The document discusses Smart Metering as a Service (SMaaS) and outlines its benefits for utilities. SMaaS involves outsourcing smart meter operations such as meter data collection, device management, and customer processes to reduce costs and complexity while improving service quality. The global SMaaS market is expected to grow 16-18% annually through 2018. Ericsson currently provides SMaaS for over 25 utilities in Northern Europe, managing over 2 million smart meters.
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Ericsson Smart Metering as a Service
1. SMaaS Launch | January 2016 | Page 1
Smart Metering as a
service
Pierre fitzgerald
Global Utility Lead, North America
2. SMaaS Launch | January 2016 | Page 2
Utilities
Public safety
Transport
Industries in transformation
Industry & Society
› Focus on industries that are
transforming using information
communication technology
› New business line established 2014
› Based on existing offerings
› Proven customer track record
65% of smart city investments in Utility,
Transport and Safety
3. SMaaS Launch | January 2016 | Page 3
CAGR 2015 – 2018: 16 – 18%
Market outlook
This slide contains forward-looking statements. Actual result may be materially different.
Smart metering, Smart grid communication
Grid control
Asset & Critical infrastructure management
Customer and Revenue management
ICT infra for road / rail
Transport transactions
Traffic management
Connected vehicle, connected vessel
First responder networks (PS-LTE)
Disaster and Emergency management
Critical Infrastructure protection
Strategic government networks
Addressable Market
32
35
BUSD
20142013
63
39
2015 2018
36%
8%
CAGR
’15-’18
I&S
Public Safety
Transport
Utilities
7%
4. SMaaS Launch | January 2016 | Page 4
A changing utilities arena
Integration of
renewables
Aging
infrastructure &
workforce
Sustainability
Consumer
experiences
New
technologies
Deregulated
markets,
increased
competition
5. SMaaS Launch | January 2016 | Page 5
What utilities need to do
Innovate for
better customer
experience
New eco-
systems and
business models
2 3
Utilize ICT as an
enabler
1
6. SMaaS Launch | January 2016 | Page 6
31,1% will have
some level of
third-party
management
by 2023*
Utilities can:
› Focus on core business
› Secure continuous improvement
in service quality
› Release capacity for innovation
* Navigant Research, “Smart Grid as a Service “, Q4 2014
7. SMaaS Launch | January 2016 | Page 7
Smart Metering As A Service
Specific service functions
IT & data functions
Communication management
E2E Business Process Outsourcing
Order to Service | Case to Resolve | Meter to Cash
8. SMaaS Launch | January 2016 | Page 8
E2E Business Process Outsourcing
DRIVE COST
EFFICIENCIES
Operational
efficiency
Reduced
complexity
Reduced
investments
BENEFITS BEYOND
COST
Improved quality
& user experience
Time to market &
differentiation
20% operative cost savings 60% reduced fault correction time
9. SMaaS Launch | January 2016 | Page 9
Energy utilities need a reliable way to
collect smart meter data: fast, efficient
and with small upfront investments. To
accomplish this, utilities are more and
more outsourcing smart meter
operations.
As prime, sub-prime or systems
integrator, Ericsson supplies, deploys
and manages smart metering systems
and operations as a managed service to
more than 25 energy utilities in Northern
Europe.
MASTERING
COMPLEXITY
SYNERGY
CIRCLE
LEVERAGING
SCALE
SUPERIOR
EXPERIENCE
Smart metering as a service
Northern Europe, 2 million meters for >25 customers
10. SMaaS Launch | January 2016 | Page 10
smart Metering as a Service
Customer operations in Northern Europe
SOLUTION
› Reliable meter data collection and
processing
› Metering devices management
› Dispatching, field services and
connectivity management
› Transparent governance and
change management process
RESULT
› Modernization leap
› Optimization of system
architecture and processes
› 20% reduced operational cost
› Secured evolution of the solution,
competence and regulatory
compliance
CHALLENGE
› Utilities need efficient smart
metering operations and fast
introduction of new services
› Large spread of legacy systems,
communication technologies and
meter vendors
› Operate multi utility smart meter
reading in wide geographical areas
Reliable and efficient metering
data operation
Efficient meter reading
operations
Outsourced business process
11. SMaaS Launch | January 2016 | Page 11
Our global utilities experience
>42
MILLION METERS
World’s
largest
First
4G (LTE) NETWORK FOR A
UTILITY DEPLOYED
GRID EDGE NODE DEPLOYMENT
Editor's Notes
Global Utility Lead, NA
Source for 65 %: Navigant smart city study Nov 2014
Cities often become a focal point of transformation
Challenges are present in a dense location, and they are economic centers of the world
Rapid urbanization
The world is rapidly moving into cities. Estimates tell us that by 2050, around 70% of the worlds population will live in cities compared to 50% by 2015. This puts enormous stress on the city infrastructure in everything from securing housing to making city functions cope.
Water quality & access, Utility/Energy access
Access to clean water in an efficient manner is crucial in any society. With increased strain and density in cities this will be a key challenge to address for city authorities. Many developing countries are experiences high rates of energy theft, and unreliable grids
Complex transport management
With a big rise of citizens, transport will change dramatically. There is a need to increase usage of public transport in many places so that we can share resources more efficiently, there is a need to prepare for autonomous driving as well as a need to understand the challenges of electrical vehicles.
Department in silos
Possibly the biggest challenge is to transform how a city is managed and run. Today most cities run their functional departments in silos where everyone does their own thing without systematic collaboration. To cope with upcoming challenges this needs to be changed. We can’t solve problems in isolation anymore but to create horizontal platforms on top of which every department contributes to every other department and work in unison to tackle the big challenges.
Notes to be added.
Access to electricity is a prerequisite for our society and a foundation for the future. The way we live today and will live tomorrow requires more and more electricity. At the same time, the climate effect from electricity consumption must be kept to a minimum.
Aging infrastructure and workforce in large parts of the grid
Drives a need for replacement and a change in how things are done process wise.
Nearly 70 % of utility leaders believe their organization will have workforce challenges because of employee retirements during the next five years. Source: Black & Veatch, 2014 Strategic Directions US Electric Industry
Integration of new & advancing technologies
New technologies open new opportunities for utilities and needs to be captured.
Societal pressure for cleaner, more efficient energy
A big driver to reduce environmental impact for utilities companies, something that new technologies can help to realize
Move from integrated monopolies to open competitive markets
In many markets, the utilities industry is moving from tightly integrated monopolies to open competitive markets. Poses new challenges for especially energy retailers that compete on a market and need to fight for revenues with new services and new customer experiences.
Increased demand for better consumer experiences
Consumers are getting used to better consumer experiences from other industries and this impacts their desire for better experiences in every part of their life. Utilities companies need to step up and compete.
Integration of renewables into the grid
A new mode of energy production where everyone can be both a consumer and a producer of energy is happening. This puts requirements on the grid and it needs to be updated to manage two way interaction with consumers.
Utilize ICT
Expertise and insight in all areas of ICT need to come together to create new opportunities for energy and utility businesses. Opportunities that come from;
- near real-time business management.
- using smart devices and networks to create a truly responsive and adaptive enterprise.
- cloud-based services that gives limitless room to grow and change direction without costly investment in systems and skills.
- Managed service knowledge and abilities from our global telecom operations
Innovate for better customer experience
Electricity utilities have been focusing on smart metering for many years, which will make an abundance of consumption data available. But this does not address consumer engagement, customer experience, or the effects of electricity consumption.
The era of building new, big centralized solutions is coming to an end. The expansion of new generation needs to come from renewables and distributed generation to a larger extent.
The energy utility industry needs to utilize the opportunities offered by distributed generation and storage to facilitate change and continue to drive a development that supports renewables.
At the edge of the grid, where storage, distributed & aggregated generation, home energy management and other connected home services thrive, there are large opportunities for innovation and new revenue sources.
New ecosystems
Developing a new mindset, new competencies and establish a new ecosystem of business partners will be crucial to gain clock speed and deliver world-class customer experiences. It might be hard to start to look for dissimilarities in new partner arrangements but that is needed. More of the same will not generate new revenue.
Business models
New business models will emerge based not only on hardware such as storage and generation, but also from data generated by assets in the system. Smart meters are only one type of sensor, and however important the consumption and delivery quality data are, many new services for consumers will emerge from sensory data outside the actual grid. In a networked society, all assets that benefit from being connected, will be connected.
The border between the physical and digital worlds will become translucent. Data captured from the environment (weather), houses, appliances, smartphones and wearables will be used in combinations and for purposes we can only imagine. Utilities that want to survive this flood of possibilities need to be open minded and let go of their traditional businesses – to nurture ideas and drive from emerging players.
Energy utilities need to question current business, but also operations: What are their core business, what parts of the processes must they run in-house and what can (should) be run by other actors. As a first step I this direction ->NEXT
While utilities have historically not embraced outsourcing, attitudes are shifting. The complexities of smart grid deployments and systems integration are a few of the drivers behind a growing market opportunity for outsourcing of smart metering operations. As a result, power industry hardware and software vendors are increasingly offering managed services solutions.
In their report, “Smart Grids as a Service”, research firm Navigant Research expects that of all smart meters installed globally, 31,1% will have some level of third-party management by 2023.
Today, Ericsson is launching exactly that, the Ericsson Smart Grid as a Service.
At a time when ICT becomes increasingly critical for electricity providers as they look to improve operational efficiency and find ways to innovate for better customer experience, we’re launching Smart Metering as a Service (SMaaS).
SMaaS is an end-to-end business process outsourcing from Ericsson, riding on our experience of working with over 42 million utility meters worldwide today. A key advantage of SMaaS that will directly benefit consumers is that it gives utilities companies much faster time-to-market, as well as superior meter management and operations with maximum cost savings. For consumers, this means greater control and more reliable electricity services – including much more accurate billing and trouble shooting. It also means possibilities for advanced home services in the future – such as alerts when appliances are left on, or automation for lighting, heating and cooling – which our ConsumerLab research has confirmed as areas that attract high consumer interest.
For utilities, the transparent governance and performance reporting in SMaaS allow them to keep control on business processes and focus on their core business. In short, utility providers will enjoy lowered Total Cost of Ownership, reduced complexity as they will have Ericsson as a single point of contact, and improved quality of service, which ultimately means improved consumer experience.
Multi-utility, by that we mean Electricity, Gas , Water and Heating /Cooling
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The Communication Functions consists of:
- Communication Network & Topology management
- Connectivity management: Third party management of other service providers , like for example the connectivity solution
Ericsson supports customers on communications strategies with clients and other external stakeholders
1.
Utility benefits from SMAAS by having:
- Fast start/Short time to market without huge upfront investment since Capex is transferred to Opex over the contract years (typically 5), and utility pays for the capacity actually used.
Utility does not need to invest in competence development for activity which is out of their core business
High efficency of multi customer service delivery and resource sharing may decrease the cost of operation for 20% or more.
All this together results in reduced Total Cost of Ownership for Utility
2. Reduced complexity is another benfit.
Ericsson provides Utility with Single point of contact for all aspects of Smart Metering process,
including the follow up of changing Legislation and technology requirements.
Clear responsibility definition and distribution, between Ericsson and Utility in all areas and during complete life cycle of solution, such as Delivery management, Planning and Engineering, Deployment and Integration and Service Operations.
Ericsson Governance Model enables Utility to keep control of outsourced function and to participate in taking all important decisions influencing solution operation and future development together with Ericsson.
The model that ensures focus and accountability consists of three levels:
On the Performance Review forum, the daily operational matters are discussed including service performance.
On the Business Development Forum, the required Volumes, capacity and new services plans are exchanged.
The Board of Directors forum discusses strategic lines and overall budget and contract performance follow-up.
3.
Ericsson delivers the services based on mutually agreed Service Levels with focus on Key Performance Indicators corresponding to Utility Business Needs, and provides Utility with transparent reporting.
Ericsson constantly measures and improves the Quality of Service, which is reflected in improved Utility End User experience, giving Utility neccesary competitive advantage on the market.
>42 million meters:
Managed by platforms developed, operated or maintained by Ericsson
Innovation:
Focus on innovation for utilities, participating in several innovations projects such as GAD, Stockholm Royal Seaport, Ausgrid, Finseny, Address, price and ELVIIS.
Standards:
Participating in several standardization bodies for utilities such as mandates M441 and M449, ESMIG, ETSI M2M, NISR, IEEE, UTC, GWAC etc