March 8, 2024
3 min read
Between inflation, looming clean energy target dates, and mitigating older infrastructure, utility companies are struggling. Fortifying their systems against wildfires, floods, tornadoes, hurricanes, and earthquakes is becoming more costly each year. The number of natural disasters has risen sharply over the last 40 years, climbing from an average of three annually in the 1980s to 13 per year during the 2010s. Customers have little patience for outages, and regulators are not shy about fining utilities that keep having issues or blackouts.
From an IT perspective, the utility sector is being challenged to find ways to keep operations and maintenance (O&M) costs low while also eking out extra budget dollars for the necessary innovation their customers expect.
However, ever-evolving digital transformation usually comes with a hefty price tag and at a more rapid pace than other projects.
“Especially in the utilities space, you put poles in the ground, they expect them to last for 30 years. Power plants are expected to last maybe 50 years,” says Mike Rozsa, former NiSource CIO. “IT solutions come and go pretty quickly, a lot faster than most of the utility assets, so that potentially affects the pace a bit.”
Rozsa joined Chris Lecosia, former Software Asset and Licensing Manager at Southern California Edison, and Origina’s SVP of Global Marketing and Thought Leadership Hari Candadai, for a conversation on optimizing mainframe software maintenance and support within the utilities industry in February.
“Revolutionizing Utility IT O&M: Escape from IBM’s Mainframe Maintenance Maze,” discusses the challenges around keeping the mainframe systems that utility companies depend on running smoothly, securely, and in compliance.
Like many industries that rely on the stability of mainframes, utility companies also run their mission-critical solutions on the workhorse platform. However, the problem isn’t the mainframe’s reliability, it’s the cost of maintenance.
“The highest cost item in most utility’s O&M budget is the mainframe,” Rozsa says. “It’s a bit of a battle. You need high reliability, so you need a platform that is robust and can handle large loads, but it costs significantly more than other platforms. How do we find a way to solve that challenge?”
Lecosia agrees. “From the first day I started my role as software asset manager, the pressure to reduce cost was there,” he says. “It’s always been in the software space. Software is one of the largest contributors to IT spend.”
In fact, a majority of IT budgets — up to 90% — is spent on just keeping the lights on for existing software, according to the Gartner IT Key Metrics Data Executive Summary. That leaves only 10% for the digital initiatives CEOs are counting on IT leaders to implement.
With utilities spending more money on O&M costs every year, it’s easy to see why this trend cannot continue.
There is a shortage of mainframe technical experts with the skills necessary to maintain mainframe software. With baby boomers retiring in large numbers, they are taking with them all of their accumulated mainframe knowledge with far fewer people to fill the void.
In fact, 93% of respondents to Forrester’s Best Practice Report, “Tackle The Overwhelming Challenge of Mainframe Modernization,” say it is “moderately to extremely challenging” to acquire employees with the right mainframe skills and resources.
Previously, utility IT departments hired recent college graduates to fill these open positions until universities stopped teaching mainframe technologies. Consultants are expensive, and even IBM itself made the conscious decision to let people go who had previously supported legacy systems in favor of new hires trained in the latest systems.
Ultimately, IT modernization in the utilities sector is about managing the expectations of customers and employees, along with leveraging the latest technologies without getting rid of the systems you’ve relied on up until now.
“You can’t just throw everything away. You have to leverage the latest technologies, whether that is mobile or virtual reality,” says Rozsa. “Long-term, it can include the mainframe, keep the reliable platform that handles large workloads, and still be able to interact with modern devices.”
One way to battle these budget and technology challenges is to engage a third-party software maintenance (TPSM) provider. TPSM companies like Origina can save up to 50% on maintenance costs while keeping all current product versions healthy and secure. They also offer strategic advice on ever-evolving IT environments by analyzing potential problems no matter where they may occur and work proactively to protect, extend, and enhance your IBM mainframe software.
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