Electrical utilities are sometimes tarred with the image of being bureaucratic and slow-moving, but the industry’s history says otherwise. In the 1930s, utilities led the way in laying the foundation for the electrical grid, even employing traveling teams to demonstrate the wonders of appliances. Power providers have been on the leading edge of alternative energy sources since the 1970s and are driving the current boom in solar and wind energy.
But the task of maintaining massive infrastructure and serving customers ranging from recent high school graduates to eighty-something retirees would tax the agility of any organization. At a time when intelligent devices and connected homes are about to effect massive change on the way people consume – and create – energy, it’s Mike Koehler’s job to move the IT strategy at $36 billion energy giant Exelon Corp. toward the future while still keeping the lights on.
Koehler, whose previous experience was almost entirely with technology companies, joined Exelon as CIO in 2016 because he saw a unique opportunity to influence the direction of an entire industry in the throes of change. “The utility as a monolithic thing of the past is not how it’s going to look going forward,” he says. The connected homes and businesses of the future environments will demand a highly configurable and adaptable IT layer to support devices that will be in constant communication with consumers, the utility and each other. Koehler calls it a “pervasive digital fabric.”
Driving disruptive change in a business that has historically prized predictability and reliability above all else is a constant challenge. Utilities have a fundamentally different perception of speed than technology professionals. “People here think about long-lived assets of 20, 30, 40 years hanging on telephone poles,” Koehler says. “That’s not an enduring factor in IT.”
Learning from Amazon
Neither is the outdated perception the customers are merely account numbers. Exelon’s recently overhauled website was built on the design and interaction principles that govern the world’s most successful e-commerce companies. “Our criteria was that it had to be as good or better than any retail or engagement website,” Koehler says. “Customers aren’t going to switch from Amazon to go back to a slow experience with the utility.”
Defining a clear vision is part of Koehler’s recipe for change. The IT organization is planning for the skills it will need over the next five years and putting training programs in place to help its current employees get there. IT is also embracing agile development principles like DevOps, but embedding the new breed of developers into the organization rather than setting them off on their own. “It’s an important message to employees that as our people work on new developments, they have our support,” he says.
The digital platform the company is building for the connected future will need to be “distributed by nature,” he says. “When you think about the needs of connected communities running solar farms, we have to plan for that.”
The company is placing big bets on mobility with the expectation the customers will increasingly want to provide for their own needs. “People coming out of college have no interest in speaking to someone on the phone,” Koehler says. “We have to be at least one step ahead of consumer choices as they change.”
Doing that is a bit like changing a flat tire on a moving car. Exelon is the product of dozens of acquisitions, which has created an IT environment that “has one of everything ever known to man,” Koehler laughs. The company is adopting a cloud-first strategy for new development, moving existing applications to the cloud where feasible but realizing that it will maintain on premises IT infrastructure for many years to come.”
A recent move to shift the company’s more than 33,000 employees over to Microsoft Office 365 is an example of Koehler’s philosophy of engaging with partners to take on functions that aren’t strategic to the IT plan. “I’m now out of the mail business, the print business and the videoconferencing business,” he says. “There were questions about whether we could make that transition, but we did.”
The IT organization of the future “will no longer have all the facilities and skills to work in isolation,” he asserts. “We need to bring third parties into the ecosystem and have them participate as standing members of the business, even if their badges may not all be from the same company.”
That’s the kind of innovative attitude that made utilities like Exelon indispensable institutions in the first place.