Utilities Industry Business Reference Architecture
Business capability maps, value streams, and strategy maps for the electricity, natural gas, water and wastewater utility industries.
- Utility leadership requires a unified and validated view of utility business capabilities that help CIOs and utility leadership accelerate the strategy design process and that align initiatives, investments, and strategy.
- The business and IT often focus on a project, ignoring the holistic impact and value of an overarching value stream and business capability view.
Our Advice
Critical Insight
Using an industry-specific reference architecture is central to organizational priorities and has many benefits. It’s critical to understanding, modeling, and communicating the operating environment and the direction of the organization, but more significantly, to enabling measurable top-line organizational outcomes and the unlocking of direct value.
Impact and Result
- Demonstrate the value of IT’s role in supporting your utility business capabilities while highlighting the importance of proper alignment between organizational and IT strategies.
- Apply Level 2 business reference architecture techniques such as strategy maps, value streams, and capability maps to design usable and accurate blueprints of your utility operations.
- Assess your initiatives and priorities to determine if you are investing in the right capabilities. Conduct capability assessments to identify opportunities and to prioritize projects.
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I really enjoyed my engagement with Jing. She is knowledgeable in both Utilities and Enterprise Architecture, a rare find. I am hoping to setup mon... Read More
Utilities Industry Business Reference Architecture
Business Capability Maps, Value Streams, and Strategy Maps for the Electricity, Natural Gas, Water and Wastewater Utility Industries
Analyst Perspective
In the age of disruption, IT must end misalignment and enable value realization.
Utility service providers require a unified and validated view of their business capabilities that aligns initiatives, investments, and strategy in order to provide value to their customers and stakeholders.
A utilities capability business map is a generic value chain, independent of any organizational structure and application system. It covers all core Level 1 and Level 2 utilities business capability components which follow the value chain of electricity, natural gas, water, and wastewater.
An industry reference architecture can be leveraged to effectively accelerate your strategic planning process and enhance IT's ability to align people, process, and technology with key business priorities. For example, it can be used for process design, operational analysis, application portfolio management, and performance management. It provides IT with an overarching business lens to strategize solutions to meet business needs.
Jing Wu
Principal Research Director, Utilities
Info-Tech Research Group
Executive Summary
Your Challenge
- You are a CIO, head of EA, or chief architect who needs to improve their organization's understanding of business capabilities and how IT can support the delivery of essential services.
- You work for an organization that wants to sharpen their alignment and focus on organizational outcomes and value by using automation and cost effective methods that produce the most reliable and high quality outcomes.
- Before executing any strategic initiatives, use this blueprint to understand how the organization creates value.
Common Obstacles
- You don't have a clear path for capturing the right information, engaging the right people, linking with the needs of the business and aligning with IT.
- The Business and IT often speak in their own languages without a wholistic and integrated view of mission, strategy, goals, objectives, business processes, projects and measures of success.
- The business and IT organizations often focus their attention within silos and miss the big picture need for a synergistic approach for successful outcomes.
Info-Tech's Approach
- Build your organization's capability map by defining the organizations value stream and validating the utilities industry reference architecture.
- Use business capabilities to define strategic focus by defining the organizations key capabilities and developing a prioritized strategy map
- Assess key capabilities for planning priorities through a review of business processes, information, application and technology support of key capabilities
- Adopt capability-based strategy planning by ongoing identification and road-mapping of capability gaps.
Info-Tech Insight
Utilizing an industry-specific reference architecture is central, and has many benefits, to organizational priorities. Its critical to understanding, modeling and communicating the operating environment and the direction of the organization but, more significantly, to enable measurable top-line organizational outcomes and the unlocking of direct value.
Industry Overview: Utilities
The utilities industry comprises infrastructures that generate, transmit, and distribute electric power; distribute natural gas; treat and distribute water; and operate wastewater treatment facilities. In addition to billing services, utilities often provide a omnichannel to engage customers and provide related customer services.
Utilities are highly regulated and mandated to provide safe, clean, and quality essential services. Depending on the sector and jurisdiction, utilities can be part of a government's integrated services or for-profit, investor-owned entities.
In recent years, unprecedented disruptions such as extreme weather patterns and a required commitment to reach net-zero have challenged utilities to set a clear path forward. In the face of changes, utilities will have to strengthen their critical infrastructure and expand digitalization capabilities to build business resilience.
Proven technologies such as Advanced Metering Infrastructure (AMI), Digital Twin, and advanced data analytics have provided business insights to improve operational excellence while enhancing customer experiences to prepare for the future of utilities.
Generation → Transmission and Distribution → Retail and Customer Services
Figure above: Value Stream for the Electricity and Natural Gas sector
Business Value Realization
Business value defines the success criteria of an organization as manifested through organizational goals and outcomes, and it is interpreted from four perspectives:
- Profit generation: The revenue generated from a business capability with a product that is enabled with modern technologies.
- Cost reduction: The cost reduction when performing business capabilities with a product that is enabled with modern technologies.
- Service enablement: The productivity and efficiency gains of internal business operations from products and capabilities enhanced with modern technologies.
- Customer and market reach: The improved reach and insights of the business in existing or new markets.
Business Value Matrix
Value, goals, and outcomes cannot be achieved without business capabilities
Break down business goals into strategic, achievable initiatives focused on specific value streams and business capabilities.
Electricity and natural gas business capability map
Business capability map defined…
In business architecture, the primary view of an organization is known as a business capability map.
A business capability defines what a business does to enable value creation, rather than how. Business capabilities:
- Represent stable business functions.
- Are unique and independent of each other.
- Typically will have a defined business outcome.
A business capability map provides details that help the business architecture practitioner direct attention to a specific area of the business for further assessment.
Glossary of key concepts
A business reference architecture consists of a set of models to provide clarity and actionable insight and value. Typical techniques and terms used in developing these models are:
| Term/Concept | Definition |
|---|---|
| Industry Value Chain | A high-level analysis of how the industry creates value for the consumer as an overall end-to-end process. |
| Business Capability Map | The primary visual representation of the organization's key capabilities. This model forms the basis of strategic planning discussions. |
| Industry Value Streams | The specific set of activities an industry player undertakes to create and capture value for and from the end consumer. |
| Strategic Objectives | A set of standard strategic objectives that most industry players will feature in their corporate plans. |
| Industry Strategy Map | A visualization of the alignment between the organization's strategic direction and its key capabilities. |
| Capability Assessments | Based on people, process, information, and technology, a heat-mapping effort that analyzes the strength of each key capability. |
| Capability | An ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve. |
Source: The Open Group, 2009
Tools and templates to compile and communicate your reference architecture work
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The Utilities Industry Business Reference Architecture Template is a place for you to collect all of the activity outputs and outcomes you've completed for use in next-steps. |
Download the Utilities Industry Business Reference Architecture Template
Info-Tech's methodology for reference architecture
| 1.Build your organization's capability map | 2.Use business capabilities to define strategic focus | 3.Assess key capabilities for planning priorities | 4.Adopt capability-based strategy planning | |
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Phase Steps |
1.1 Define the organizations value stream |
2.1 Define the organizations key capabilities |
3.1 Business process review |
4.1 Consolidate and prioritize capability gaps |
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Phase Outcomes |
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Info-Tech offers various levels of support to best suit your needs
DIY Toolkit
"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."
Guided Implementation
"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."
Workshop
"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."
Consulting
"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."
Diagnostics and consistent frameworks used throughout all four options
Guided Implementation
What does a typical GI on this topic look like?
| Phase 1 | Phase 2 | Phase 3 | Phase 4 | ||
|---|---|---|---|---|---|
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Call #1: Introduce Info-Tech's Industry reference architecture methodology. |
Call #2: Define and create value streams |
Call #4: Map value streams to business capabilities. |
Call #6: Create a strategy map |
Call #8: Review capability assessment map(s). |
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Call #3: Model Level 1 business capability maps. |
Call #5: Model Level 2 business capability maps. |
Call #7: Introduce Info-Tech's capability assessment framework. |
Call #9: Discuss and review prioritization of key capability gaps and plan next steps. |
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A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.
A typical GI is between 6 to 9 calls over the course of 1 to 4 months.
Phase 1
Build your organization's capability map
| Phase 1 | Phase 2 | Phase 3 | Phase 4 |
|---|---|---|---|
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1.1 Define the organization's value stream 1.2 Develop a business capability map |
2.1 Define the organization's key capabilities 2.2 Develop a strategy map |
3.1 Business process review 3.2 Information assessment 3.3 Technology opportunity assessment |
4.1 Consolidate and prioritize capability gaps |
Utilities Industry Reference Architecture
This phase will walk you through the following:
- Identifying and assemble key stakeholders
- Determining how the organization creates value
- Defining and validating value streams
- Determining which business capabilities support value streams
- Accelerating the process with an industry reference architecture
- Validating the business capability map
- Establishing Level 2 capability decomposition priorities
- Decomposing Level 2 capabilities
This phase involves the following participants:
- Enterprise/Business Architect
- Business Analysts
- Business Unit Leads
- CIO
- Departmental Executive and Senior Managers
About Info-Tech
Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.
We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.
What Is a Blueprint?
A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.
Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.
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Guided Implementation 1: Model
- Call 1: Introduce Info-Tech's industry business reference architecture methodology
- Call 2: Define and create value streams
- Call 3: Model Levels 1 and 2 business capability maps
- Call 4: Map value streams to business capabilities
- Call 5: Create a strategy map
Guided Implementation 2: Drive
- Call 1: Introduce Info-Tech's capability assessment framework
- Call 2: Review capability assessment map(s)
- Call 3: Discuss and review prioritization of key capability gaps and plan next steps
Contributors
Chepalsky, Chris - Sr Manager, Grid Transformation, EPCOR Utilitities Inc.
