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The AMR
Industry is unlike most others because it spans several types of
utilities (electric, gas, and water) and requires multi-disciplinary
skills (e.g., metering, communications, engineering, public relations,
etc.). Each utility customer is unique and the most basic tools
often require customization when installed. System integration
can become a challenge, even when both the vendor and utility assign
their most knowledgeable employees to the task. Add to this mix
the wide variety of needs by the utility's customers and the variety
of terrain, weather, population density and local values. It is
not a surprise that no AMR vendor fully serves the entire marketplace,
which explains why even the largest vendors are building partnering
relationships with companies that were their former competitors.
The primary
challenge to a vendor is to define its role in this marketplace.
Vendors perform the following functions:
installer, system integrator, distributor, equipment designer,
manufacturer, marketing company, consultant, service provider
(insurance, financing, legal), etc. The largest vendors perform
all of these functions and more; the smaller vendors specialize on
more limited skill sets. Similarly, vendors often target
customers that need the vendor's specific expertise.
Over the past
several years, most AMR vendors have modified their list of targeted
customers and changed the services they offer. Further
modification is inevitable as the AMR industry goes through yet
another evolution. The Year 2000 will bring a new round of
changes as the Y2K bug disappears and deregulation is better
understood. Utilities that had good reasons to delay decisions
will see those reasons disappear, and AMR market growth is
inevitable. The vendors must prepare themselves for volume
increases and greater demand on their resources. After years of
market stagnation, the coming years of plenty will offer even greater
challenges. Fortunately, the same planning exercises apply to
the new market -- the vendor must fully understand it role in the
market and identify the products/services it can sell and the
type of customer it wants to sell them to.
Once a vendor
establishes its strategic and marketing plans, it must then be sure
that (1) it has the products that can meet those goals and (2) it can execute its
marketing plans. Both product evolution and market development
are on-going activities. Meeting the needs of customers usually
requires constant customer interaction that then feeds product
development, which must then be integrated into existing systems and
applications. The more capable a company becomes in meeting
the customers needs, the more opportunities develop to serve other
needs, which in turn drives product development. In the AMR
industry, product development always has both hardware and software
components, which must be integrated with each other and with customer
systems.
Cognyst Consulting
is uniquely qualified to work in this environment. We have worked on each aspect of the
strategic, market and technical development process discussed
above.
In recent
years, the Scott Reports have permitted Cognyst Consulting to
intimately understand the AMR marketplace. Contacts are already
in place with every vendor in the industry, and Cognyst Consulting has the ONLY database of all AMR projects in place. This
information, coupled with a detailed knowledge of utilities, permits Cognyst Consulting
to ascertain market trends that are otherwise not
observable. Without violating the non-disclosure agreements that
accompany the database, this information can be tailored to help a
vendor select the type of customer that best fits its capabilities and
where it wants to market its products. If partnerships are
appropriate, Cognyst Consulting has the contacts to initiate such
discussions. Thus, whether a vendor's needs are technical,
marketing or strategic, Cognyst Consulting can help it achieve its
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Utility Companies
AMR is more
than a technology, it changes the paradigm of how a utility conducts
its business. Most successful AMR installations carefully consider the
impact of AMR on the rest of the utility. The placing of AMR
impacts operations, finance, staffing, customer services and the
implementation of other hardware systems. A full-scale AMR
project touches every utility customer. AMR projects change
existing meter reading processes as well as meter replacements and
testing projects. Because it drives revenue collection, AMR can have a key impact on billing systems and will likely
trigger customer questions after the automated processing
begins. Historically, AMR has been justified by staff
reductions, so it will initiate the inevitable impacts on HR (ironically, most utilities tend to learn the
many other benefits of AMR
only after it is in place). AMR is so visible that it can improve customer
relations if implemented properly, but can also generate
negative customer reaction if mishandled. The timing of other projects must be carefully planned to ensure that
they do not interfere with the AMR roll-out, or vice versa.
As an example,
consider
the AMR data. Most AMR systems are capable of collecting much
more data than is gathered manually. So where does the
utility put the extra data? Most existing systems do not
have room in their databases for new data fields, and those that do can rarely keep so much of it.
AMR forces a utility to either change its software systems or throw away the data (or
the opportunity to collect it). Thus, the introduction of AMR can
impact billing systems, Customer Information Systems, utility-wide
data infrastructures and how other database systems interact with
each other.
If AMR can have
such an impact, (and other parts of a utility can face similar
challenges) then an AMR project must be carefully planned. Yet
the planning process is one of the least understood activities within
any utility. The usual solution is to hire an outside
consultant. Cognyst Consulting is one of the few consulting
firms that specializes in AMR.
The AMR
planning process begins with understanding (or helping define) the
synergy between AMR's role in the utility and the
utility's goals and objectives. This will require the support
and participation of senior corporate executives. Planning
efforts often incorporate an analysis of the financial benefits of AMR
and examine deregulation (if appropriate). After senior-level
review and buy-in, attention shifts to the operational aspects of the
project. Later in the process, senior-level managers will
receive feedback on the progress of the project and its ability to
achieve pre-set goals. One possible outcome of this process may
be a decision to NOT deploy AMR (though most utilities do not hire a consultant until after they have informally made a commitment to
AMR).
The planning
process follows a progression that is tailored to each utility's
needs. However, several topics are part of every AMR project,
including:
-
Planning
the transition to AMR in each part of the organization
-
Deciding
whether to use an outside provider for any part of the system
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Determining
the extent to which meters are retrofit or replaced
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Deciding
whether to use outside installers or do it in-house
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Selecting
the type of AMR to use
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Generating
the RFP (or several RFPs, depending on structure of project)
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Negotiating
with vendors
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Selecting
the vendor(s)
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Community
interaction
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Planning
and initiating the installation process
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Employee
training
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Software
system installation
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System
integration within the AMR project and then within the utility
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Project
evaluation
-
System
usage (including the "mining" of data to extract
secondary benefits)
As the Y2K bug
passes into history and utilities learn to deal with deregulation,
many of the barriers to AMR will disappear. Interest in AMR has
already been on the increase as utilities learn of its benefits.
The elimination of the Y2K barrier and reduced fear of deregulation
will likely increase this demand.
Cognyst Consulting
is uniquely qualified to work in this area because of its
broad experience and access to AMR industry data that is otherwise unavailable (see the discussion above in the section entitled "AMR
Vendors"). From AMR transition planning through data
mining, Cognyst Consulting is prepared to help each utility develop
an AMR deployment plan that uniquely fits its needs.
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