OT | IT convergence creates game changing strategies for Energy & Utility Organizations

There has been a major shift happening in the Energy and Utilities industry over the last few years.?The traditional ways of separating technology assets from operational assets is converging on it itself.?It makes sense to me now that I am working with an organization whose bread and butter is global enterprise asset and service management.

I think the first place to start is understanding the differences between these assets, so let’s start there.

Energy and Utilities information technology (IT) asset refers to any technology-related item or system used within the energy and utilities industry to manage, monitor, or control energy and utility infrastructure. These assets can include hardware devices, software applications, and data storage systems, as well as communication networks and other IT infrastructure.?Some industry specific examples would be, supervisory control data acquisition (SCADA) systems, metering and billing systems, geographic Information Systems (GIS), enterprise resource planning (ERP) systems, or cybersecurity systems.?In some organizations, SCADA and GIS system may reside under the Operational Technology arena depending on a customer’s perspective of these assets and the equipment use to support these systems.

Energy and Utilities operational technology (OT) assets refer to the physical devices and systems that are used to monitor, control, and manage energy and utility infrastructure in real-time. These assets can include sensors, actuators, controllers, and other devices that are used to automate and optimize energy and utility operations.?Examples would include, well equipment, pipeline equipment, power generators and turbines, transmission and distribution systems, smart meters, automated demand response systems, water treatment and distribution systems, or even physical cyber security equipment.

The management of IT assets has matured significantly over the years however OT assets continue to create a burden for energy and utility organizations.?Some of the challenges we are facing are:

• Much of our OT equipment is aging and many companies have OT assets that are dated and in need of maintenance or replacement. This can result in higher maintenance costs, decreased reliability, and increased downtime.
• There is a profound increase with cybersecurity threats around these assets. There is also clear lack of an incident response planning and the ability to manage OT. As OT assets become more connected and digitized, they also become more vulnerable to cyber-attacks. It is essential that companies invest in cybersecurity measures to protect their OT assets from hacking, malware, and other cyber threats.
• Over time there is a significant decrease in the level of skills needed to support OT assets. Expertise in OT technologies, particularly in areas such as cybersecurity, data analytics, and system integration can make it challenging for energy and utility companies to maintain and optimize their OT assets.
• Because these assets are critical to provide energy for billions of people the assets are heavily regulated. Energy and utility companies must comply with a range of regulations related to OT asset management, including safety, environmental, and cybersecurity regulations. Compliance with these regulations can be complex and costly.
• Integrating these assets become increasingly complex and energy and utility companies must integrate their OT assets with their IT systems, such as SCADA, ERP, and billing systems. This can be challenging due to differences in technology, data formats, and protocols.

With all of these challenges and the advances in modern technology, machine learning, artificial intelligence and the birth of digital twins it is time for us to think about these challenges differently and leverage these advances more effectively.

Where is the best place to start?

The challenge our industry is facing today is that these assets in many cases remain separated from our IT assets and OT information resides in other kinds of work and asset systems such as Maximo, Oracle and SAP for example. These systems are large, expensive to maintain, hard to upgrade and at the end of the day they are not service management applications. Ultimately customers must consider how to integrate these systems into platforms such as ServiceNow or consider housing key OT asset information into Service Management applications so they can manage the process and risk end to end.

My recommendation is to start this journey with OT security.?By far, this is a challenge which must be controlled and the risks mitigated immediately and effectively. Using OT Security Incident Response also addresses a big void we have in incident response planning and management. However, you cannot understand your risks or respond to incidents without ensuring you have a complete inventory of your risks and the state of your assets vulnerability.

There are a number of technology vendors available today who do a great job of discovering these assets and have the ability to pull this information into a configuration management database which can be used to track, understand, report and manage these assets.?Some of the major players in security vulnerability scanning include, Microsoft, Claroty, Armis, Dragos, Nozomi and Tenable for example.

Once these discovery tools identify the assets, the information can be pulled into a configuration management database and in some cases a database purposely built for managing OT such as ServiceNow OT management. The next step is aligning these discovered assets and solidifying your vulnerability management processes to keep these assets maintained and patched.

Once these processes have been streamlined, the natural next step is managing the entire lifecycle of the assets and tracking the health, age, risk and discovering ways to automate the processes maintaining them. Another advantage is the ability to explore utilizing digital twins once you understand all of your assets.

Digital twin technology refers to a virtual replica of a physical object, system, or process that is created using data and models. The digital twin is a real-time representation of the physical asset, updated with data from sensors, control systems, and other sources. It can be used to simulate, predict, and optimize the performance of the physical asset, enabling better decision-making, and reducing maintenance costs.

Digital twin technology can be applied to a wide range of assets, such as buildings, industrial equipment, and even entire cities. It enables users to monitor the performance of the physical asset in real-time, identify potential issues before they occur, and optimize the asset's performance through simulations and "what-if" scenarios. For more detailed information see this fantastic article from Deloitte University Press, Industry 4.0 and the digital twin.

For example, in the energy and utilities industry, a digital twin of a power plant can be created using data from sensors and control systems. The digital twin can be used to simulate different operating scenarios, predict maintenance needs, and optimize the performance of the power plant. This can lead to significant cost savings, improved efficiency, and reduced downtime.

It is only natural to think that is possible that companies can consider using field management application within a platform to streamline how these assets are repaired, maintained, replaced or patched. Having the ability have this in one platform or tightly integrated with other work management systems is a game changer for world class operational management.

Tying all of this to governance, risk and compliance systems is also critical. As a lot of this technology is aging and vulnerable to cyber security threats, leveraging platforms to manage our mitigation action plans and automate the creation of remediation tasks?gives energy and utilities organizations a complete 360 view of their assets and associated risks. This viewpoint is absolutely critical to ensure compliance with regulatory standards and having the ability to report in real time helps reduce auditing overhead by having out of the box reporting to attest against findings and subsequent mitigation action plan processes which in our industry is incredibly complex.

The additional possibilities of building these services out on a unified orchestration platform has no limits in my mind. Additional use cases to consider is leveraging a unified orchestration platform to improve emergency management, safety management, and perhaps one of the more promising areas is Environmental, Social, and Governance (ESG).

ESG is a framework used by investors, companies, and other stakeholders to evaluate the sustainability and ethical impact of an organization's operations and practices. ESG factors are increasingly important to investors and other stakeholders, as they are seen as critical to long-term value creation, risk management, and reputation. Many investors are incorporating ESG considerations into their investment decisions, and companies are increasingly disclosing ESG information in their annual reports and other communications.

Maintaining assets to ensure responsible environmental sustainability is absolutely critical. In many cases, some of the worlds most horrible environmental tragedies happened with improper processes and poorly maintain equipment. It is also important that every employee has a laser focus on the impacts of these environmental and social responsibilities so we can build a world wide culture of responsibility and environmental accountability. Having a platform that can weave these essential practices into everything we do and how we do it is imperative to our long term growth and sustainability in the energy and utilities vertical.

In summary, I believe the time to strike is NOW. Our energy and utilities strategic leaders are thinking out of the box on how best to manage these challenges. In my opinion, moving to centralized orchestration technologies and processes is an essential way to move the dial on our strategic imperatives in our industry. Its time to simplify, leverage AI/ML and common platform architecture to be able to rapidly change, innovate and invest in the areas of your organization which are ripe for growth and operational excellence.

I welcome your feedback and would be happy to visit with you to learn how I can help you work through some of these challenges. Please reach out should you want to discover together, how to change the game!

Additional Reference Materials to Consider:

Matt Chambers: How utilities digitize operations securely

Michael Chang, Bodo Koerber and Murat Soganci: Converge IT and OT to turbocharge business operations’ scaling power

Muraleeswaran Karunanithi: Why Operational Technology Security Cannot Be Avoided

Federal Energy Management Program: Operational Technology Cybersecurity for Energy Systems