Justifying an Asset Management Software solution. The Technical and Strategic Viewpoints.

Thinking at both a strategic and technical level when justfiying solutions to problems, avoids the common pitfall of incrementally increasing complexity of IT architectures.
September 27, 2023
Dane Boers
Justifying an asset management software solution

Modla recently put forward a proposal to an electricity distribution utility, to justify an investment in our data to decision making platform.

When justifying the addition of another software solution to your architecture, a common pitfall is to ignore the strategic context, and focus solely on the problem and needs.

Here there are two viewpoints:

  • The Strategic
  • The Immediate Need / Problem

The strategic is what sets the boarder requirements and direction from the business, while the problem represents the current pain points.

Starting with the strategic view, it is important to be honest in the self reflection of the current business state. Below is an example of such an assessment:

Strategic Business Context
We understand that how we do things today, may not be how we do them tomorrow.
We also understand that data-driven decision-making is where we want to be.
We understand that better decision-making leads to better outcomes for our customers.
We understand that collaboration with others is crucial to speeding up our improvement journey.
We understand and accept that we are resource-constrained.
We understand that we have varying levels of data quality and completeness.
We also understand that we're in this for the long term, so we need to do a better job of capturing, retaining, improving, and finally leveraging, our knowledge capital.
So Solution Requirements
Solutions must use a flexible and composable framework that allows us to remain agile and continuously improve.
Solutions must use a repeatable, logical, and use transparent approach that connects data through to decision support.
Solutions must be adaptable to our value frameworks and support our strategic objectives.
Solutions elements must be easily sharable.
Solutions should, where possible, require minimal resources for operation and training.
Solutions must operate with limited data sets and improve in parallel with our data.
Solutions, and the evolution of their elements, must capture thinking, assumptions, reasoning, and relationships.
Which Strategic Benefits
Allows us to avoid using multiple, separate tools and software in the future, simplifying our systems architecture.
Is required for alignment to Asset Management Standards (ISO50001) and regulatory reporting.
Ensures that the solutions deliver the outcomes in the areas that we need.
Allows us to leverage the learnings of others and converge on industry best practice.
Allows us to stop working in the process and instead work on improving them.
Allows us to start now with what we have.
Reduces future re-work, accelerates learning, and establishes a centralized knowledge base.

It's important to note that this table describes the broader direction of this utility with regards to an Asset Analytics function, and the benefits described are as a result of adoption of an approach, rather than a specific solution or resolving a need.

Once the strategic view is understood, then we can dive into the specific needs or the immediate problem. Again here is an example of such an assessment:

Business Needs
We are required to determine suitable investment to ensure a reliable, resilient and safe network.
We are required to adopt a whole-of-life approach to our assets and make trade-offs between Opex and Capex.
We are required to make data-driven decisions by projecting asset health and risk under various CAPEX and OPEX scenarios.
We are required to understand and improve our SAIDI & SAIFI performance, as well as overall service to our customers by improving historical trends and identifying and targeting the correct assets.
We are required to maintain our assets through responsible and cost-effective spend of capital.
So We Existing Arrangement
Currently use excel to build our future forecasts from historical spend for less critical assets. The level of detail differs depending on the use cases (Risk, Repex (Age), (Historical spend).
Adhere to our strategy documents and delivering guidelines.
Conduct annual assessments on asset health and intervene based on these.
Continuously monitor SAIDI & SAIFI measurements indicating current network reliability and performance.
Generate separate business cases and asset lists for each asset class, to be delivered independently.
But we want to Investment Objectives
Correctly identify the optimal timing to make each investment (E.g., at end of life).
Use a whole life asset approach, specific for each asset.
Determine suitable investment options to improve or maintain our asset health, under various constrained scenarios.
Be able to estimate future SAIDI and SAIFI performance to ensure we deliver a reliable service.
Use an integrated approach where we can identify optimal investment packages across asset classes.
Which would result in Benefits
Cost Savings estimated at 1% of annual distribution capital spend, and increased transparency of decision making.
Included above.
Cost Savings estimated at 0.1% of annual distribution capital spend and increased efficiency of resources.
Ability to more accurately manage Quality of Service (QoS) and future reputational damage risks.
Cost Savings estimated at 0.1% of annual distribution capital spend and increased efficiency of resources.

This is where the more tangible benefits can be quantified for solving a perticular business problem.

When selecting a solution (In particular a software solution), it should be able to address the immediate need, while also fitting within the strategic view of the business.

Failure to account for the strategic direction, in this case could result in:

  • Convoluted IT architectures with many solutions
  • Inefficient processes
  • Failing to capture the strategic benefits outlined in table 1 along the way.

Just food for thought.....