September 25, 2020
How to Build a Successful Utility Analytics Strategy
Part 4 in a Series on Common Gaps in Building an Analytics-Driven Organization
As everyone living in today’s world knows, 2020 has been full of surprises. Life in the world of utility analytics is no different. Of course, surprises can and do happen to everyone – including utility organizations. That's why utilities need an analytics strategy that is flexible enough to accommodate changes, while remaining focused on end results.
That brings us to the topic of today’s blog: How to build a successful analytics strategy. Based on the experience of our long-time utility analytics experts, there are three keys to a utility’s success.
Key Number One: Address the elements of the UAI dimensional framework for utility organizations
Did you know there is an excellent existing framework that helps you build upon the industry’s lessons learned, avoid common pitfalls and steer clear of costly mistakes? It’s the dimensional framework developed by UAI (Utility Analytics Institute). If your utility organization is planning or implementing analytics initiatives, leveraging this tool as you build your strategy is a wise move.
As I have observed before in previous blogs, the UAI framework was developed by utility practitioners for utility practitioners. I tend to think of the framework like a wheel. When all elements are in balance, the wheel can roll properly. A well-developed strategy will assure that all essential elements are correctly balanced for success.
- Review the first blog in this series which covers the benefits of the Seven Dimensions of Analytics Maturity as defined by the Utility Analytics Institute (UAI). Read it now for important background information.
Key Number Two: Create a Homegrown Strategy
All good strategies envision a desired future state, enable a journey of progressive steps and improvements, and lead the organization to achieve the desired end-state. Make sure your analytics strategy is personalized for your organization—not a clone of something created for some other organization and situation. Your roadmap should be specifically oriented to your utility and fully consider the current state as a starting point. Make no mistake: knowing your starting point is just as critical as defining your goals.
For best success, assure that your utility’s analytics strategy fully considers the current state and desired future state of the following:
- Overarching strategic plans, initiatives and timelines
- Technology footprint – your utility’s specific ecosystem of technology that will support the implementation of the analytics strategy. Leverage existing investments. Identify gaps and define mitigating approaches
- Organizational dynamics – key organizational units, their responsibilities and decision-making authority and accountability. Consider how organizational units will change over time and how planned changes may affect needs and responsibilities
- Operational business processes - key business processes, especially those that must change to support strategic initiatives or eliminate known barriers
- Data Resources - identify gaps and define mitigating approaches
- Governance requirements for data and technology
Things to avoid
Do not use a cloned plan. Recognize the unique state of circumstances that exists in your organization. Resist the temptation to ‘adapt’ a strategy borrowed from a ‘similar’ organization. You could get lucky, but more likely you won’t. Foundational needs that get overlooked are usually expensive to retrofit later. Doing your own homework is better and usually cheaper in the long run.
Key Number Three: Explicitly align analytics initiatives with existing top-level strategic goals, key challenges, and known pain points
Successful strategies get broken down into achievable steps and initiatives. In order to be effective, initiatives must actually be completed AND provide the intended value. Analytics initiatives that are clearly tied to top strategic goals have the greatest chance of being successfully implemented and deployed. It sounds basic, but unambiguous documentation of the connection between analytics initiatives and the strategic goals they support is often neglected. A poor job here can result in abortive efforts, unfinished initiatives and wasted time and money.
Conversely, proper emphasis in this area helps assure that efforts start and remain aligned with the strategic direction of the utility. It can result in greater support for analytics initiatives by providing executives clarity on the connection between analytics initiatives and the strategic goals they support. Steering committees and others responsible for the allocation of funding and resources will appreciate the transparency and accountability.
- Use a weighted matrix to explicitly map each analytics initiative to the particular strategic goals, key challenges, and pain points that are addressed
- Require some version of this matrix to be included in the chartering documentation of each analytics initiative
- Provide an organization-wide roll up matrix to show the value-add mapping of all analytics initiatives in aggregate
- Be as quantitative as possible in these mappings
- Develop KPIs to measure the financial impact of the initiative upon its completion and watch your analytics strategy deliver value over time
Things to Avoid
- Do not presume the connection between the initiatives and their value-add is obvious or clearly understood across the enterprise
- Do not presume that piecemeal initiatives not tied together by a cohesive strategy will deliver the expected value
If your utility is embarking on analytics initiatives, please do not waste time and money on uncoordinated piecemeal efforts. Reach out to Utegration for a no-cost discussion and exchange of ideas on the subject. In particular, my colleague Barry Ellis and his team specialize in helping utility organizations create, align and execute analytics strategies that follow these three keys to success and fit your utility’s unique needs.