The utility industry today is faced with unique and unprecedented challenges. As the pace of smart grid deployments accelerates, the challenge of effective business analysis and strategy development in a disruptive market environment will place enormous demands on utilities’ supporting information infrastructure. Related system and network performance requirements will have to scale to meet these requirements. However, many characteristics of the traditional utility – its “system of systems” value chain, its historical hierarchical, siloed, and engineering-oriented business and delivery processes, and its de-emphasis on information technology in general – present barriers to the business and technology transformations necessary to make smart grid deployments successful.

Enterprise Architecture (EA) offers an established methodology and discipline for meeting these challenges. Aligning business strategy, processes, and information assets, Enterprise Architecture can deliver better overall business decision-making, business-IT synergy, resource utilization, governance control, and speed to innovation. According to a new report from Pike Research, the discipline, methods, and tools offered by EA are essential to utilities’ efforts to create a long-term roadmap and adjust effectively to the future state of the smart grid.

“Significant transformation requires different modes of thinking and methods of problem solving,” says research director Bob Gohn. “Utility executives will have to make better business strategy choices more rapidly, requiring them to better understand and predict the outcomes of business choices before acting. EA offers a way forward for utilities to build a smart grid that can be responsive to rapidly changing industry conditions.”

At its core, Pike Research’s analysis finds, the challenge for utilities is to avoid a haphazard approach to smart grid implementation by avoiding the “accidental architecture” characterized by point solutions that were not planned with the notion of integration or future uses in mind. The likeliest outcome of such a haphazard approach is the utility’s architecting itself down a potentially blind alley. While the standards formulation efforts by the National Institute of Standards and Technology (NIST) and other bodies have been instituted to help mitigate these challenges, data standards alone cannot create an enterprise roadmap that accommodates the uncertainties created by deregulation, incorporation of renewables into the power grid, and increased consumerization of the power industry. The reality is that a utility must have mastery over its strategy and business objectives so that these new solutions can cohere in a controllable and purposeful business strategy. EA – and, most likely, only EA – can provide an overarching enterprise view that connects strategy, business architecture, information systems, and technology domains.