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Electric Utilities in Need of Software Vendors' Leadership!!!

Written By: Mihai Badescu
Published On: July 2 2008

Over the past couple of years, the electric utility industry has changed in terms of the different software solutions available. The old approach to addressing this industry’s needs was the “best-of-breed” approach, meaning that software vendors were creating solutions addressed to only one group or business unit within the company doing one specific task. Generation, Transmission, and Distribution all had their own specific software packages that were almost never fully integrated with each other. Or, the interfaces were poorly designed, thus creating a lot of data issues and discrepancies.



Since an integrated solution didn’t exist yet for this industry, a best-of-breed approach meant having to open different software applications in order to do your day-to-day job, and in most cases, the types of interfaces, including graphical user interfaces (GUIs), didn’t look anything like each other. User training was intense, and therefore the users’ interest in making the system work was lost. There were a lot of data entry redundancies and more often than not, data corruption was an everyday thing.

It didn’t take long before the big software companies realized this problem and decided to try and address it. The quickest and easiest solution was acquisitions, and all those small best-of-breed systems became something else overnight. IBM purchased MRO Software, Oracle purchased SPL, Indus merged with MDSI…all in hope of reaching a bigger audience and solving most, if not all, the current issues.

As a clear leader and innovator according to the latest AMR research, IBM is standing comfortably on top with the old MRO solution, now called Maximo, as its offering. It has all the tools and technology that make the IT people say “Wow!”—and it offers the functionality that responds to the needs of the Generation, Transmission, and Distribution units. But because IBM is on top and is often referred to as the “Cadillac” solution, we can just conclude that it doesn’t come at a cheap price.

An emerging force that also realized the potential of the industry is SAP. Recently, this vendor started adding functionality and tools to its enterprise resource planning (ERP) software to try and meet the industry’s needs; but it still has a learning curve before it fully understands the electric utilities. Even if SAP’s solution is not as sophisticated as IBM’s Maximo in terms of functionality specific to the electric utilities, over the next few years SAP will clearly be a top contender for first place by investing heavily into understanding and developing this industry’s requirements into an integrated environment.

Oracle is making a big push into this market as well, with the PeopleSoft solution. This vendor does not have a complete solution for all the different business units and is lacking some key functionality for the Generation and Transmission, but it is the only one of all the software vendors that does offer a fully integrated solution. PeopleSoft is by far the best solution for Financials, which is easily demonstrated by their dominance of the market share, as well as a very complete solution for the electric supply chain and assets management. They have not made any big acquisitions in this industry to buy a piece of the market share, but surely over the next years a clear move will be made.

I think it is safe to say that this industry is in dear need of a fully integrated solution that offers top-in-its-class functionality that will bridge the gaps between Financials, Generation, Transmission, and Distribution. By now, everyone involved in this industry would agree that best of breed is just not the way to go. Communication between the different business units is the key to success and growth and having a fully integrated solution will make this possible. The only question that remains is “Who will be the first software vendor to make this solution?”
 
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