April 19th, 2017
Energy and utility companies are striving for cloud-first modernization and dramatic business transformation as large-scale changes disrupt these industries.
Tata Consultancy Services (TCS), one of the technology industry’s leading global systems integrators and a Dell Boomi partner, is playing a pivotal role in helping some of the world’s most established and progressive energy and utility companies meet their critical technology challenges.
According to TCS, energy and utility companies need to be able to rapidly connect their applications and data and easily manage those integrations. Such agility in integration is core to the successful implementation of a cloud-first infrastructure, says Supratik Chaudhuri, the head of digital services for utilities at TCS.
We sat down with Chaudhuri to discuss the role that data and application integration plays in the energy and utility industries. We also explore why integration platform as a service (iPaaS) technology has emerged as a critical requirement for driving a true cloud-first technology architecture.
Q: Let’s start with the state of the industry. What are the key business trends and objectives for energy and utility companies, and what challenges do they face?
A: The industry is going through a period of intense disruption with several big factors in play. One is the consumerization of energy technology and the need for providers to become more customer-centric and forge new channels of engagement. Companies also need more speed and agility to react to regulatory changes, and supply and demand changes. They have the opportunity to leverage new technologies like the Internet or Things, more sophisticated smart grids and smart homes, or even blockchain.
There’s also a blurring of industry boundaries and lower barriers to entry. That can mean opportunities, but it can also mean a new competitor invading a company’s traditional space, which raises the stakes for holding or improving market share. Taken as a whole, these factors are challenging the traditional volume-based business model of energy delivery.
Utilities need more than digitization of processes. There’s a need to re-imagine business as the basic value chain is disrupted. There are lots of opportunities to create more value around customer through new products, services, and partnerships. In the utilities sector, today’s empowered customers expect innovative and personalized service offerings from providers, just like they get from retailers and banks.
Other factors such as regulations and smart networks are reshaping the industry to be more focused on the customer with personalized, or non-commoditized, engagement. That’s driving companies to adopt technologies that help them provide contextual and/or bundled services. Even in regulated markets, utilities that are able to provide a more holistic and predictive service have higher customer satisfaction.
Many utilities are transforming the way they’ve traditionally worked to face these new challenges. Others continue to struggle as organizational inertia, antiquated technology, and outdated processes hold them back.
Q: What role does integration play in efforts to improve business performance and transform operations in energy and utilities?
A: Utilities have traditionally relied on standard on-premise platforms like SAP IS-Utilities, along with executive information systems, GIS mapping, CRM, work and asset management, and data warehouses for reporting. But like many industries, energy is under pressure to reduce costs and modernize IT infrastructure. There’s a big uptake of cloud platforms and applications. There’s growth in hybrid IT that combines cloud and on-premise systems.
CIOs in the industry are well aware of the importance of seamless and timely exchange of data. On-demand access to data very quickly is vital. That’s especially important as utilities try to move customers into low-cost, self-service channels like web, mobile, social and interactive voice systems and away from high-cost contact centers.
So in this changing industry, an integration platform needs the flexibility to handle a wide variety of data types. It’s got to be able to scale to varying volumes of information in very complex IT environments. Data complexity and data volumes are both increasing rapidly, and integration has got to be able to handle that.
It’s fair to say that the need for integration is really greater than ever. That’s prompting a lot of energy and utility companies to rethink their integration strategies and technologies.
Q: Energy and utility companies have used integration technology for well over a decade and many have several integration platforms in place. What’s different now?
A: The fundamental issue is that the legacy on-premise integration stack is preventing rapid innovation and an embrace of the cloud model. For instance, complex integration scenarios connecting on-premise and SaaS applications require large development programs that are very costly. As organizations work to modernize, legacy integration isn‘t scalable or cost-effective. Custom development is needed for any new integration.
As you note, many energy and utility companies rely on multiple integration platforms for ETL, ESB and other functions across various geographies and lines of business. That means high CAPEX costs to license the various platforms. Besides high costs, lack of standardization among various integration solutions hurts operational efficiency and causes persistent data transformation issues.
And there are high operational costs for a support team to maintain and troubleshoot aging integration software. If you’ve got several platforms, you need different skill sets, and that means costly overhead. IT has to struggle with complex vendor management scenarios in times of business-critical issue resolution.
Bottom line, continuing to rely on the legacy integration stack and trying to manage integration silos impacts the ability to innovate, at the worst possible time — exactly when the business is demanding it.
Q: Let’s talk about iPaaS. Is iPaaS a viable integration option for energy and utilities?
A: It absolutely is. The industry recognizes that the future is “cloud-first.” That doesn’t mean just moving business platforms and applications to the cloud. It also means taking advantage of a more agile cloud-based integration model to address many of the challenges we’ve discussed.
iPaaS provides an easy mechanism to connect diverse applications in the cloud and integrate more varied sources of data to gain deeper insights. It’s faster and more flexible than legacy integration. But at the same time, it provides the enterprise-class scalability the industry needs. It’s also cost-friendly and better suited to emerging needs across the industry. One example is exposing and consuming data in API form to enable a microservices-based architecture.
Another example is better flexibility with iPaaS to take advantage of newer technologies like IoT and grid sensors. Or if a utility is looking to better understand and engage with customers by using social media data, iPaaS is an ideal fit for that. The growing trend of mergers and acquisitions means that utilities need to integrate faster and more easily with an acquired entity. Those are all sweet spots for iPaaS, but impractical for legacy integration.
Q: What can you tell us about how TCS engages with energy and utility companies and helps them modernize their IT infrastructure.
A: We stay in close contact with IT and business leadership at our existing customers and our prospects. We are constantly searching for solutions to solve their issues. This includes advising on industry trends and experiences from other utilities and industries. We routinely run proofs-of-concept projects and provide proactive problem resolution and innovation proposals using our various centers of excellence and partner networks. Then we help them make the changes and build the IT infrastructure to meet their most critical business needs.
Q: TCS partners with Boomi to offer and implement our iPaaS technology for energy and utilities customers, as well as other industries. Why?
A: Boomi leads the iPaaS market for good reason. Feature-wise, Boomi is one of the best in the market with plug-ins available out of the box and many functionalities built in. For example, capabilities for ETL and master data management that are critical for any integration platform. Boomi’s pre-built connectors to best-of-breed SaaS, PaaS and on-premise systems can be configured pretty simply. That makes it faster and easier for developers to build and deploy and integrations.
Boomi provides a lightweight footprint and flexible deployment, so a company might run integrations in the cloud on a local server. It all depends on business needs or preference if they want to keep information behind a firewall. The centralized interface to build, deploy and manage integrations is very intuitive and comprehensive, with built-in versioning and monitoring features.
I’d also mention Boomi’s automatic updates and the new features that come along with those updates. Customers always have the latest capabilities at their disposal without all the time and cost that can go into upgrading a legacy system. When you consider Boomi also delivers enterprise-grade security and a true multi-tenant cloud architecture, it becomes a very compelling option for energy and utility companies.
Q: You’ve talked about some of the capabilities in Boomi. What does that boil down to in terms of benefits to energy and utility companies?
A: In our experience implementing and using Boomi, it really boils to four characteristics. For one, the platform is cost-effective and offers a lower TCO for integration. The flexibility for integration in a hybrid environment is very important for data transfer across multiple cloud and on-premise platforms. The scalability is very strong as well, handling peak traffic and high-volume data without failure or a choke-point.
And finally, Boomi’s adaptability to accommodate a variety of platforms, from legacy to newer technologies, like big data, mobile, and IoT. That’s even more important as utilities move towards those emerging systems.
Q: TCS has used Boomi for integration at a number of energy and utility companies. Can you share any highlights of those implementations?
A: We have a utilities customer in the U.K. that uses a range of on-premise and cloud systems. They have Microsoft Dynamics, Salesforce, NetSuite, SAP SuccessFactors, Oracle Taleo and others. So it’s a quite diverse environment with an acute need for interoperability across those systems.
Their legacy integration environment was even more complex. They had six separate integration tools handling more than 7,000 integration flows.
They were already dealing with operational issues and high maintenance costs, and they knew their legacy integration systems couldn’t align with their cloud-first and mobile strategy. TCS used Boomi to integrate SaaS applications and existing legacy systems, including in B2B scenarios.
The results were remarkable. The customer saved 33 percent in operational expenditures and improved their time to market by 25 percent. But that’s just the start — they’re queued up to tackle a vast portfolio of more than 50 projects over the next three to five years. They’ve got flexibility and scale that just wasn’t possible with their previous approach to integration.
TCS also worked with a global utility headquartered in France that had similar challenges. They wanted to migrate services to the Amazon Web Services public cloud, and integrate SaaS applications like Salesforce, Coupa and Google Apps in the existing IT landscape, including SAP. Their existing integration platform was inconsistent and error-prone and didn’t support real-time integration.
Again, Boomi provided an ideal solution. The client gained real-time expense management and procurement capabilities, with huge benefits to financial reporting, accounts payable, and indirect expenses reporting. Going forward with other projects in the pipeline, this client has a lean and future-proof integration platform. Boomi is playing a pivotal in this client’s transformation into a more agile and cloud-first company.
Learn more about Tata Consultancy Services and their offerings for energy and utility companies.
To explore how Boomi can help your organization address its critical integration needs, please contact the Boomi global office in your region.