IT/OT convergence: what does this look like for the modern day utility?

IT/OT convergence provides a common technological ground for the two domains to work together, write Adarsh Krishnan and Eugenio Pasqua.
Published: Tue 31 May 2016

IT/OT convergence indicates the integration of information technology systems used to manage business operations and information, i.e. ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), SCM (Supply Chain Management), or EAM (Enterprise Asset Management) with the operational technology used to perform actual operations and support physical value creation. A typical example of OT are SCADA systems used to monitor industrial plants and/ or electrical distribution systems.

Traditionally these two domains do not overlap and have been managed as separate entities. The IT systems used to manage the high-level business operations and the OT systems the production domain. Due to the use of non-interoperable technologies and standards, the data they produced remained confined inside closed organisational silos and could not easily be shared with each other, unless an expensive customisation process to integrate them was performed. IT/OT convergence basically means solving these interoperability issues by providing a common technological ground over which the two domains can effortlessly exchange data and work together. The IoT as a concept envisions the use of open and interoperable standards to facilitate the exchange of data both “horizontally” (between machines and devices – even from different vendors and technologies) and “vertically” (from machines to high level management systems and vice versa). This translates into the creation of a single unified network infrastructure based on open communication protocols and standard data models so that the machine generated data can be liberated from these silos and shared with the higher level management systems.

Benefits of IT/OT convergence

Cost benefits

The use of open and interoperable standard technologies – as opposed to vendor-specific, proprietary technologies – reduces the Total Cost of Ownership (TCO). Traditional solutions based on vendor-specific and proprietary technologies often limit the selection of the hardware and software required by monitoring, control, and automation solutions to a restricted group of manufacturers, and concentrates more on their degree of compatibility with each other rather than the best quality-price ratio. In addition, these solutions often involve an expensive customisation process to integrate the different components (both hardware and software). On the other hand, through the use of open and interoperable standards the development and implementation of industrial solutions becomes faster and easier, widening the range of selectable vendors and reducing the overall costs of the solution.

Operational benefits

By facilitating the access to production and equipment status data at the higher management levels, industrial organisations can use this information to improve the performance and the productivity of their assets (both in terms of machines and personnel) while making a more efficient use of resources and thus cutting down energy consumption and waste. In addition, by using the equipment more efficiently, its life duration can be increased while reducing the risk of failures. Also, maintenance can be further improved thanks to faster responsiveness to failures and even by planning maintenance and corrective actions before a failure may take place.

Strategic benefits

With a full IT/OT integration, industrial organisations have the means to have a complete view of what’s happening on the factory floor in real time, and this allows for a number of strategic benefits. In a fully integrated industrial infrastructure, the information is managed in such a way that the right information is delivered to the right person at the right time and in the right format, enabling a better and more informed decision making. This wealth of information and higher insight on the organisational processes enables better collaboration between the different levels of the organisation and an optimisation of the management of the whole supply chain, from product design and engineering to the after sales services.

Challenges of IT/OT convergence

Modernisation of legacy infrastructure

The first and probably the major challenge that industrial operators and organisations have to face in the process of modernisation of their industrial facilities is how to take advantage of the emerging technologies while protecting the considerable investments they have already made in their existing infrastructures. Industrial facilities are populated with legacy equipment and networking cabling that does not support Ethernet and IP-based networking, and any approach based on a wholesale replacement of these old legacy assets can’t be expected to be welcomed by the industry as it would require extensive capital investments in the new infrastructure while at the same time abandoning the old infrastructure in which investments had already been made. Secondly, an extended downtime due to the shutdown of the machine during the replacing operations would mean a consistent loss of revenue; in addition to the high technical risks associated with the execution of the project as well as the changes in policies and procedures, which would require additional training of the workforce.

Security issues

Apart from the involved costs, among the main reasons industrial organisations are skeptical about opening their industrial networks are security and privacy issues. With the ever-growing threat of security breaches, industrial organisations need to make sure their industrial plants are inviolable, since the consequences of any failure could be severe. Having industrial equipment somehow accessible from the Internet poses a high security risk, and the security mechanisms of current technologies don’t yet inspire the trust necessary to enable a wide adoption of these new technologies. In addition, industrial organisations have always been kind of jealous of their data, and they are not really comfortable with the idea that their data could be accessed by malicious users. Proper security mechanisms thus must be provided and proven to allow quicker adoption of the IIoT concept.

Lack of the necessary interoperability

Industrial environments are populated by a heterogeneous number of devices and communication protocols, whose diversity either prevents or limits their ability to connect and interoperate. Although there are some methods available to facilitate this interoperability, such as the use of protocol translating gateways or the Open Platform Communications (OPC) standard, these are often limited and expensive, and do not often provide high flexibility. The industry still lacks a common framework or platform based on flexible and open communication protocols and data models on which any industrial device and network should be built in order to provide the truly universal interoperability that is envisioned by the IIoT concept, along with the requisite security and reliability. Recently a number of initiatives like the Open Interconnect Consortium (OIC) and Industrial Internet Consortium (IIC) have been formed to work toward that objective, but they are still at an early phase and as such it is difficult to predict if and when such a framework would become a reality.

Cultural difference between IT and OT groups

One aspect that is often not taken into consideration lies in the functional and operational differences between the existing IT and OT groups that could potentially complicate the IT-OT convergence process. IT and OT organisations within an enterprise have a different cultural basis, and the way each group perceives a project or a solution is strictly dependent on its background. The IT-OT convergence at the base of the IIoT must then take into account these differences and plan a reorganisation of the IT and OT units under a common structure.

Join the IT/OT debate, check out our IoT In Focus series for insights from EDP, Intel, Advantech, S&C Electric, Alliander, Advantech, Duke Energy, National Grid, Schneider Electric, Space Time Insight and more

Utility-specific considerations

The challenges mentioned above are also applicable to utilities but in addition, the process of integrating existing IT systems such as billing management, CRM or ERP with utility OT systems can be time and labour intensive. Clear understanding of the long term value, integrating legacy systems, and slow return on ROI are some of the key concerns for utilities that implement such programmes. It’s important for utilities to clearly define the short, medium and long-term goals of its grid modernisation plans and subsequently have a plan for phased implementation over time. This has multiple advantages as it not only minimises disruption but also facilitates sufficient time to implement the change management programmes for seamless transition. Energy utilities are still in the initial stages of a grid modernisation that started with the deployment of smart meters. The integration of the different IT and OT components will be a continuous process as utilities expand their capabilities to include applications such as demand response, battery energy storage systems (BESS), distributed energy resource systems and electric vehicle charging systems.

Adarsh Krishnan is senior analyst and Eugenio Pasqua is research analyst for ABI Research’s IoE, Enterprise & M2M practice.

This article first appeared in Metering & Smart Energy International, Issue 6, 2015.

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