How IT leaders in public utilities can prepare for an uncertain future. Provides a 5-step process to achieve business and IT alignment: (1) vignette-based strategy, (2) capability modeling, (3) program and project governance, (4) solution portfolio management, and (5) delivery framework. Authored by Kent Landrum.

1. Kent B. Landrum
September 20, 2016
Public Power Forward:
IT’s Role in the Changing Electric Utility

2. OUTLINE
§ Introduction
§ Preparing for an Uncertain Future State
§ Five Step Process
§ Key Takeaways
§ Questions & Discussion
2
Abstract
The electricity industry is going through significant change, forcing public power utilities to
rethink their traditional business model. Electric utilities of the future may operate more like
energy service providers, engaging in non-traditional activities to provide added value to
customers. Discover the critical role of IT for success in this new future.

3. INTRODUCTION
3
CPS Energy is the nation’s largest municipally owned energy
utility providing both natural gas and electric service. We
serve more than 786,000 electric customers and 339,000
natural gas customers in and around San Antonio, the
nation’s seventh largest city.
As VP & CIO, Kent Landrum is responsible for ensuring CPS
Energy's information technology infrastructure, business
applications, cyber security, governance processes and
solutions support the changing needs of the broader
enterprise in a safe, secure, reliable, sustainable, and
financially responsible manner.

4. PREPARING FOR UNCERTAINTY
4
IoT
BIG
DATA
Mobile
Cloud
Cybersecurity
Digitization
Transforming
while
Performing
Death Spiral
Analytics
Convergence In-memory
Interoperability
Regulation
Renewables
Distributed
Generation
Smart
City
Smart Home
Integration
Data Scientist
Microgrid
Net Metering
Time
of
Use
Omnichannel
The Right People, Doing the Right Things, the Right Way
Bimodal

5. FIVE STEP PROCESS
5
Vignette-
based
Strategy
Capability
Modeling
Program and
Project
Governance
Solution
Portfolio
Management
Delivery
Framework
1
2
3
4
5

6. ONE: VIGNETTE-BASED STRATEGY
6
Can you describe who you will
be as a utility on one slide?
Important Elements of a Vignette
ü Describes the regulatory, economic, and operating environment
ü Outlines the utility’s basic aims & assumptions
ü Determines a destination and sketches out a path forward
ü Highlights basic keys to success
Other Names: Scenario-based Planning, Scenario Thinking, Scenario Analysis

7. 7
“The Prepper”
View of the Environment
External change is accelerating and the utility has a healthy foundation built on
reliability, affordability, and innovation. The company aims to sustain customer
loyalty, continue organic growth, and increase the regulated rate of return.
Destination & Path Forward
Bring to market beyond-the-meter offerings that extend the business model in a way
that builds upon the existing brand. Expand the asset base to diversify generation
fleet while modernizing transmission and distribution networks to meet the changing
demands of the industry.
Keys to Success
§ Solid customer relationships
§ High regulatory acumen
§ Conservative innovation
§ Extensible IT/OT foundation
EXAMPLE
ONE: VIGNETTE-BASED STRATEGY

8. 8
What abilities will the
utility need in the
future?
Examples: APQC® as well as numerous consultancies offer models.
TWO: CAPABILITY MODELING
Important Elements of a Capability Framework
ü Start with an industry-specific or standard model and adapt
ü Functional (not organizational!) in structure
ü Describes what is done, not how
ü Considers people, process & technology

9. 9
TWO: CAPABILITY MODELING
EXAMPLE
Benefits
§ Common language
§ Standard models go to
the process-level
§ Ability to benchmark
§ Visualize maturity
§ Graphically depict
investments

10. 10
How will we prioritize
and initiate programs &
major projects?
Frameworks: PMI®, COBIT®, ITIL®, etc. are some well established examples.
THREE: PROGRAM GOVERNANCE
Important Elements of a Governance Framework
ü Centralized management of one or more project portfolios
ü Bridges the gap between strategy and execution
ü Contemplates the business value of the integrated portfolio
ü Evaluates elements of risk inherent in the combination of projects

11. 11
How do we align our
technology solutions to
business needs?
Tools: Born as APM in the 1990s, Gartner® offers a process and many tools exist.
FOUR: SOLUTION PORTFOLIO
Important Elements of Solution Portfolio Management
ü Comprehensive catalog of IT/OT solutions owned by the utility
ü Maps solutions to underlying business capabilities
ü Tier solutions based on solution use and rate of change
ü Identifies owners, lifecycle, utilization, cost, and other important
attributes for each solution
Tolerate Invest
Eliminate Migrate

12. 12
FOUR: SOLUTION PORTFOLIO
§ Systems of Innovation — Applications built to support new, innovative business activities and are constructed quickly and cheaply
to enable enterprises to experiment with new ideas (e.g., major changes occur every month, quarter, year)
§ Systems of Differentiation — Applications that support processes that are unique to the organization or its industry and are likely
to change quicker lest they commoditize (in which case they move down into systems of record; e.g., major changes in these
systems occur every one, three or five years).
§ Systems of Record — Applications that make up an organization's systems of record typically support core processes and
information that executives would like to be as stable and slow-changing as possible to drive leverage and consistency while
reducing cost and risk across the enterprise (e.g., major changes in these systems occur every five, 10 or 15 years).
EXAMPLE

13. 13
FIVE: DELIVERY FRAMEWORK
How should we go about
delivering and supporting
these solutions?
Core Concepts: Waterfall, IID, Agile/SCRUM, Bimodal IT, etc.
Important Elements in Selecting a Delivery Framework
ü Must be tied to overall IT General Controls scheme
ü Use common methodologies as a starting point
ü Not “one size fits all”
ü Consider corporate culture, work styles, and team knowledge

14. 14
FIVE: DELIVERY FRAMEWORK
§ Waterfall – Traditional structured delivery method of requirements, design, build, test…
§ IID – Iterative and Incremental Development
§ Agile – Iterative, adaptive, evolutionary, collaborative, cross-functional
§ Citizen Development – Users who creates new business applications for consumption by others
using development and runtime environments sanctioned by corporate IT
EXAMPLE

15. 15
KEY TAKEAWAYS
Five Step Process Answers the Following Questions:
1. Who will we be as a utility in the future?
2. What business capabilities will we need to introduce or enhance to
succeed?
3. What combination of programs and projects will be necessary to
support these abilities?
4. Which technologies do we have or will we need to acquire in order
to enable these initiatives?
5. How should we go about delivering and supporting these
solutions?
Confirm Alignment at Each Step

16. 16
QUESTIONS & DISCUSSION