This case study addresses the benefits of master data management to the energy industry, and how Vantaa Energy is building competitive advantage with master data. This is enabling the company to strengthen its market position in Finland now, and will support the development of its business in other Nordic countries and Europe in the future. Vantaa Energy’s Executive Management are highly supportive and are driving this new way of thinking and working because they understand that the knowledge capital in the business is not merely an operational asset, but has huge strategic value.
Electric cars and politics
The energy industry is going through major changes. In particular, energy applications and usage profiles will change as electric cars go mainstream. The Nordic electricity market will be deregulated in 2015, and this creates an opportunity to build a new customer base for those who are able to benefit from geographic information systems. In addition, the remote reading of electricity meters will be mandatory in 2014, which will massively increase the amount of data to be collected and analysed by data management systems. As so-called Smart Grids become more common, households will even have the opportunity to sell any excess home-generated electricity, for example from solar panels or windmills, back to the Grid. Taken together, these changes will all have a big impact on data administration in the entire energy industry. Political decisions are shaping the markets and projects require long-term commitment to succeed. In this very traditional industry it is often hard to differentiate from competitors with just a conventional product range, and so competitive advantage must be driven by innovation.
“In the energy industry, you can take huge leaps forward when you understand the possibilities of data administration and distribution by investing in master data” says Juha Niemi, ICT manager, Vantaa Energy.
The focus of Master Data / Integration Analysis ¹ was to support Vantaa Energy’s understanding of their own databases from the data. “Vantaa Energy had a good preliminary idea of the status, but an analysis of the current state of master data was needed to identify problems and to draft recommendations”, says Juha Niemi, about the initial situation.
As the project proceeded, the data administration team discovered that managing master data could drive benefits in several business units and the analysis became much more strategic. Senior management could see that the full impact of master data management provides very positive benefits across the whole organisation, not just at an operational level. Master data processing will grow and develop in the future for the management team, with a person in charge for each area of master data.
“Ineo’s approach is completely new. We would never have done the master data assessment, unless it had been done like this. There was no other option. This exercise was a real enlightenment for me”, says Juha Niemi, ICT manager at Vantaa Energy. Previously, dozens of data systems were administered from a local system viewpoint, without central coordination. As a result of the analysis it became clear that the local system-centric approach had big limitations.
A virtual team will share the basic information sources
In the future, a virtual team will control the selection and management of information management systems. The team will identify an individual responsible for master data, and with data management and modeling in good condition, the business can move through a number of steps towards a centralised database system. ¹
The analysis has also informed the thinking of the Data Administration team about data acquisition. One of the most important tasks of the new virtual team is to internalize “Managed by the Source” thinking. In this methodology, data can be purchased from the external sources and a key skill for the team will be learning to liaise with the data suppliers to understand what information can be acquired, and from whom.
Vantaa Energy is investing heavily in customer-facing Internet services that require both high quality, and good management of, master data. With a combination of a well managed online services and the successful integration of geographic information into marketing campaigns it will be possible to win new customers in the newly opened Nordic markets.
Master data analysis also highlighted the challenges of property life cycle management in the energy sector. At the moment, fixed asset knowledge, for example the location of electrical distribution cabinets, is not held centrally or systematically. It should now be simple to extract and transfer to databases. The analysis also provided useful insights into future CRM systems, by examining how data can best serve the sales organization.
¹ The analysis covered 12 data bases, 7000 tables and 430 000 000 data rows.