Oracle has released an intriguing study that includes a survey of utility executives who collectively say they are not doing so well when it comes to Big Data – i.e., the challenge of making sense of large volumes of complex data that can be transformed to help improve business operations and customer service. In fact, the utility executives rank themselves among the least prepared to handle the data deluge, something we at Pike Research have noted as a major challenge for the industry as it transforms itself with smart grid technologies.
Here is the relevant scorecard, according to Oracle’s study:
- Public sector (government), health care and utility industries are the least prepared, with 41% of public sector executives, 40% of health care executives, and 39% of utility executives giving themselves a grade of “D” or “F” for preparedness
- Overall, 29% of the C-level executives surveyed from 11 different industries in North America give their firms a “D” or “F” for preparedness
- By contrast, communications industry executives claim to be the most prepared to handle the data deluge, with 20% giving themselves an “A”
Practically all the executives surveyed are concerned about the near- to mid-term data challenges, with 97% saying their firms must improve their use of data over the next two years. Thus utilities are not alone, just behind the curve compared to others.
So why are utilities flunking out? One reason is a lack of experience. Few utilities have ever seen such a huge volume of data generated from utility processes. In the past, utilities read a meter once a month and sent a bill. That’s roughly 12 data points per year per meter. With the latest technology, that volume expands exponentially, with the potential number of meter reads increasing to more than 35,000 per year per meter (based on 15-minute intervals). That’s an increase of 291,900%!
And that’s just the meter read. Some advanced meters also send and receive other data related to pricing, pre-paid options, load control, tamper detection, and temperature, which can amount to hundreds of additional attributes that must be processed and correlated. In addition, the grid itself is being outfitted with a plethora of new two-way communicating devices that report their measurements even more frequently than most smart meters. These additional types of data create new challenges that many utilities are just now trying to comprehend, and leverage to their benefit and that of their customers.
Moreover, the utility industry lacks skilled data analytics experts. With just about everyone across the corporate spectrum seeking these people, utilities have to compete for scarce talent. Most people with these skills are gobbled up by sexier industries, like communications or web-based businesses. As a result, utilities are turning to third-party vendors for help with data analytics, and that will help ease the burden for the near-term. However, utilities that want to leverage the data in their own way and perhaps save the cost of outsourcing will need to bring this expertise in-house.
The data deluge is a growing, long-term issue that will test utilities for years to come. The message from the Oracle survey does have an upside, however: executives know they are failing, which is the first step in making the necessary changes to improving their performance.