Gustavo Forteza, Soluziona, Uruguay

Distribution management systems can help utilities operate effectively in competitive markets. Implementing such systems can be a complex task, however.

The process of deregulation, the new climate of competition and the rapid restructuring facing the electricity sector in a number of countries is leading to a tremendous demand for tools based on information technologies that can help bring operations in at an acceptable total cost.

The rise in merger activity, more sophisticated competitors, more demanding regulatory requirements and clients requesting further options and services are some of the factors that lead utility companies to seek new operating solutions. This means that distribution companies should focus their efforts on outlining new corporate information strategies that allow them to confirm their position as a competitive and service-oriented energy provider.

There are clear benefits for utility companies that implement an effective Distribution Management System (DMS). These include improved customer service, greater network reliability and a reduction in operating costs.

Unfortunately, there have been many cases that have failed in the electricity sector around the world. There are a number of reasons for these failures, including: overly ambitious goals, unclear objectives, the lack of an IT strategy, inadequate specifications, lack of know-how within the organization and poor implementation of the technical system itself.

There are eight factors which, in our experience, can best contribute to a successful project. We do not mean to imply that employing them correctly will ensure the successful implementation of a DMS, as many other variables are involved in the process. However, we can say that not considering them will very probably result in project failure.


We recognize a DMS to be an information system developed to provide comprehensive support to a utility company’s distribution area, from planning through to placing in production within facilities and including its operation and maintenance and technical, economic and administrative aspects.

In general, it should offer functionalities that allow you to:

  • Receive, record and consult all customer claims relating to service quality
  • Maintain and consult information on each distribution network component and customers attended
  • Maintain and consult information on work carried out in the network.

To implement a modern DMS that meets a utility company’s current and future needs, two big steps should be taken.

The first is to successfully integrate the following systems under a single network operating model and platform:

  • A geographic information system (GIS)an incidences management system (OMS)
  • A supervisory control and data acquisition (SCADA) system
  • A trouble call system (TCS)
  • A work-management system (WMS)
  • A maintenance management system (MMS)
  • A mobile workforce manager system (MWM)
  • The second is to integrate the DMS with the company’s other two big systems:
  • The consumer-management system (CIS)
  • The enterprise resource planning (ERP) system.

Although it looks complicated, from the dawn of DMS solutions more than 15 years ago, the biggest goal has been to integrate real-time information from a SCADA system with the spatial information in a GIS.

A database of installlations
Click here to enlarge image


Seven success factors

The key is flexibility: Most utility companies have spent the past 15 years implementing independent applications. In the early 1990s, old-fashioned consumer-management systems began to be replaced. This was followed in the mid-1990s by the development of the WMS, OMS, GIS and DMS.

Many people have realized that integrating these independent systems is the only technically and economically viable way to achieve the efficiencies required in the new competitive environment.

To maximize their investment in technology and still evolve, these companies are seeking solutions that can support the current systems and at the same time offer a solid basis for building and integrating new systems and applications.

The scope proposed for the DMS offers the chance to integrate information with corporate information systems in real operating time in a secure and manageable fashion.

A modular DMS architecture allows SCADA, GIS and any other module to live its natural life cycle and eventually be replaced with products from any supplier. This internal modular approach allows companies to implement specific DMS applications to meet business needs as detected. This allows the system to be implemented gradually and in more manageable phases.

Investment analysis: As with any investment, the implementation of a DMS involves meeting one fundamental goal: creating the greatest possible added value for the company.

Value can be measured in many ways, from economic profit through to solutions to social problems. However, most executives find that vague promises about improved service quality, increased productivity or lower operating expenses are not enough to justify an increasing IT budget.

It is imperative for a company to understand the value derived from investing in a DMS, so it can adopt a logical and repeatable methodology for analyzing investments. This understanding will help business planning by ensuring the company clearly understands the impact that new technology can have on:

  • The connection between the IT solution and corporate strategy
  • The contributions towards increased sales, margins and competitiveness

These impacts are fundamental when it comes to defining the DMS positioning within the corporate strategy.

The company should be able to permanently and confidently see the value of its investment throughout the process. This is why the implementation of a DMS should consider the following challenges:

  • Verifying and communicating the return on the project during its entire life cycle
  • Maintaining system flexibility and modularity to evolve new components that maximize value
  • Creating a cultural and operational capacity within the company to make the most of investment potential.

The functional specification of the system: It is very important for a utility company to define a long-term strategy for introducing a DMS. This strategy should focus on functional rather than technological solutions. Technology can change (and most probably will), but functional requirements remain the same.

As with other IT systems, the technical possibilities anticipated by DMSs have grown dramatically in the past ten years. However, many systems do not work the way they were planned to, or do not fully satisfy users’ expectations.

The correct specification of the functional requirements of a DMS, justified with a clear business vision, is fundamental in minimizing the risk of project failure.

The process of specifying requirements should include analyzing the business in a way that provides a vision of the company’s processes when the new system is up and running. This study can then be used to define system objectives, which can be used as a support to specify functional requirements. Each requirement should refer to at least one system objective, or otherwise it should not be accepted as a requirement.

The integrator’s choice: From the point of view of the distribution company, the project does not begin with determining explicit contractual agreements. This is the result of problematic non-structured situations in which the various parties involved have a different concept of the problems and solutions.

Neither does the project end when the system is delivered, as it includes integrating the system in the day-to-day life of the organization.

It is from this broader point of view that the company has to establish a work method that will allow it to implement a DMS as a joint effort between the client and solution provider.

A client-provider relationship should be established whereby both parties have a common vision of the new system and in which their goals are complementary. A relationship based on collaboration and the recognition of a common goal will undoubtedly generate mutual trust.

Anticipating organizational impacts: The implementation of a DMS will introduce into the company a series of operational changes that will inevitably have a significant impact on the organization.

The ability to predict these impacts and react suitably and in time will go a long way towards determining the success or failure of the project. That is why the implementation project should include a team responsible for:

  • Reviewing the organizational model and adjusting it to the new reality
  • Redefining the business processes and detailing the new operating procedures
  • Identifying the new functions and determining the capacities needed to execute them.

Change management: There is no doubt that the biggest challenge a company will face in the process of implementing a DMS is channeling functional, technological and organizational impacts and training staff to operate with new procedures and new technology tools.

To ensure this, it is advisable to act in four main areas: internal and external communication, managing the project team, training system users and organizing post-implementation support.

Management support: As with any activity considered strategic for the company, the implementation of a corporate-level system requires the unconditional support of management.

Software integration is the economical solution
Click here to enlarge image


Problem identification

Having directors participate in project-related activities and events will give clear signals to the areas affected that a serious process is being confronted and will be used as an example to foster the commitment of all the resources involved.

Controlling and monitoring the progress of the project and the requirement to meet goals will motivate the people responsible to not deviate form the strategy prepared.

Utility companies depend on information systems such as GIS, SCADA, CIS and WMS. These systems can continue to work perfectly well in isolation, but the need for communication between them and to have them integrated is the differential factor that will contribute t to the business.

The integration work is not easy. There are various problems that could threaten the success of the project, such as: incomplete requirements, lack of participation on the part of users, lack of resources, overly ambitious expectations, lack of planning, etc.

The challenge in successfully implementing a DMS requires knowing how to identify these problems in time and having the ability to tackle them at the right time and in the appropriate manner.