Beyond Crisis Management: Minimising the Impacts to Utilities and Recovering Quickly
As any great strategist will tell you: winning the war is one thing; winning the peace is another.
When it comes to global challenges such as the 2020 COVID-19 pandemic, power and utility companies are at the front of the curve in crisis management.
There’s not much they haven’t planned for in safety and reliability, although few could have predicted the scope of this crisis and the time it will take to resolve.
It’s these companies that can transform, re-balance and rebound quickly who will “win the peace”, when Covid-19 is over (or at least scaled back).
Just as NASA’s rapid innovation to return the Apollo 13 team to earth following an explosion, the Covid-19 crisis offers industry a step-forward moment. As NASA rewrote the procedures for powering up the command module in three days rather than three months to bring the astronauts home, businesses are re-writing their operating handbooks in response to the pandemic.
Analysing the COVID-19 response lessons effectively and re-defining business as usual will be all-important.
A recent KPMG survey of US power and utilities providers Plugged In: Perspectives from US utilities on potential Covid-19 impacts has found companies are juggling a range of challenges from increased cyber-crime to poor connectivity for the remote workforce.
In this sector while around 50 percent of corporate-level and enterprise-level functions can be performed remotely, only 10-25 percent of transmission and distribution functions can be performed off-site. For those who must report to work, there are additional safety and security measures in place and there are likely to be ongoing additional work health and safety regulations in future.
In Australia as elsewhere, power and utilities businesses are being affected by disrupted global supply chains, delaying projects and limiting access to additional devices and SIM cards needed for remote work.
Demand patterns have shifted as businesses and industry shuts down and household demand rises, and many expect that household consumption will not counterbalance the commercial and industrial decline. .
Certainly, businesses are adapting to a home-based workforce, endeavouring to maintain high standards of customer service and supply but there are ongoing challenges that require managers to think differently.
Mobile networks and the NBN have held up but are under strain and this is likely to be exacerbated with ongoing work and school closures, with implications both direct and indirect. For example, some European countries are already mandating limits on Netflix downloads, striking fear in the hearts of working parents about the prospect of entertaining kids during the school holidays.
And consider the offshore call centre model that has prevailed for so long. Call centres in the Philippines have been closed due to social distancing measures, forcing some businesses to onshore call centres and there are questions about what will happen to the globalised model in future.
Meantime, companies are also reconsidering supplier continuity for critical spares and parts manufactured overseas and site-specific labour and services for remote locations. There’s a need to determine access to critical equipment such as water infrastructure, system monitoring equipment, critical spares in network and generator businesses and international technical expertise.
There’s also a need to adjust workflows and find new governance measures for corporate services work to ensure productivity in the new work-from-home environment.
Having been reminded about what’s important through this pandemic, companies are re-assessing their priorities. The post-COVID-19 world will not be as it was before.
Scenario-planning is more important than ever and companies need to re-imagine possible futures to inform the strategic decisions that will lead to a desired future state – not just the default.
Overall, we are seeing our essential services clients thinking about their operations in three main horizons.
Right Now – Crisis Management
- Command centre
- Splitting into teams to reduce contagion
- Adopting remote work and necessary IT
- Identify key person risks
- Initial onshoring
- Cost analysis / financial modelling / initial cost out
Next month to ~ six months – Operations in a COVID-19 world
- Supply chain continuity and knock-on effects
- Productivity in teams
- New service delivery models on and offshore – call centres, processing, technology
- Manage liquidity
- Operations transformation
- Bolster cyber security
Next six months onwards – Recovery to a new BAU
- Sustainable cost take out
- Deal with the work backlog – technology, asset maintenance, capital
- Increased digitsation of processes
- New connected operating model
- Implement new business resilience and critical control measures
Scenarios are helping organisations to make effective trade-off decisions and with new AI and automation in the mix, simulations can be run to prescribe solutions rather than just predict.
By analysing past events and hypothesising future threats, organisations and government can identify strategic supplies at risk in major crises, and recognise when current internal risk capacities prove insufficient.
More detail on medium to long term can be found at our special COVID-19 page here