Guest Post: Empowering People to Transform Asset Management

This article was co-authored by Orla Newman, Asset Assurance Manager, ESB Networks, and Jacinta Ryan, Transformation Director, ESB Networks, and originally appeared in the July 2024 issue of the IAM’s Assets Magazine. 

ESB Networks is the licenced electricity distribution system operator and asset owner and the onshore transmission asset owner in the Republic of Ireland, serving over 2.4 million electricity customers.

With electricity playing a vital role in decarbonising energy, ESB Networks is playing a significant role in tackling climate change and delivering Ireland’s climate action plan. In this context, ESB Networks published its ‘Networks for Net Zero Strategy’, which sets out our commitment to having a net zero ready electricity distribution network by 2040.  This involves the complete transformation of the electricity network to accommodate increasing levels of renewable generation and to enable electrification to take place. By investing in developing the network, ESB Networks will enable customers to adopt new technologies, such as heat pumps and electric vehicles, so that they can live more efficient and sustainable lives.

On this basis, dependence on the electricity network is growing, and the quality, condition and performance of the network is becoming increasingly critical. Resilient infrastructure is one of three strategic objectives highlighted in our ‘Networks for Net Zero’ Strategy.  To meet this strategic ambition objective, we have transformed our approach to asset management.

A Transformed Approach to Asset Management

In 2008, ESB Networks was the first utility company in Ireland to achieve PAS55 accreditation for Asset Management and subsequently achieved certification to the international standard ISO55001. ESB Networks has an effective asset management system in place, however, to finesse the balance between cost, performance, opportunity, and risk, we have embarked on a transformed approach to asset management.

We have established an ambitious business-led transformation programme, which empowers our people to lead transformation, to develop new ways of working and to design the new solutions to support them to do proactive work.  This is aligned with the Institute of Asset Management’s big picture view that ‘people do asset management.’ In an organisational context, cross functional ‘teams of people do asset management’.

As an electricity distribution business, ESB Networks is a highly interdependent organisation, and this is recognised in our existing Asset Management System. The transformation opportunity is to create a closely integrated organisation by leveraging digital, unlocking value from our data, and providing line of sight for everyone involved in asset management.

Digital and Data

In transforming our approach to asset management, we have accelerated our use of digital and data.  This has enabled us to modernise, systemise and unlock the value of effective asset management.

While tools and technology are important, engaging the workforce, providing clear leadership, and creating collaboration between business areas are the real differentiators of transformed asset management.

Engaging business teams to develop digital tools and understand their data requirements was critical to empowering our people, building on their capability, as well as adopting and embedding new ways of working. Transformation is not being done for them, they are leading it, with support.

Accelerating Digital

As part of our transformation programme, we have accelerated our investment in digital solutions. To enable this, we have adopted an agile approach to digital deployment, delivering minimum viable products to ensure progress and always prioritising based on value. For example, we have invested in a new risk management solution, asset health models and a new approach to capital investment decision making.

Risk Management

We have developed a revised and industry leading risk management approach which provides full transparency of our operational, tactical, and strategic risks, associated controls, mitigation actions and continuous improvement tracking.  This new approach provides a high level of business assurance on the management of business risk.

Creating an integrated approach to business risk management is achieved by centralising risk registers, developing a risk heat map to help visualise business risks, tracking actions and supporting decision making. We facilitate risk workshops with each senior manager to clearly define and assess risks, implement our risk matrix, and identify controls and mitigation actions. By facilitating these risk workshops, we are ensuring consistency and building risk management capability.

To create an integrated approach to risk management, cross business collaboration and responsibility is essential. For example, some mitigation actions are assigned to people from other teams. A fundamental step change in how we are managing risk is collaborating with the action owners to make sure they understand the risk and accept the mitigation action.

Asset risk and any risk mitigation investments, are aligned with the new asset health models and capital investment decision making approach, as outlined below.

Asset Health Models

ESB Networks also developed Asset Health Models, aligned with the Ofgem UK, DNO Common Network Asset Indices Methodology (CNAIM) approach, for our key asset classes. We have also provided assurance by having the models and our implementation of CNAIM externally validated. These Asset Health models move the dial further towards holistic quantitative measures of asset risk and informs our future investment plans, which we approve and propose to the electricity regulator every five years.

Implementing the CNAIM approach has helped to build organisational capability, with asset managers and specialists understanding the impact of age, location, duty, observed condition and measured condition on asset health. Their expertise has informed the health score and reliability modifiers leading to an appropriate probability of failure. The consequences of failure brought different perspectives together and again developed cross functional capability on the impact of asset risk.

Another major learning and capability development opportunity is understanding the importance of data. This will be addressed further below.

The output of these models is used as input into our new Capital Investment Decision Making approach.

Capital Investment Decision Making

We have established a Capital Investment Value Framework to guide investment decision making. The Value Framework is based on capital value, business outcomes (asset risk reduction, capacity increase), external expectations (resilience and network capacity), risk exposure and compliance (safety, environmental). The Value Framework also considers each investment in the context of the performance of the network.

The Capital Investment Value Framework was developed through significant engagement and collaboration with key business stakeholders to ensure that all business perspectives were captured and considered. The next iteration of the Value Framework will build on the existing values of Environment, Safety, Reliability and Capacity and will include values for flexibility, sustainability, and connecting renewable generation.

To implement the Value Framework in a systemised way, we have moved away from traditional information storage in disperse locations and procured an investment decision support solution which allows us to consider the individual investment opportunity as well as how it competes with other investment opportunities. This enables an optimised investment programme, balancing asset risk, network performance and cost, and forms the basis of investment proposals to the Commission for Regulation of Utilities (CRU).

Becoming Data Driven

The transformation opportunity identified was to create a highly integrated organisation by leveraging digital, unlocking value from data, and providing line of sight for everyone involved in asset management.  One of the key aspects of asset management that connects our business is the data that is created, captured, and used to provide insights to inform asset management decisions.

ESB Networks creates and uses large volumes of data, some of which is business critical. This data is produced by assets, devices, the workforce, customers, suppliers and third parties. Data is stored in secure systems of record, files, both digital and physical, structured, and unstructured.

As part of the transformation programme, we are investing in many digital solutions. The effectiveness of these digital solutions is dependent on the availability and quality of the data. For example, the development of the asset health models highlights the importance of putting structure on how we manage data and insights.

The data in the asset health models is structured to document the data sources, data logic, data linkages. Analysis was done on this data to determine the uniqueness, consistency, validity, and the baseline data quality. Root cause analysis of data quality was completed which informed the development of data quality improvement plans.

Business leaders worked hand in glove with the data team. This has positioned us to establish new data responsibilities for people in the form of business data stewards, data creators, data collectors.  This is the real opportunity to connect everyone who impacts assets management, through the lens of data. Explaining how data is used by many and therefore the importance of creating or collecting quality data has been a gamechanger in transforming asset management.

Prior to this, we tended to view data as enabler of the business—we now consider ‘managing data and insights’ as a core business capability, with new responsibilities for data being embedded in the business.

Empowering our People—New Ways of Working

ESB Networks is a company with a long-standing, strategically important history and culture dating back almost 100 years. As a result, established practices have become ingrained in the routines of our employees and our customers.

To adopt and embed a transformed approach to asset management, we have given our people the opportunity to contribute, grow and lead the development of our new modern ways of working. We have also identified strategic capabilities needed by our people to embed new ways of working; these include risk management, data and digital capability.

By leveraging digital and data, we have established a core business approach to managing data and creating insights, enabling us to make faster better risk-based decisions. This has moved us to an integrated and collaborative approach to asset management. It has helped create a more integrated organisation where people can see the role, they play in managing assets through the whole life cycle. This integrated organisation has transformed our approach to asset management and empowered our people.

Transforming our asset management capability is one of the key activities underway in ESB Networks to create the electricity network of the future. One which will contribute to enabling economic and societal growth, decarbonisation of society and more empowered and better-informed customers. Our assets are central to delivering these commitments.

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