Helping others make sense of the ‘now’ and be future ready is important to us at Aurecon. So important that we set out on one of our most intensive market research journeys yet – Our Digital Futures. Recently Aurecon released the first wave of results – The Digital Landscape.
In this article, Arjun Narang, Global Head of Asset Management at Aurecon, tackles some of the challenges asset managers face and how utilising digital in a strategic and connected way is necessary.
With the ever evolving and often complex digital landscape, many asset managers are grappling with how to get value from emerging digital technologies.
Recent research reveals that some have not yet started their digital journey, while others have dived in but lost their way – investing time and resources without tangible results. Some though, are successfully embracing digital, demonstrating that the possibilities are there for the taking. To achieve the maximum value on your digital journey, a broader, more strategic and more connected approach is needed. While thinking broadly about the sources of value, the risk of failure can be reduced by testing value hypothesis in an agile, iterative way rather than taking a big bang approach.
Asset owners often look through a narrow lens, leveraging digital technologies such as sensors, data and information management to help track and monitor single assets and ensure optimal performance of those assets on a limited scale.
Whilst one sensor helps from an operational perspective, a shift to a more strategic approach – applying these technologies to a greater number of similar assets right through their lifecycle – can inform decisions with much higher value around capital expenditure, return on investment, customers and future planning. And these decisions very often have a bigger impact economically, environmentally and socially.
Across the globe we are seeing examples where this strategic, connected approach is revealing insights that enable different kinds of questions to be asked, different answers to be found and higher value decisions to be made.
Those leading the way in water utility asset management are analysing data from water meters across an entire city, rather than in isolation. As other sensors are deployed to monitor usage, pressures and so on, asset owners are better informed of flow profile and what’s occurring in the pipe network at different times of the day or during different seasons. They understand how the entire network is performing and can more readily undertake left field analysis and qualitative investigation into unusual activity. Having this information across a suite of assets can be used to inform hydraulic models and to make better decisions around future investment in the pipe network.
For councils, a single sensor on a public BBQ can tell its owner when it is being used, how frequently it breaks down or when components need replacing. But when information is combined across all the BBQs being managed in a region or city, broader patterns emerge. Having this information informs future investment decisions – for example, in areas where BBQs aren’t used frequently, the choice may be to not replace them at all. In making these more informed investment decisions councils can more effectively choose where to prioritise limited resources.
It’s a similar story with waste collection of public bins. Connecting sensors across a network of public bins can allow for route optimisation rather than inefficient and sometimes unnecessary weekly collection. It could also lead to insights which inform fit for purpose council service provision. For example, in areas where bins fill up quickly, rather than weekly collection, deployment of larger bins on a more frequent basis might be more economically viable and resource efficient.
In the electricity market, while there is customer value in analysing data from just one home digital meter, far greater economic value can be achieved when data from multiple sensors is combined. It can reveal information about infrastructure on a broader scale around size, performance, maintenance and when combined with other external data provides insights into an endless array of areas such as network level vulnerabilities, identification of network losses, theft, and system underperformance.
These are just some of the possibilities where combining information across a suite of assets results in a shift from a little to a lot of value. Yet despite the benefits there are still many not realising the maximum value possible. Depending on where you sit on the digital curve, some struggle with choosing the right technology, others are waiting for this to mature and need hard evidence. Some have an unclear definition of what ‘digital’ means and others have no digital leadership within their organisations to drive this forward.
Understanding of risk is also a key factor. Asset owners are exposed to considerable risk – political, managerial, financial – due to the magnitude of investment in their assets. If the risks are high, sometimes it is pragmatic to wait. But if a sensible and strategic approach is taken to digitisation, the risks of playing with these technologies are incredibly low for the value that can be gained. Why wouldn’t you do it? Why would you wait? The consequences of waiting for others to take the lead will ultimately impact your competitive position in the market.
This doesn’t have to be all or nothing. You can play in this space at low cost. Start small, partner with a well-informed advisor, learn how to use the data and build from there. Leverage assets and systems you already have, connect them using digital technologies, and gain more valuable (and actionable) insights which can lead to improved efficiency, overcoming challenges and even generating new revenue. In the long run, everyone will go down this path and you have to be part of it to stay in the game.
The first wave of Our Digital Futures was released in July 2019. The research will be released over three waves as The Digital Landscape, The Future of Digital and Your Digital Strategy.
To learn more and read the full report for the first wave, visit ‘Our Digital Futures’ at Aurecon.
Arjun Narang is Aurecon's Global Head of Asset Management.
This article was originally published on LinkedIn Pulse as 'Asset owners and digitisation: 'you have to be part of it – and do it right – to stay in the game' by Arjun Narang.