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UTILITY WEEK | 5TH - 11TH FEBRUARY 2016 | 23 Sponsored report Interview It's not if, but when Wipro's Arun Krishnamurthi says utilities cannot afford to wait and see: being a bystander is not an option. M ention digitisation and the Internet of Things to Arun Krishnamurthi, and the response is straightforward and to the point. "For the utility industry, digitisation and the Internet of Things aren't optional extras," insists Krishnamurthi, vice presi- dent and global head for utilities at global IT outsourcing and integration giant Wipro. "It's not a question of 'if ', but 'when', and at Wipro we expect mainstream adoption over the next 18 months to two years. It's hap- pening, and it's happening faster than many people realise." Granted, the prevailing view within the industry tends to regard Krishnamurthi's timescales as ambitious, perhaps even very a ambitious. No matter: Krishnamurthi cheer- fully reckons that the force of argument is on his side, and doesn't hesitate to marshal the requisite facts to support that view. "Of course there are challenges – just as there were with digitisation within the financial services industry, for instance. But ultimately, market forces will impel utili- ties to adopt digitisation and the Internet of Things. First, their customers - both domes- tic and business customers - will be demand- ing smart digital services, just as they today expect banks to offer Internet banking. And second, their owners and investors will be pushing them to adopt these technologies. Because these are technologies that don't just enable utilities to do things faster and better, but also enable them to do them more efficiently, and at less expense." That said, he acknowledges, there's work to do before digitisation and the Internet of Things become widespread operational realities in the utility sec- tor. Even once cultural issues have been overcome, and the need for new tech- nology accepted, there are still practi- cal questions as to precisely how to embrace digitisation and the Internet of Things. As Krishnamurthi sees it, there are two underlying challenges. "The first is a question of strategy: which way is best? We see organisa- tions that know that they want to do it, but which are paralysed by indecision – one utility we know, for instance, is look- ing at how some of the UK's largest retailers have approached digitisation. That's fine, as far as it goes, but overlooks the fact that retailers and utilities are very different ani- mals, despite superficial similarities in the fact that they both sell to consumers. Utili- ties are essentially commodity providers, while retailers are more brand-centric. What works for a branded retailer won't necessar- ily work in a utility environment. "Second, utilities have a huge installed base of legacy applications and equip- ment, which has been built up and refined over time. And moving this to a fully digital environment, with millions of bits of infor- mation arriving every second, is frankly a big challenge. What's more, those legacy systems are data-centric, when they need to be customer-centric – which is a further challenge. Our job at Wipro: helping utilities address these challenges, because informa- tion technol- ogy is our core competency." manual network control can be automated, further improving efficiencies. "You don't need to have a man in a con- trol station making decisions about when to stop and start pumps," enthuses Laurie Reynolds, managing director of Aquamatix, a developer of smart water technology solu- tions. "Central computers, connected to intelligent devices via the Internet of Things, can make much better-informed decisions." That said, while digitisation and the Internet of Things both have much to offer utilities, observers point to the very evident headwinds that the sector faces – headwinds in the form of such issues as legacy systems, internal culture, business cases, and turning technology aspirations into solid reality. "The blunt truth is that very few in the utility sector are looking at digitisation and the Internet of Things and really ask- ing themselves how they can use these technologies to transform their businesses' end-to-end processes," says Susan Furnell, founder at strategy consultancy Furnell Con- sult. "Typically, you'll see an innovation unit stuck somewhere on the side of the organi- sation, looking at the potential, but strug- gling to build a convincing business case. To get the real benefits of any connectivity, you need that connectivity to extend across a sig- nificant proportion of the network." Meanwhile, Gareth Hepworth, technol- ogy and innovation manager at gas industry data manager Xoserve, raises the pragmatic question of how best to exploit the data that digitisation requires, and which the Internet of Things will deliver. "Exploiting digitisation and the Internet of Things isn't about trying things out to see if they're possible, it's about delivering ben- efits," he says. "Not only are the benefits not clear enough, but information technology is arguably not the industry's core competence. Instead, there's a plausible case for minimis- ing risk and maximising benefits through working in partnership with businesses for whom information technology is a core competency." Even so, says Furnell Consult's Furnell, that still leaves an awkward circle to square: justifying digitisation and Internet of Things initiatives that are not immediately self- financing in terms of operational efficiencies. "Technology companies tend to start from the premise that the important thing is to capture customer relationships, and they'll figure out how to monetise it later," she says. "Utilities tend to want detailed upfront answers to questions such as monetisation, and at the moment those answers just aren't there. There's a requirement for vision, and it's generally lacking." Brought to you in association with