Asset Lifecycle Management Program: The Foundation for Successful Digital Transformation
In This Article
Setting the stage for ALMP
Traditionally, technology assets reside in geographic and organizational silos where reactive maintenance and incomplete annual refreshes become a prevailing trend, and the "run it until it dies" mantra is followed. In WWT's experience, an excess of 10% and as much as 40% of utilities' network equipment, is end-of-life (EoL) or end-of-support (EoS). This negatively impacts the user experience, reduces automation and increases operational and cybersecurity risks. As a result, utilities need a comprehensive Asset Lifecycle Management Program (ALMP) that minimizes aging technology and eliminates burdensome operational expenses.
It is time to chart a new course as utilities, a traditionally asset-intensive industry, are experiencing seismic shifts in energy sources, customer expectations, workforce fluctuations, downward cost pressures, new competition, cybersecurity threats and more. When implemented effectively, ALMP initiatives propel your organization into a space where you have the right technologies deployed throughout your service territories and across the stack. This maximizes capital investments towards the safety, reliability and affordability of ratepayers and shareholder returns.
ALMP is critical to the business
Foundationally, ALMP applies resources, processes and technologies to refresh outdated assets. High-quality ALMP mandates include collaborative and well-coordinated efforts between business and technology organizations at scale. In addition, effective ALMPs include collaboration across strategic leads, architecture, planning, program management, supply chain management and facility management while using field technicians and systems to track, monitor and measure efficiency through continuous improvement cycles.
Whether through design or effect, utilities often fail to upgrade their technology assets as they fully depreciate and miss annual refresh targets, resulting in a perpetually growing portion of assets that are EoL and EoS. A successful ALMP minimizes outdated assets and:
Mitigates cybersecurity threats
- Aging assets leave your infrastructure vulnerable to cybersecurity incidents, which are costly and leave widespread damage across your organization and customer base.
Ensures business continuity
- Faulty assets that require consistent upkeep and repairs disrupt your daily business operations, including the availability of replacement or backup inventory, costly truck rolls and unreliable digital capability.
Enhances safety capabilities
- Old assets become occupational safety hazards for employees and the public as digital assets are increasingly leveraged to provide visibility on the two-way grid and automate grid management actions.
Optimizes Operational Expense (OpEx)
- Old assets and infrastructure draw significant operational expenses ranging from support, maintenance, manual compliance reporting and the inability to drive automation.
Provides greater asset visibility
- Asset visibility enables automation and data-driven maintenance, provides data required to protect critical infrastructure from cybersecurity threats, reduces truck rolls across your infrastructure and mitigates outages.
Simplifies regulatory compliance efforts
- An increasing number of regulatory agencies continue to broaden compliance requirements, which require proof of accurate production asset inventories. Older assets cannot enable the asset visibility required to comply without a costly truck roll; however, current assets can support automated regulatory artifact creation.
Extracts value from modern investments
- When new standards are defined, a business value is expected from the investment based on its unique capabilities, decommissioning old assets and more. The longer it takes to refresh assets, the lower the investment's value is realized, especially for utilities that charge internal capital carrying costs for assets and labor until projects are completed.
- A modernized utility organization must leverage digitization to provide safe, reliable, affordable power to an increasingly reliant society. A continuous ALMP facilitates information technology and operational technology as drivers toward modernization.
Consolidates truck rolls and outages
- When coordinating across asset types such as network, telecom, storage and servers, costly truck rolls and inconvenient outages are minimized, thus reducing costs and business disruptions.
Challenges faced by utilities as they implement ALMP
Challenges to implementing an effective ALMP are an unfortunate reality; organizations may find roadblocks ranging from:
Lack of standardization
- Because of slow refresh programs, underinvestment or growth through acquisition, most utility technology inventories are antiquated and varied. Standards can seem impossible to implement before becoming obsolete, furthering the lack of standardization.
Ineffective asset management controls
- An inaccurate or lacking Configuration Management Database (CMDB) complicates programmatic site selection and design while underscoring the costs, risks and challenges associated with aging infrastructure.
Perpetuating redundant, manual and ad hoc processes
- When annual asset refreshes are regarded as individual projects instead of holistic programs, tracking, measuring and monitoring your overall asset progress becomes difficult. Bottlenecks are hard to spot, resources are used inefficiently and opportunities to enable automation are missed.
- Critical functions rely on email, spreadsheets and individual personal relationships, which are inefficient. Moreover, expectations become misaligned and lack systemic, efficient processes and tracking.
Delayed asset refresh plans
- Implementing detailed and site-level planning becomes difficult if your team members are perpetually behind schedule. When start dates for site work are delayed for several months, asset refresh deficits often increase.
Working within annual budget cycles
- Because capital is strictly tied to annual budgets, beginning refreshes in Q1 may seem impossible, even when supply chains are efficient.
Inefficient and costly asset storage
- Sub-optimal facilities and ineffective inventory management lead to equipment re-orders and long drive times for engineers to obtain equipment while providing limited inventory visibility across projects. Even when supply chains are reliable, expect monthly delays and added costs.
Lack of scalable resourcing
- Organizational leadership pulls together high-level resources and personnel to configure devices and refresh projects under unrealistic deadlines -- work that could (and should) be managed by lower-cost resources. This increases additional expenses, hampers valuable work and drives burnout.
Tapping into IT service management frameworks, such as a Tiger Team approach, and implementing a future-state model with a trusted solution provider can mitigate common organizational challenges.
The keys to ALMP success
While the path toward achieving effective asset lifecycle management is non-linear, there are essential steps your organization can follow now that will yield future success. Here are core action items for stakeholders:
Establish your cross-functional core team
- Gather a self-contained team with the authority, knowledge and skillsets required to run your ALMP and empower them to make critical decisions.
Identify an executive sponsor
- This individual "owns" the initiative, addresses the core team's challenges, makes a case for adequate resources (human and financial) and manages change amongst personnel.
Articulate your vision and benefits
- The core team and executive sponsor document a clear vision and outline benefits for the ALMP. They collaboratively build working relationships and credibility across critical stakeholders, which include operational teams, site owners and other lines of business personnel.
Establish metrics and measure them
- Identify potential bottlenecks and get ahead of challenges to drive continuous improvement. Also, identify critical metrics and monitor them throughout the process.
Support a fluid and agile supply chain
- Establish a supply chain workflow to expedite hardware procurement for the program and sidestep supply chain constraints; agile planning and pivoting will prevent inventory rot.
Instill humility and establish continuous improvement
- Foster discipline to identify areas of improvement and incorporate action items in your broader ALMP strategies.
Establish effective communication
- Thoughtful and executable communication plans throughout the ALMP initiative are crucial, especially when formalizing the program.
ALMP success with WWT's end-to-end advising and services
Whether your organization is looking for a full-service provider or requires targeted assistance with program advising, WWT is your partner. If you find that your organization is missing critical deadlines because assets are taking too long to ship, WWT can streamline your supply chain through our global network of Integration Centers, leveraging our nearly 300 OEM partnerships to decrease lead times and provide just-in-time shipping.
If your organization regularly misses asset refresh and spend targets, your EOL asset inventory keeps rising, or teams are often redirected to support asset deployments and one-off projects, WWT's field services can help. Furthermore, WWT's program consultants can leverage LEAN methodologies to formulate and help implement a complete ALMP initiative that reduces time, cost, effort and risk.
Our team will work with stakeholders to design and create a future-state process model with identified areas of improvement, such as:
- Defining enforceable and supportive governance processes.
- Reducing variability in deployments to make predictable site refreshes and associated costs.
- Creating trust in network IT Asset Management data while reducing the need for site surveys.
- Enhancing the agility of asset procurement and implementation.
- Refocusing engineering on high-value activities.
Our comprehensive services portfolio from technology lifecycle management, IT service management, LEAN process consulting, supply chain management, technology operations and governance, field services and continual service improvement can meet key dimensions and streamline your ALMP program as shown in the below model:
While there is no "one size fits all" approach to establishing and implementing a successful ALMP, there are core tenets that utilities cannot ignore. With the right processes and partners, your ALMP can prove as an instrumental strategy in optimizing your infrastructure and adapting successfully to current and emerging energy trends.