Utilities Tech

Utilities Tech

The 4th Industrial Revolution is here! The first author that coined the term was German Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, in his book: “The Fourth Industrial Revolution”. Schwab argues that this revolution is different in scale, scope and complexity from any that have come before. Characterized by a range of new technologies that are fusing the physical, digital and biological worlds, the developments are affecting all disciplines, economies, industries and governments, and even challenging ideas about what it means to be human. With my releases “Revolution 4.0 and the Man of Tomorrow” in March 2016 I was amongst the first authors to dwell on it’s meaning. But how is it different from the previous three industrial revolutions? An example in the Utilities Sector will show us the LIGHT.

In release “Where no Man Has Gone Before” I explain that the Utilities Sector is composed by electricity, gas and water. Let us take the electricity sector as example: Thomas Edison was the inventor of Direct Current Electricity and the light bulb. He founded General Electric Light Bulb Company in 1887, which was later incorporated in General Electric Company. General Electric, the only surviving company of the Dow Jones Industrial Average from the beginning of the 20th Century manage to survive the following revolutions by diversifying into segments such as: Appliances, Power and Water, Oil and Gas, Energy Management, Aviation, Healthcare, Transportation and Capital. Meaning, it’s core business is not electricity anymore.

In his book “The New Oil – Using Innovative Business Models to Turn Data Into Profit”, author Arent van’t Spijker takes us through a fantastic example as to how to reshape the electricity sector into a Data Value Driven industry. In the following Business Model Canvas, “a utility company sells electricity contracts (X) as a value proposition to consumers (A). It’s key activities include the supply of electrical power (X). As part of this activity, the utility company installs digital metering devices in the homes of consumers to measure the amount of power used by the household. These smart meters do not only measure the amount of electricity used, but also register additional data such as the times of use, the fluctuations on the power grid and even which actual devices are using power. This data is sent back to the utility company, where it is stored in a database. It is then used to provide services (Y) to the consumers, for instance by offering variable rates during the day to stimulate power usage at offpeak times or by displaying personalized advice on a smart thermostat or a web portal”. 

“The device at the heart of this data transport is called the Smart Meter, which measure both incoming electricity and outgoing flows over a particular time. The customer value resides in the data, for instance by comparing your washing machine’s data against a global database of washing machines, your electricity company may detect that your machine is using more energy than average washing machines that run as often as you run yours. Based on that data, the company could calculate that purchasing a new washing machine would save you enough money to be profitable in 4 years’ time”.

This is a clear example of Revolution 4.0 applied to revitalize an industry. An electricity company implements smart meters through which data is collected. This data is processed, “packaged” and sold a service. Consumers might pay an extra fee for this data, but it is extremely valuable for cost savings. The data “pays itself” to put it bluntly. As the Data Driven Strategy grows, electricity companies will continue offering their standard services but will as well grow their business in the data segment. Eventually Smart Meters and the collected data can be sold not only to existing customers but also to non-customers. This is a way to expand the market by attracting new customers but also to unlock untapped market value. In this example, we clearly view how the fourth industrial revolution differs from the previous revolutions, which were capital intensive. Switching to a Data Driven Strategy does not require huge capitals, but is knowledge intensive. Having vision, taking risks and leading data driven strategic changes are un-negotiable skill-sets for the World of Tomorrow.

https://en.wikipedia.org/wiki/Technological_revolution

http://the4thindustrialrevolution.blogspot.com/2019/04/utilities-sector.html

https://www.amazon.com/New-Oil-Innovative-Business-Models/dp/1935504827

Oil Tanker Tech

Oil Tanker Tech

I recently participated in the implementation of the SAP Business One product in an argentinian company dedicated to renting oil tankers for fluvial transportation throughout the argentinian Mesopotamian rivers. Now consider something very important, a software implementation can be used not only for the technical benefits of the software itself but also as a way of reorganizing the departments and drive efficiency. A product aimed at small and middle sized companies, an implementation of this product is supposed to last no more than 6 months. Yet, after many twists and turns Go Live date was postponed many times.

One of the reasons was that the software was sold as a bi-monetary system, but did not comply with argentinian accounting standards, meaning Fixed Assets and Inventory are in Argentina mainly “priced” in USD a situation very atypical in other countries which value these assets in local currency. This caused the Accounting Department to lose confidence in the software and implementation team, proceeding to thoroughly test the system to verify compliance both from an accounting and tax perspective.

Another reason for the delay was the implementation of another system called SAION that would serve as communication by satellite between the ships and SAP. The personnel in the ships would load the materials and inventory information to SAION on board, and this information was to be transmitted to land by a satellite signal. This process, though complicated, was very sophisticated and an interesting technological development. Due to the complexity of the implementation and after a change in Management this advancement was aborted, finally agreeing on sending the information to land in an excel file that would later be uploaded manually to the SAP.

After a year and a half of pushing through strong corporate resistance, the implementation was divided in two: a light implementation including accounting and basic logistics, and a subsequent phase involving deeper logistics. The first implementation phase went on not without resistance and complaints, but was smoothly implemented; and the second phase is still in process focusing more on the advantages in K.P.I.s for management.

Consider the history of this company: in the past National Oil company Y.P.F. had it’s own oil tank service, when it was privatized this service provider was established to provide external carriage service to Y.P.F. and other Oil players in the local market. Even if the company has subsisted for a couple of decades, the business model is difficult to export considering the big investments required and the difficulties of engaging in business in the oil markets in other countries. Could this business model be applied in Brasil, for example? It would imply access to huge capital investment as well as business relationships difficult to access for small foreign companies. But remember that businesses are forced to innovate and expand or they will not resist the test of time. Where is the potential then to build and grow an exportable business model for such a company?

Revolution 4.0, the fourth industrial revolution, implies a shift in mindset to all sorts of companies, be it start ups, middle sized or big companies. Applying revolution 4.0 to the Oil Tanker industry is the solution to expand globally, by producing the technology to provide services to the industry and then export these services. The SAOIN project that was aborted missing the big picture: once implemented this solution could be branded and easily exported to other players in the industry worldwide. As described in the Lean Start Up defined by Eric Ries, companies can support the establishment of Innovation SandBoxes.

An Innovation Sandbox can be defined as ‘A digital environment and toolset which enables large groups of stakeholders to act autonomously and without hierarchy in the building of innovative concepts and solutions’. The main purpose of an innovation sandbox is to allow individuals to collaborate collectively in real time in the act of problem solving, opportunity identification and concept building without the communicative and logistical barriers which emerge in larger organizations, a result of structural considerations such as siloed departments, lack of access to relevant decision makers, and the ability for individuals lower down the power spectrum to have their voice hear. Social mechanics and high quality user interfaces (such as those seen on public social networking platforms i.e. Facebook and Twitter) are deployed to increase participation rates and ensure that stakeholders are sufficiently engaged with the collaborative efforts.

The products developed in the Innovation Sandboxes can be later absorbed by the organization, or be branded and sold separately to the industry. By supporting the creation of Start-Ups to provide technology services to the Oil Tanker industry, small companies such as the one I provide in this example can easily escalate and globalize. Whether the project is carried out as an internal project or as an external project to serve the organization, applying Revolution 4.0 to provide the technology as a service for the industry is the way to go. As economies become digital and the technology sector is accountable for a larger share of GDP, companies will need to be creative, innovative and technology orientated not just to progress but to survive the test of time.

https://en.wikipedia.org/wiki/SAP_Business_One

https://en.wikipedia.org/wiki/Lean_startup

https://medium.com/innovation-playground/the-innovation-sandbox-d9€€dfbdd15914

Green Tech

Green Tech

Green Tech, also known as Environmental technology or Clean Tech, refers to sustainable energy generation technology. It also refers to a means of energy production that is less harmful to the environment than more traditional ways of generating energy, such as burning fossil fuels. They are energy sources that renew themselves and never run out. Increasingly, socially responsible (SRI) investors look to companies that specifically employ or produce green technologies (or that do both). 

"Cleantech" is an industry term used to describe products or services that improve operational performance, productivity or efficiency while also reducing costs, inputs, energy consumption, waste or environmental pollution. Large companies like Starbucks and Whole Foods employ green technology practices alongside a variety of small startups. Othes such as Tesla Motors and SolarCity produce or install green technologies such as electric vehicles or photovoltaic solar panels.

TODAY, over 80% of the energy is coming from fossil fuels. Green Tech constitutes only 10% but is a fast growing segment. Venture Capitalists are stampeding to invest in Green Tech, which can be described or simplified the following way:

1. Solar Energy: Solar panels use the energy provided by the sun. The material inside (silicon) absorbs the energy, and an atomic reaction generates energy. A control device called an inverter changes the electricity from DC to AC. The electricity passes to outlets and then to electrical devices, like a computer.
2. Wind Energy: Wind turbines are might seem small but are 20 story high! The blades connect to gears that create energy, which is converted by a generator into electricity which travels down the tower through a cable which in turn connects with the power grid that serves the communities.
   
3. Hydro Energy: it is generated by capturing the force of moving water that is in the rivers and oceans. It is generated in damns, rivers and streams, where gravity helps out. It is done by using the movement of the water to spin hydraulic turbines. The energy is converted into electricity through a generator and then sent to a power grid.
4. GeoThermal: magma, which lies underneath the Earth, can be used as energy. The heat contain 50.000 time more energy than all the oil and natural gas resources in the world. Releasing a small amount of that heat can create electricity. A well drilled a couple of miles deep can capture the rise of hot water and steam. That steam goes through a turbine and a generator produces electricity.
   
5. BioMass: energy is absorbed through trees and plants through photosyntesis, and in release when organic matter decomposes. Plant waste can be collected from farms and manufacturers, the waste is burned to hot water, which creates steam. The pressure of the steam spins a turbine, which empowers a generator, which creates electricity. Waste from animals can also be collected in a large tank called the digestor, filled with bacteria that eats the waste and converts it to methane gas, which empowers a generator and so on. The same process can be used for methane.
   

Green Tech is useful to fight climate change since is does not produce green house effect. They create no pollution emissions. Renewable energies renew themselves and will never run out. They cost very little to operate. Disadvantages include generation of energy only in small scales.It will take time to replace fossil fuels, but eventually it will happen.
It may seem difficult or expensive to establish your self as a Green Tech Entrepreneur since they are technologies that are CAPITAL intensive as well as KNOWLEDGE intensive. That being said building a prototype, a 3D simulation model and a Business Plan is accesible to anyone in mildly developed countries. Things are getting easier, much easier than before. Getting financed might a challenge though for countries that score high in the Corruption Perception Index (CPI).
The Mayas, a long lasting advanced civilization that misteriously disappeared, did not predict the end of the world. They predicted a period of changes from the year 2012. Revolution 4.0, the Post-Industrial society, the Knowledge Based Economy is here to stay. It's up to you, and only you to change your situation. Make no mistake, these changes will take place fast, there will be realignment in the distribution of world power in the NeXT few years. Which SOCIETIES have the VISION to make this happen?

Hop on this revolution, the 4th industrial revolution, a REVOLUTION OF THOUGHT.

Source:
https://www.investopedia.com/terms/g/green_tech.asp
https://en.wikipedia.org/wiki/Corruption_Perceptions_Index