July 29, 2020
How to Execute a Cost-Effective AMI Project
What makes some AMI implementations stretch out longer than others?
I’ve been working with smart meter implementations for about 15 years now—ever since my days as a consultant at SAP supporting the CIS implementation at one of the largest utility companies in the state of California. Back then, SAP had no solution to support AMI-driven business processes, and as a consultant leading the billing team, I was on point to pioneer a solution while implementing the SAP CIS in one of the most complex regulatory environments possible. Ultimately, the company recognized that the scope of the project was bigger than originally anticipated and decided to defer the CIS implementation to focus on its commitment to the PUC with the AMI roll out.
Simultaneously, SAP had resolved to deliver a solution to the market that would eliminate the guesswork surrounding the facilitation of AMI and the integration of its customer information system with any meter data management system (“MDM” or “MDMS”). SAP had created an AMI Lighthouse Council to drive the solution design, and I transitioned from my experience at the utility right into working with the Lighthouse Council. There, my SAP colleagues and I drove the development of the meter data unification and synchronization (MDUS) integration standard and solution.
This experience highlights the first of several obstacles that utilities can face in implementing AMI--the lack of standard solutions. Below, we list these different reasons, examine how they manifest during a project, and review what steps can be taken by a utility to properly plan for and execute a cost-effective AMI project.
The Lack of Standard Solutions
Utilities used to struggle immensely on their own with the complex integration of their AMI solution components. There are countless ways of doing it, but many of these approaches have drawbacks. The two main themes behind why things go awry include the following:
- the replication of legacy batch integration concepts, which limits the benefits that can be derived from AMI technology, and
- heavily-customized real-time integration that is difficult to complete and a nightmare (at best) to maintain and support
The complexity of the implementations was also driven by the following:
- the number of different solutions/technologies (many with overlapping functionality and offerings)
- the number of impacted business processes, and
- the number of different vendors and methodologies at the table
Creating a solution from scratch from this starting point can be a recipe for disaster.
Leveraging a Solution that’s not Certified in the MDUS Integration Standard
It took multiple years for the SAP AMI Lighthouse Council to develop the MDUS integration standard with SAP’s MDM partners. (Even then, the functionality continued to evolve over multiple releases over multiple years.) Utilities that run SAP but select MDM solutions that are not certified in the standard pay a high price associated with that decision; their projects simply cannot bear the burden of developing all of that integration given the complexity and the schedule and budget constraints. Even when the decision is made to leverage the MDUS functionality on the SAP side (SAP delivers a very large number of real-time AMI interfaces), matching up those enterprise services with APIs on the MDM side can be a very complex task. The burden of developing the matching integration while insulating the MDM vendor’s other utility clients from these changes often proves to be too great of a task for the MDM vendor’s development organization (and therefore for the specific implementation project in question).
The Lack of AMI Implementation Experience
Once utilities have chosen the AMI and MDM solutions and commenced the projects, they typically don’t need to brainstorm requirements and design business processes from the ground up. Best practices are built in to the solutions, and experienced consultants can shine a light in the right direction and help avoid “reinvention of the wheel.” Lacking AMI implementation experience, some utilities can find themselves in vendor workshops focused on activities that are unnecessary and don’t add value.
A smart meter rollout is costly enough (with the requisite investments in meters, network equipment, and solutions), but without a system integrator who has the relevant implementation experience, utilities can greatly exacerbate the large spend requirement, cause unneeded complications when it comes time to implement the solution, and delay the benefits realization from the AMI rollout.
Lack of Leadership
Utilities embarking upon a smart meter rollout typically hire system integrators to provide leadership and lend their experience to the undertaking. The hiring decision fails to pay off, however, when the assigned consultants don’t step forward and actually lead the discussion. An experienced consulting organization will proactively address your most complex business questions rather than allow you to flounder.
How shall a utility delineate ownership of usage with a move in/out situation? How should it handle the execution of disconnections and reconnections associated with move-ins and move-outs when there are so many different scenarios driven by early versus late notifications, date change requests, reversals/corrections of moves that have already been executed in the system, etc.? There are many complex business decisions that have to be made in addition to the actual configuration of the solution, and the failure of the system integrator to provide leadership here can have a profound impact later.
Bringing Vendors to the Table Late
There is no doubt about it: transforming your business with AMI technology is a complex task. There’s a lot to think about and a lot to do; however, rushing into the task without lining up all the pieces will definitely complicate the spend equation.
Bringing in an MDM to implement the functionality without consideration of the overall integration will generate rework; the same applies to the head-end system. As indicated, many critical business processes are impacted by this technological advancement; these new processes must be orchestrated across a multitude of solutions in an integrated fashion. Each of these solutions has a different data model, different approaches for handling business scenarios, and different approaches for integrating with other systems. Implementing one piece in a vacuum will generate rework and undermine the program budget as well as the organizational change management effort.
Likewise, the meter deployment vendor cannot be brought to the table late. The mass deployment requires an involved planning process that also impacts multiple business processes. Some very critical design activities cannot be carried out properly without having this key participant at the table.
Bringing together all the different vendors represents a daunting procurement marathon with selection and contracting. Meanwhile, promises to executives and regulators are looming larger and larger with each passing week. This does not mean, however, that you should get a head start with the implementation in the sequential order of the contract completions. Bringing in individual vendors to start the work too early can actually have the same negative effect as bringing individual vendors in too late—the design will be out of sync. Haste really can make waste.
Lack of Proper Preparation on the Front End
Successful projects are the sum of the right actions undertaken by the vendors as well as the client. The role of the system integrator is to lead and coordinate the technology, people and processes. The utility also has a responsibility that affects the project’s outcome: to prepare early and in the right way.
This technology is new to your company. Your employees do not have experience implementing it, and your business units likely do not know how to run the business with the new technology. The lack of proper research and preparation could potentially hamper your business for many years to come.
For example, the failure to obtain the right help with upfront AMI implementation planning can set the ship adrift and jeopardize arrival at the final intended destination, which is the full realization of AMI-driven business benefits. You may not realize all the envisioned benefits if you overlook the transformational ability of the technology; that means not scaling the integration effort to enable real-time integration. Your project may encounter strong headwinds and perhaps sink beneath the waves if you acquire incompatible solutions or if you don’t anticipate critical business decisions up front and prepare for them in advance of the project.
The utility has a big responsibility to prepare—and to prepare the right way. (You can download our tips here.)
What to do to Execute a Cost-Effective AMI Project
As you can see, there are strategies that can be adopted and activities undertaken both before and during the AMI implementation to control the cost of the project while ensuring that you realize the intended benefits. Success at realizing the business case means that you also remain within the predefined budget.
The process starts with canvassing your peer utility companies that have undertaken the journey before to harness their lessons learned. Consultants are always willing to provide a wealth of information in order to land the advisory engagement or system integration contract, but you won’t know what to believe until you hear about the usual lessons learned, biggest risks, key success factors, etc., from peer utility companies that have already implemented AMI.
Once this process is complete, you can begin to speak to consultancies, then make your selection with confidence. Speak to several of them and determine if the topics discussed with peer utilities are prominently featured in their talk tracks. Can the consultant walk through business processes that they have implemented successfully before, and can they highlight the key business and technology design decisions within each one? Do they actually understand and have they actually implemented the intended solution/architecture? Do they understand the delivery methodology to be leveraged? Failure to truly understand those factors could result in misalignment with the eventual system integrator and result in wasted effort and missed expectations. Making the proper choice for a planning consultant can set you well on the path of a cost-effective AMI implementation.
The education and planning engagement may not only set you on the right path to meeting the budget objectives for the project, but it can also serve as a great test drive with the system integrator for the eventual implementation.
The selected firm should provide your project team with early education about the solution. They should walk you through the new business processes. They should be able to project the key business and design decisions that you will be asked to make on the project and give your business units a longer runway with organizational change management. They should be able to help you quickly refine the solution architecture. They should advise you on the proper strategy for the procurement of software and services for the AMI hardware, head-end system, meter data management system, and mass deployment vendor. They should assist in mapping your release schedule.
If the system integrator is qualified and possesses the right experience, this process should not drag on for many months. Continue to monitor their ability to be prescriptive, get directly to the point, and provide your project team and organization as a whole with a clear vision on the decisive path forward.
The advice given should include leveraging the standard APIs and integration standards as much as possible; that includes advice to select and procure solutions that support those standards. Orchestration of many business processes in real-time over multiple systems demands the tightest of integration, so you should plan to leverage pre-integrated solutions as much as possible. That means leveraging a three-tier approach with pre-built integration like SAP’s MDUS solution or leveraging a simplified two-tier, CIS-embedded solution like Utegration’s MeterData4UTM. Lastly, regardless of the solution approach, it’s unlikely that the software vendor pre-delivered 100% of the needed end-state solution. Look to the system integrator to provide pre-built accelerators that complete the solution. They should have these assets if they are the right consultants for the job.
Once you have selected the right consultants (whether for the planning engagement or the eventual implementation), you must place the onus on them to be prescriptive. Don’t allow prolonged discussions of an exploratory nature. Do not insist on reinventing the wheel with business processes and solution design; they should already know it, and they should lead.
As mentioned earlier, bringing all the vendors to the table at the right time for a joint design effort is absolutely mandatory. There are many moving pieces in terms of technology and services components; one misstep with scheduling can impact all contracts and set in motion cascading cost overruns.
Lastly, a good integration assurance approach will go a long way in keeping your project on budget. Ensure that business scenarios are mapped out in detail for every interface or you will face missed expectations and project delays later down the line.
In summary, executing an AMI project can be a very exciting and extremely rewarding experience for a utility and its employees. Following the advice laid out above is the best way to leverage others’ experiences to ensure that your implementation finishes on time and on budget and delivers on the promised benefits.