pwr_february-2024 - Cover3

DIGITAL TRANSFORMATION
Meanwhile, technology workers are
in high demand, not only in the energy
and power industries, but also in almost
every other sector of the economy. The
U.S. Bureau of Labor Statistics (BLS)
predicts overall employment in computer
and information technology occupations
will grow 15% from 2021 to 2031, which
is much faster than the average for all
occupations. Furthermore, the BLS says
the median annual wage for this group
was more than double the median annual
wage for all occupations in 2021,
which is at least partly a reflection on the
demand for these workers. While that
may make it hard to hire in-house workers
to implement and maintain OT and
ICS projects, it shows the value of having
a trusted contractor that has the experts
needed to manage these systems.
Regulatory, Policy, and
Stakeholder Considerations
Power companies have a keen focus on
reliability and for good reason. Customers
don't appreciate it when their power
is off. That's why tools that improve reliability
are so important.
There are many digital solutions available
today that increase power plant reliability,
and many more that are likely to
be available soon based on AI and machine
learning solutions. Yet, many observers
worry about the effect AI may
have on operations, especially how it
could impact the workforce and jobs.
Regulators and policy-makers are
contemplating the best way to provide
oversight on AI applications. A Harvard
Business Review (HBR) article suggested
that the degree of trust in AI varies
with the kind of decisions it's used
for. " When a task is perceived as relatively
mechanical and bounded-think
optimizing a timetable or analyzing images-software
is regarded as at least
as trustworthy as humans, " it said. " But
when decisions are thought to be subjective
or the variables change (as in legal
sentencing, where offenders' extenuating
circumstances may differ), human
judgment is trusted more, in part because
of people's capacity for empathy. "
In the OT world, AI will most likely be
used more for " mechanical and bounded "
decisions. Still, the HBR article
said more stringent AI regulations " are
on the horizon (at least in Europe and
the United States). " With that in mind,
companies will need new processes
and tools, such as system audits, documentation
and data protocols (for traceability),
AI monitoring, and diversity
February 2024 | POWER
awareness training to meet changing
regulations. " A number of companies
already test each new AI algorithm
across a variety of stakeholders to assess
whether its output is aligned with
company values and unlikely to raise
regulatory concerns, " the article notes.
Creating a Sound Digital Strategy
While it is always prudent to examine
all options and chose a course of action
only after weighing pros and cons thoroughly,
there is significant risk in moving
too slowly down the digital transformation
path. Today's power and energy markets
are very competitive, and it's easy
to fall behind in the race to stay relevant.
To achieve their mission of supplying
dependable electricity to customers
around the clock, power companies
must plan, design, execute, operate,
maintain, and secure assets in a reliable,
sustainable, cost-effective, and responsible
way. To keep stakeholders happy,
they must complete projects on time
and on budget. Digital technology provides
the tools necessary to accomplish
those goals.
A sound digital strategy is required to
effectively guide an organization's digital
transformation and leverage digital technologies.
Among the first items companies
must focus on is developing a clear
vision with specific goals and desired
outcomes. The digital strategy should articulate
how digital technologies will support
the organization's overall objectives.
A company's digital strategy must
also align with its broader business strategy
(Figure 4). A customer-centric focus
is crucial, and it's not always intuitive
who the customers are. For example,
customers for most power plant digital
solutions will be internal to the company,
rather than external. Operators and
maintenance workers are often the people
who will benefit most from technology
being deployed at a power plant, so
understanding their needs, preferences,
and behaviors is necessary to ensure
the technology selected is a good fit.
Customer insights and feedback must
be used help drive decision-making and
shape digital deployment for these initiatives
to be successful.
Given the rapid pace of technological
advancements, a good digital strategy
must embrace agility and flexibility. It
should allow for iterative and incremental
improvements, enabling the organization
to experiment, learn, and pivot
when necessary.
A data-driven approach is essential. In
www.powermag.com
4. Many power companies are adding more
sustainable resources to their mixes; therefore,
digital strategies must also be flexible
to accommodate ever-changing conditions.
Source: Envato Elements
other words, decisions should have data
behind them. This involves leveraging analytics,
machine learning, and other datadriven
technologies to extract insights,
identify trends, and uncover opportunities
for optimization and innovation.
A successful digital strategy prioritizes
building organizational capabilities
and fostering a digital culture. It involves
ensuring the necessary talent, skills, and
resources are in place to drive digital
initiatives. It also promotes a culture of
innovation, collaboration, and continuous
learning, encouraging employees to embrace
digital transformation.
Lastly, an effective digital strategy incorporates
mechanisms for measuring
and monitoring before and after performance.
It establishes key performance
indicators (KPIs) aligned with strategic
goals and regularly assesses progress.
It should also include considerations for
security and risk management assessments.
These hallmarks collectively contribute
to a well-rounded digital strategy
that positions an organization for success.
Taking the Next Step
Technology is constantly changing, and
to keep up, power companies must
change too. Incorporating innovative
new digital technology into all aspects
of a business will improve a company's
bottom line. Even before a decision is
made to add a new asset to a company's
portfolio, technology can be used to
evaluate options and provide insight on
the best path forward. Digital solutions
are available to enhance the planning,
designing, and executing of projects.
Once visions become reality, other solutions
can improve operations, maintenance,
and security. Throughout the full
asset lifecycle, technology is the key to
peak performance. ■
-Aaron Larson is POWER's
executive editor.
29
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pwr_february-2024

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