Bringing new sources of energy to life at National Grid

With solar, wind, and hydro, the number of energy sources that make up National Grid’s supply chain is growing. Developing frictionless processes to bring energy to customers safely, faster, and easier is a key part of the company’s digital strategy. Andi Karaboutis, chief information and digital officer, discusses that strategy and advises CIOs “not to forsake the future while they are fixing the past.”

Martha Heller: What does “digital” mean to National Grid?

Andi Karaboutis: At National Grid, digital is all about replacing the physical actions or insights with virtual or digital capabilities leveraging technology. We envision a digital journey similar to that of Uber and Netflix – companies that have replaced a highly manual set of activities with a process that reduces steps or friction and increases speed. Digital offers more transparency of our utility services to our customers.

Thinking through everything we do to bring energy to life for our customers and leveraging digital technologies for improvements is what we think about every day as our “digital journey.” For example, across the US and EU, new sources of energy are being developed. How do we connect to these new sources and provide that energy at the best rate possible?

What are some programs that exemplify “digital”?

Today, energy can originate from solar panels, wind farms, gas, and hydro-power, so the variety and number of sources is growing. In the UK, we went from 250 sources of energy for transmission to more than 3,000. More people are running solar panels and wind farms. While National Grid does not own those sources, we do own the opportunity to connect and transmit that energy from the sources to our customers –whether they are the houses and buildings we transmit and distribute to in Massachusetts, Rhode Island, and New York or the distribution companies we transmit to across the UK.

National Grid

In the UK, we took a number of manual processes and developed a digital process. Today, people operating solar or wind energy farms can apply through a National Grid portal, which uses algorithms to evaluate the energy sources and bring them into our system. It used to take four years for us to bring one new source on board; today, we have cut the onboarding time down to one year. 

We are also using machine learning and artificial intelligence to do solar forecasting so that we can read weather patterns to forecast where our sources of energy will come from in the future. Buying energy is like buying airline tickets. If we buy last minute, we pay more. GIS technologies forecast where to get our energy from, enabling us to buy sooner and pay less.

How have your organized for your digital transformation?

When we started out on our digital transformation, we looked at three different models:

• Building a big centralized team for digital and data; that team could drive the digital strategy and the execution of digital and data projects.
• Decentralizing the transformation by giving responsibility for digital and data to each business unit and allowing them to set the strategy, priorities and not leverage re-use of centers of excellence.
• Develop a comprehensive hub-and-spoke model where the center develops an enterprise strategy for digital, but the unique business units prioritize, sequence and deliver – leveraging core centers of excellence for data, technology, and development reuse – to execute their programs.

At National Grid, we recognized that the hub-and-spoke model is the best for us:  centralized strategy with regional autonomy capitalizing on reuse. This helps us deliver on our commitments for the future. Additionally, we have partnered with BCG Digital Ventures to help us develop our pipeline of digital initiatives through a process called “hack-a-future.” 

The CEO, our board, my peers on the executive leadership team, and I have set the “north star strategy” and our BHAG’s (Big Hairy Audacious Goals). We’ve defined strategies for each area with small digital enablement projects. For data, our central group focuses on architecture, reuse, and stewardship, and we have data scientists dispersed throughout the company. They are reusing algorithms defined locally or by our centralized team, so that avoids duplication of efforts.

How is the executive leadership team communicating the vision for digital?

For us, the vision starts at the top of the house. During quality business reviews, our board and CEO ask the business unit leaders where they are with their digital strategies, and our CEO regularly communicates about the importance of our digital journey. 

For so long, we have been a culture of safety and security because we are a critical part of our national infrastructure. Today, we are adding to that culture with a mindset of digital innovation.

Two key factors are setting the stage. One, our CEO champions digital and advocates cascading stories of why it matters for all employees. Two, we are thoughtful about the language we use. We rarely talk about automation as an IT project. If the automation is removing friction and creating value for our customers, then we talk about it as a digital initiative.

We recognize the need to keep the digital journey conversation alive and to repeat messages often. We are intent that employees at every level of the organization get excited about this major strategy.

What advice do you have for CIOs embarking on a digital transformation?

If there is one message I would give to CIOs, it is this: Executives flock to new technologies. “Let’s use blockchain, let’s use these visual or augmented reality tools.”  But it is really about building digital capabilities that have been informed by data and insights. Before worrying about what tech tools to use, think about problems that can be solved, what new capabilities can be brought to bear, and what technologies can enable or spur these capabilities to create customer and shareholder value.

Further, some CIOs often think they have to get the master data right first, develop a data lake, and appoint data stewards before they can leverage the data. Yes, you need a data strategy and all of the aforementioned is important. However, you can start to get insights before you have your entire data architecture in place. Start leveraging data right away, from wherever you can find it, and as long as you have good people who can leverage that data, you will deliver insights and value while you are fixing the rest.

What do CEOs leading digital transformation need to know?

CEOs need to know that regardless of how successful they have been in growing their companies, they are not exempt from disruption. CEOs cannot delegate digital with an honorable mention of it in the annual report. They must drive digital as a company strategy. They should ask for report outs: Where are we on our digital strategy or journey? How are our programs and pilots going? What are our digital assets? Who is our digital talent? What value have we delivered? What’s in our pipeline? For digital transformation truly to succeed, CEOs have to own the digital agenda.

About Andi Karaboutis

Andi Karaboutis has been group chief information and digital officer with National Grid since she joined the company in 2017. Previously, she was executive vice president of technology, business solutions & corporate affairs for Biogen, as well as vice president & global CIO with Dell prior to that. She holds a BS in computer science from Wayne State University. Karaboutis is also on the board of directors for Advance Auto Parts, and Perrigo plc. She was formerly on the board of Blue Cross Blue Shield Massachusetts and a board observer for Cylance.