IT operations modernization helps energy powerhouse Exelon acquire businesses

This next BriefingsDirect IT innovation discussion examines how Exelon Corporation, based in Chicago, employs technology and process improvements to not only optimize their IT operations but also to both help manage a merger and acquisition transition, and to bring outsourced IT operations back in-house.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy.

To learn more about how this leading energy provider in the US, with a family of companies having $23.5 billion in annual revenue, accomplishes these goals we're joined by Jason Thomas, Manager of Service, Asset and Release Management at Exelon. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: I gave a brief overview of Exelon, but tell us a little bit more. It's quite a large organization that you're involved with.

Thomas: We are vast and expansive. We have a large nuclear fleet, around 40-odd nuclear power plants in three utilities, ComEd in Chicago, in the Illinois space; PECO out of Philadelphia; and BG and E in Baltimore.

So we have large urban utilities center. We also have a large retail presence with the Constellation brand and the sale of power both to corporations and to users. So there's a lot of that we do obviously in the utility space, and there are some element of the trade, the commodity trading side, as well in trading power in these markets.

Gardner: I imagine it must be quite a large IT organization to support all that?

Thomas: There are 1,200 to 1,300 IT employees across the company.

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Gardner: Tell us about some of the challenges that you've been facing in managing your IT operations and making them more efficient. And, of course, we'd like to hear more about the merger between Constellation and Exelon back in 2012.

Merger is a challenge

Thomas: The biggest challenge is the merger. Obviously, our scale and the number of, for lack of a better word, things that we had to monitor, be aware of, and know about vastly increased. So we had to address that.

Thomas

A lot of our efforts around the merger and post-merger were around bringing everything into one standard monitoring platform, extending that monitoring out, leveraging the Business Service Management (BSM) suite of products, leveraging Universal Configuration Management Database (UCMDB).

Then there was a lot around consolidating asset management. In early 2013, we moved to Asset Manager as our asset manager platform of choice, consolidating data from Exelon from their tool, the Cergus CA Argis tool, into Asset Manager in support of moving to new IT billing that would be driven out of the data and Asset Manager in leveraging some of the executive scorecard and financial manager pieces to make that happen.

There was also a large effort through 2013 to move the company to a standardized platform to support our service desk, incident management, and also our service catalog for end-users. But a lot of this was driven last year around the in-sourcing of our relationship with Computer Sciences Corporation for our IT operations.

This was to basically realize a savings to the company of $12 to $15 million annually from the management of that contract, and also to move both the management and the expertise in house and leverage a lot of the processes that we built up and that had grown through the company as a whole.

Gardner: So knowing yourself well in terms of your IT infrastructure and all the elements of that is super important, and then bringing in-sourcing transition to the picture, involves quite a bit of complexity.

You've leveled the playing field and you have that common set of tools that you're going to drive to take you to the next level.

What do you get when you do this well? Is there a sense of better control, better security, or culture? What is it that rises to the top of your mind when you know that you have your IT service management (ITSM) in order, when you have your assets and configuration management data in order. Is it sleeping better at night? Is it a sense of destiny you have fulfilled -- or what?

Thomas: Sleeping better at night. There is an element of that, but there's also sometimes the aspect of, "Now what's next?" So, part of it is that there's an evolutionary aspect too. We've gotten everything in one place. We're leveraging some of the integrations, but then what’s next?

It's more restful. It's now deciding how we better position ourselves to show the value of these platforms. Obviously, there's a clear monetary value of what we did to in-source, but now how do we show the business the value that we have done? Moving to a common set of tools helps to get there. You've leveled the playing field and you have that common set of tools that you're going to drive to take you to the next level.

Gardner: What might that next level be? Is it a cloud transition? Is it more of a hybrid sourcing for IT? Is this enabling you to take advantage of the different devices in terms of mobile? Where does it go?

Automation and cloud

Thomas: A lot of it is really around automation, the intermediate step around cloud. We've looked at cloud. We do have areas where the company has leveraged it. IT is still trying to wrap their heads around how we do it, and then also how we expose that to the rest of the organization.

But the steps we’ve done around automation are very key in making leaner operations, IT operations, but also being able to do things in an automated fashion, as opposed to requiring the manual elements that, in some cases, we had never done prior to the merger.

Gardner: Any examples? You mentioned $15 million in savings, but are there any other metrics of success or key performance indicator (KPI)-level paybacks that you can point to in terms of having all this in place for managing and understanding your IT?

Thomas: We're still going through what it is we're going to measure and present. There's been a standard set of things that we've measured around our availability and our incidents and whether these incidents are caused by IT, by infrastructure.

One of the key things is how you're changing and how you do IT operations.

We've done a lot better operationally. Now it's taking some of those operational aspects and making them a little bit more business-centric. So for the KPIs, we're going through that process of determining what we're going to measure ourselves against.

Gardner: Jason, having gone through quite a big and complex undertaking in getting your ITSM and Application Lifecycle Management (ALM) activities, what comnes next? Maybe a merger and acquisition is going to push you in a new direction.

Thomas: We recently announced the intent to acquire Pepco Holdings, which is the regional utility in Washington, DC area, that further widens our footprint in the mid-Atlantic area. So yeah, we get to do it all over again with a new partner, bringing Pepco in and doing some elements of this again.

Gardner: Having gone through this and anticipating yet another wave, what words of wisdom might you provide in hindsight for those who are embarking on a more automated, streamlined, and modern approach to IT operations?

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Thomas: One of the key things is how you're changing and how you do IT operations. Moving towards automation, tools aside, there's a lot of organizational change if you're changing how people do what they do or changing people's jobs or the perception of that.

You need to be clear. You need to clearly communicate, but you also need to make sure that you have the appropriate support and backing from leadership and that the top-down communication is the same message. We certainly had that, and it was great, but there's alway going to be that challenge of making sure everybody is getting that communication, getting the message, and getting constant reinforcement of that.

Organizational changes resulting from a large merger or acquisition are huge. It's key to show the benefits, even to the people who are obviously going to reap some of these immediate benefits,  those in IT. You know the business is going to see some. It's couching that value in the means or method appropriate for those actors, all of those stakeholders.

Full circle

Gardner: Of course, you have mentioned working through a KPI definition and working the executive scorecard. That makes if full circle, doesn’t it?

Thomas: Defining those KPIs, but also having one place where those KPIs can be viewed, seen easily, and drilled into is big. To date, it's been a challenge to provide some of that historiography around that data. Now, you have something where you can even more readily drill into it to see that data -- and that’s huge.

Presenting that, being able to show it, and being able to show it in a way that people can see it easily, is huge, as opposed to just saying, "Well, here's the spreadsheet with some graphs" or "Here’s a whiz-bang PowerPoint doc."

Gardner: And, Jason, I suppose this points to the fact that IT is really maturing. Compared to other business services and functions in corporations, things that had been evolving for 80 or 100 years, IT is, in a sense, catching up.

Now, you have something where you can even more readily drill into it to see that data -- and that’s huge.

Thomas: It's catching up, but I also think it's more of a reflection. It's reflection of a lot of the themes of the new style of IT. A lot of that is that consumerization aspect. In fact,  if you look at the last 10 years ago, the wide presence of all of these, your smart devices and your smartphones, is huge.

We have brought to most people something that was never easily accessible. And having to take that same aspect and make it part of how you present what you do in IT is huge. You see it in how you're manifesting it in your various service catalogs and some of the efforts that we're undertaking to refine and better the processes that underlie our technical service catalog to have a better presentation layer.

That technical service catalog will refer to what we've seen with Propel. It's an easier, nicer, friendlier way to interact, and people expect that. Why can’t this be more like my app store, or why can't this be more like X.

Is IT catching up or has IT become more reachable, has become more warm and fuzzy as opposed to something that’s cold, hard, and stored away somewhere? You kind of know about it, and perhaps the guys in the basement are the ones who are doing all the heavy lifting, and it's more tangible.

Gardner: Humanization of IT, perhaps.

Thomas: Absolutely.

Gardner: All right, one last area I want to get into before we sign off. We've heard quite a bit  about The Machine, HP unveiling more detail from its labs activities. It’s not necessarily on a product roadmap yet, but it’s described through a lower footprint, much more rapid ability to join compute and memory, and then  reduce the size of the data center down to a size of a refrigerator.

I know that it's on the horizon, but how does that strike you, and how interesting is that for you?

Ramp up/ramp down

Thomas: It's interesting, because it allows you to get to bit more ability to ramp up or ramp down, based on what you need, as opposed to you having x amount of servers and x amount of storage that's always somewhere. It gives you a lot more flexibility and, to some extent, gives you a bit more tenability. It's directly applicable to certain aspects of the business, where you need that capability to ramp up and ramp down much more easily.

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I had a conversation with one of my peers about that. We were talking about how both that and the Moonshot aspect and the ability to have that for a lot of the customer-facing websites, and the ability to tie them, in particular, the utility customer-facing websites whose utilization tends to spike during weather events.

While they don't spike all at the same time, there is the potential opportunity in the Mid-Atlantic of all the utilities spiking at the same time around a hurricane or Sandy-esque event. There's obviously a need to able to respond to that kind of demand, and that technology positions you with the flexibility to do that rather quickly and easily.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: HP.

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