The Missing Link: Why Utilities Should Adopt a Digital Construction Management Solution
Shahar Levi, CEO and Co-Founder of Locusview
Digital transformation impacts nearly every business sector, from banking to insurance, retail to real estate, medicine to pharmaceuticals, and more. In the utilities sector, mass adoption of digital transformation has been slow. However, the need to transform manual, inefficient processes with digital solutions is beginning to rise.
A Deloitte Global Industry 4.0 Survey found that 95% of energy leaders agreed that digital transformation is a top strategic priority for their organizations. Yet many struggle to implement change in some of their most critical construction workflows - grid modernization, grid hardening, and incorporation of renewables.
What stops utility leaders from adopting Digital Construction Management (DCM) solutions to solve this problem?
Existing Technologies Offer Partial Solutions
Today, utility construction is managed using a variety of manual processes and partial solutions for field data collection. Paper-based methods are prone to human error, resulting in missing or inaccurate data, project delays, and slow closeouts. The aging utility construction workforce is resistant to adopting new technology and prefers paper, regardless of the errors and delays it represents.
While some utility leaders use paper, other utilities use extensions of larger enterprise systems, but typically include only the data that is relevant for their particular system, forcing utilities to utilize multiple systems for various aspects of the same project, resulting in a disconnected process. Utilities still lack a comprehensive solution.
Change is Hard
The utilities sector is based on habit. Even when utility leaders recognize the need to digitally transform their operations, there is a psychological element at play that makes them hesitant to adopt organizational change. Some utilities may prefer to continue utilizing paper-based or partial solutions rather than take on operational costs and handle the disruption of change management.
Disconnected Processes Limit Efficiency
Another challenge lies in managing different ways of thinking. Construction projects involve multiple personas with different responsibilities.
Executives overseeing the long-term decisions of the company may be focused on financial outcomes and long-term growth. Project Managers handling work orders and daily reporting may be focused on ensuring projects are completed on time and on budget. Field crews - who are the “boots on the ground” of the organization - are typically task-focused on collecting as-built data, verifying materials, and completing reports.
This results in a lack of standardization and accountability among all stakeholders, hindering the ability to adopt DCM.
Multiple Sources of Truth Cloud Judgement
According to a McKinsey 2018 Digital Utility Report, one of the biggest challenges of digitally transforming utility operations is “undocumented data sources and multiple sources of truth”. The McKinsey report explains that, “data users don’t believe their company has a clear data-ownership structure or feel confident that data objects are precisely defined or accurate, particularly when it comes to similar objects from different sources.”
When construction project data contains inconsistencies and inaccuracies, it can call into question nearly every aspect of the project, such as asset location details, material tracking, labor costs, safety checks, and more. These are critical elements of infrastructure construction that utilities simply cannot afford to miss.
Ideally, utility leaders must adopt one technology platform that digitally manages the flow of data from source to consumer and acts as a single source of truth for the entire organization. All stakeholders accessing the same information through the same portal provides clarity across the board, improves decision-making, and builds trust.
The Future of Digital Construction Management
Utility digital transformation is being driven forward by grid modernization to support ADMS and DER implementations, grid hardening to protect against wildfires and storms, and improved safety and reliability of gas networks.
This requires a significant amount of new construction to be supported by a Digital Twin as the foundation for increased safety and efficiency. The need for digital transformation has been accelerated due to COVID-19 as utilities look to reduce risk and eliminate paper to go “touchless” in response to the pandemic.
Over the next 5-10 years, utilities will increasingly rely upon DCM technology to provide them with a comprehensive end-to-end solution to help them digitally transform and optimize their operations.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.