just structural change but entirely new ways of working.
My company’s name, Synergy, is a word meaning the creation of a whole that is greater than the sum of its parts. It comes from the ancient Greek verb synergos, or “working together.”
Combine those two definitions and you end up with a fair description of how I define my job as Chief Information Officer: I help my department, Information and Communications Technology, or ICT, bring people and technology together to create new business value. That’s because, as I see it, ICT (the equivalent of the IT function at other companies), is first and foremost an enabler of the business.
When I became CIO in 2015, I had two major areas goals. The first was to get our foundational technology in order: installing robust new ERP systems of record for financials, HR and payroll, logistics and plant maintenance. The second was adding value to the business by helping Synergy stand out in a competitive energy market.
Dismantling Silos, Becoming Agile
By the end of 2016, after several major project deliveries, our foundation technology was sound. So in 2017 we shifted the focus to adding business value. This involved both a major reorganization of the ICT business unit and a search for innovative new ways that customers could engage with us. The two-fold aim: differentiate Synergy from its rivals, while making the company a great place for my team to come to work every day.
Synergy has been through some significant changes since its formation in 2006, most notably the government-instigated merger with Verve Energy in 2014. A lot of the structure and the way ICT worked was a relic from before this time and not serving the business to its full potential.
The traditional structure aligned ICT with each of our four business units: electricity generation (which had been Verve Energy’s business); retail electricity service for our roughly 1 million customers (which had been Synergy’s business); wholesale energy trading; and shared corporate services. Each unit looked after its own ICT interests, resulting in duplication of activities and other inefficiencies.
Another problem: the application development teams were shackled to a “waterfall” approach to delivery, which was at odds with what our business units repeatedly said they needed – “quick to deliver” and “quick to market” – if they wanted to enliven and deepen customer engagement.
So we dismantled the ICT structure that mirrored the business units, replacing it with an operating model built around five teams (or “families,” as we call them). These are organized around ICT’s fundamental areas of activity: architecture; customer (external customer-facing systems, such as CRM, websites, trading, and robotics); analytics (business intelligence and advanced analytics reporting); core systems (internal foundation ERP systems, including finance, logistics and plant maintenance); and ICT operations (infrastructure, applications and production support).
And we rolled out the Agile methodology across all teams – even in the day-to-day operations area, which wasn’t initially an obvious or easy fit. But my team members are starting to reap the benefits of Agile, with greater role clarity and new opportunities for many of them. More important, the business units we serve are reporting high satisfaction with the new model, because it is delivering what they need in order to offer what Synergy’s customers want.
As part of the transformation, we began using robotics process automation, or RPA, to automate a lot of our repetitive processes. This returned positive results much faster than expected and has worked out extremely well: in the first nine months of the RPA program, we focused on SAP billing exceptions. Rather than having our outsourcer process them, we were able to run the robots every day to reprocess each exception. That’s been our biggest win in the shortest time frame: in nine months, we saved about a million dollars.
Now, we are looking for new use cases, such as in service and password resets. We’re also looking for opportunities for chat bots that use machine learning to find repetitive processes. And we are analyzing memory to look for patterns. If an activity is repeated, I think there’s an opportunity to adapt the robots to handle that process.
Other improvements, such as the migration of our applications to the cloud, have happened more passively. Vendors for some of our applications, such as SalesForce and Microsoft Office 365, have encouraged us to migrate to the cloud, which we have done and we are okay with that. The only big one left is SAP’s ERP system, and we still need to develop a strategy of when and how we’re going to do it.
On the wish list
So where do we go from here? What are the next steps we take to create additional business value?
As far as new technologies go, I think augmented reality and virtual reality will be important for us by making maintenance safer for our employees.
For example, virtual reality will enable employees who needs to do work in a confined space – say during an outage of one of our generating units-- get to know that space before they actually go inside. They’ll be able test a number of scenarios to identify any areas that might be risky – to learn, for example, that if they lean on that scaffolding they’ll fall over and hurt themselves. Safety is always our number one priority, and working in a generating utility of our size can be dangerous. If we can use technology to make any task just that little bit safer, that’s a great result for everyone.
Analytics will also be important. Everyone wants data, everyone wants to analyze data, everyone wants to understand data, and I think that area will also continue to grow. For me to remain relevant as a CIO, I will need to work closely with the business to find out how they want to use this data.
One new technology that has particular relevance for us, an electric utility: electric vehicles. They will present a challenge for us. For example, in western Australia’s wide-open spaces, how will the charging infrastructure be set up? But meeting this challenge will give us another opportunity to gather and analyze data – and to interact engage with and provide value to our customers.
A traditional ICT operating structure may need to be completely dismantled in order to eliminate duplication and other inefficiencies.
Robotic process automation offers an opportunity for quick wins. At Synergy, RPA saved the organisation $1 million in the first nine months.
Augmented reality and virtual reality will be important tools for industrial safety. For example, they will allow employees to get to know spaces and their risks before they actually enter the space.