What's missing in Accenture's conclusions on the value of data analytics?

Published: Wed 18 Feb 2015
A blog entry by Anouk Montagne

Contributed by:

Anouk Montagne
VP Marketing
Energyworx

Anouk Montagne's Blog

Accenture published a report on the use of data analytics to improve grid reliability. Although data analytics within the energy sector is often related to the consumer end of the value chain, Energyworx fully agrees with Accenture in its believe ‘that utilities can move to a new frontier and achieve the same or greater (grid) reliability using less capital by changing the way they allocate capital using more granular data and insights about the network and statistical models that assess asset outcomes’.

The potential of data analytics in numbers

In the report, it says, ‘while the application of analytics is not yet mainstream, estimates of planned investments show that utilities are clearly recognising its potential. Pike Research estimates the compound annual growth in spending on analytics at 24.5 percent for the years 2012 to 2020, with a steady-state growth and total spending of more than $34 billion during this time period’.

Accenture’s analysis suggests the potential value of using smart grid analytics to transform operating results, at a conservative estimate, could approach $40 to $70 per electric meter per year.

But how about the ROI?

The extensive and well written report explains how the results of data analytics can be used for for example revenue protection, demand-response effectiveness or outage prevention and thereby increase operating results. Unlike many others, this report does not linger in vagueness when it comes to data analysis and offers clear directions for the application of data analytics within the sector.

However, what is lacking is the acknowledgement of the fact that not only the outcome of data analysis, but also the way in which the process of data analysis is being implemented within an organisation, has an important effect on the ROI as well.

Until now, utilities needed to invest massively in software, licenses and maintenance costs. Current SaaS solutions (that is, our solution!) enables utilities to pay per use and start analysing their data instantly. Avoiding costly implementation time and all the prior investments mentioned, plus the ability to scale up or down instantly (our platform is agile to your success) increases the return on investment. Actually, one could argue investments are negligible while similar or improved operating results are being achieved.

It’s the way you do it..

Therefore, our main critique, besides the many things we do agree to in this report, is that not only the analysis itself but also how you apply data analytics, is crucial for your ROI. We are currently working on a calculating mechanism that shows you exactly how much you can save not only by the insights from the analysis itself, but also by the way in which you are analysing your data.

 

Read the full report: Accenture-Grid-Analytics-Report-Digitally-Enabled-Grid

Main conclusions of the report are:

1. Analytics can radically improve decision making at every level.

2. Real insight comes from business intelligence and analytics that correlate data across the enterprise and externally.

3. New insights are possible by moving from business intelligence to comprehensive analytics to fundamentally manage business differently.

4. Achieving sustainable value from analytics requires new approaches to information management.

5. Changes to the operating model are required to enable benefit realisation from new insights.

6. Rapid learning improves models and increases value from insights

Source: http://www.accenture.com/us-en/Pages/insight-stats-utilities-big-data-analytics-high-priority.aspx?c=glb_acnemalert_10001684&n=emc_0115&emc=20730450:emc-021015