There's been a great deal of interest in the use of offshoring. Last year, the main focus was on labour arbitrage, ensuring that the same business functions could be done for lower prices in a different geography.
Utility businesses and asset management
- The UK utility market has undergone constant change since the privatisation process first started in the mid 1980s. Throughout the time since, there has been huge pressure on individual utility companies to provide better and cheaper services to customers whilst satisfying shareholders and regulators. Better asset management has become a key competitive tool.
- Utilities have always held information about their assets, but traditionally this has been held in different parts of the business and not integrated into a single coherent system. Good asset management is increasingly about being able to feed information from business processes across the whole company into the asset management system and then use information from that system to improve financial and operational performance
- Better asset management can deliver tangible benefits to the bottom line. Six figure savings in operational expenditure have been delivered and rapid returns on investments have been made across a variety of utility companies and functions. Customer service has been improved, thus reducing the risk of regulatory intervention and improving the image and reputation of the organisation.
- Key business processes which need to feed into, and take information from, the asset management system include customer service, scheduled maintenance and emergency repair. Making sure that accurate information about assets is available and can be used means that operation efficiency can be maximised and customer service improved. New technologies such as mobility and geographic information systems mean that more information can be made availably in a more accurate and timely manner.
- Many of the most important utility assets are linear ones: pipes, cables, sewers etc. These present particular challenges for any asset management system: individual elements can be hard to identify, data needs to be presented in different forms for different purposes and they are vital to the delivery of most utility services. Any asset management system for utility companies must be able to manage linear assets in a comprehensive manner
- Good information technology (IT) is essential to underpin good asset management. A greenfield project is a rare thing, so the IT infrastructure underpinning asset management must be able to take information from legacy systems as well as integrate with new applications such as mobility and geographic information. Such projects can be expensive to implement, and may involve changes to business processes, but the long-term benefit of efficient asset management will be big improvements to business performance
- Many utility companies have the IT skills needed to manage their legacy systems, but not necessarily those to develop the business processes needed, implement new asset management systems and integrate these, so they turn to 3rd party system integrators who do. The manpower costs of the systems integrators are the major component of such projects
- Systems integrators with off-shore operations are increasingly being selected by UK utilities to implement asset management systems. Their costs for off-shore and on-site manpower are much lower and they will be able to make cost effective reuse of skilled staff that have experience in both the relevant software and the industry sector, often gained outside the UK. As well as off-shoring the IT developments, business processes are also beginning to be off-shored, but this is a development which requires careful thought and planning, particularly in making sure that processes are fit for purpose before being off-shored.