San Diego Gas & Electric has taken an aggressive approach to its digital transformation due in part to forces beyond its control—climate change, the pandemic and geopolitical tensions—altering its entire way of doing business.
Known for its innovative drone imagery application that helped track West Coast wildfire, the San Diego utility began its migration to the cloud a little more than two years ago—just before the pandemic and escalation in cyberattacks—and just as Ben Gordon took the helm as senior vice president, chief information officer, and chief digital officer at Sempra, the parent company of SDG&E and SoCalGas.
Today, 30% of SDG&E’s applications are on the cloud and Gordon predicts that will jump to 65% by 2025.
Utilities have not traditionally been early adopters of digital technologies, but the energy transition and global upheaval of the pandemic and other events have set the stage for a new operating environment. “The utility sector, which has been traditionally recognized for its business stability, reliability, and predictability is now facing a decade of deep redesign that pervades every aspect of the business,” says Ethan Louis Cohen, a Gartner analyst. “Regulatory frameworks and operating models are changing, requiring utilities to develop new ways of thinking, new business architecture, and technologies to enable new capabilities.”
Consequently, utilities like San Diego Gas & Electric are on the move, steadily migrating to the cloud, analytics, AI, and modernized computing environments, Cohen says.
SDG&E’s cloud-first transformation
Put simply, the cloud enables Gordon and his IT organization to do what was impossible with legacy systems.
SDG&E’s drone imaging program, for example, was a relatively speedy deployment that in the past may not have been a realistic project. “We have a large workforce, and we would have had to build out quite a large infrastructure. It would take us years to do that but [with the cloud] that only took us six to 12 months.”
The CIO says SDG&E’s “cloud first” initiative drives every aspect of its digital transformation.
“We see the cloud as a strategic advantage for the corporation. There is a lot of change in our industry, and we believe the cloud gives us access to new technologies and opportunities that we are trying to do ourselves,” Gordon says. “Every time you move to the cloud, there’s less overhead and less management of operations. The technologies and the speed at which we can iterate, and change are significant.”
“Management of data centers is a very complex thing. Being able to move it use the native tools that are built into the Amazon platform really increases our speed of delivery and our time to market for any kind of response,” Gordon adds.
SDG&E is taking a best of breed approach to the cloud and will use whatever platform best serves the utility’s needs as the cloud vendors evolve. “We try to be cognizant of the capabilities that each cloud provider brings and wherever their investment journeys are,” the CIO says.
Rebuilding for cloud
SDG&E’s digital transformation is not a technology refresh but a wholesale change in its business. That means every aspect of the business is under the microscope and being rebuilt for advanced applications and opportunities afforded by the cloud.
Gordon notes that analytics capabilities that would take SDG&E years to develop on its own are available through cloud—the product of significant R&D by major cloud service providers.
The utility is engaged in building a foundational data layer for the entire organization that is running in the cloud and has completed a business process automation overhaul of all its internal systems.
“All of our innovations and new emerging technologies are built on the data foundation that’s running in the cloud,” Gordon says, pointing to its community impact platform as one example. “That is a digital twin we’re using that leverages multiple data sources to kind of create an emission model for our fleet for service vehicles.”
IT, too, gets a cloud overhaul
It is anything but business as usual for Gordon and his team of 570 employees and about 1500 contractors as they continually create more machine learning and AI models, implement advanced analytics for SDG&E’s drone imaging and expanding fleet of sensors, build out its foundational data layer, finish off its digital twin, and develop virtual spaces for its emergency operations center.
“As part of this journey and transformation that we’re going through, we’re also transforming the organization as well,” Gordon says. “Last year, we pivoted to new ways of working. We adopted an organizational structure and architecture that enhances collaboration, the scaling of our technology services, and we revised our architecture for all technology roles to align with three career tracks.”
“We’ve also aligned all of our technology organization to products and platforms,” he adds.
These moves are aimed at ensuring SDG&E IT transforms at the same rate as the business, both in its technology and in its approach to innovation, as “increasing regulatory, market, and climate-driven risks are testing our business and systems resilience,” Gordon says.