In this edition of the Digital Change Podcast, our host, CEO of Innovation Platform, David
Swank, sits down with special guest, Brian St. Jean, to discuss the importance of having a solid digital foundation when utilizing sensor technologies and big data. Read the full transcript below.
David: Welcome to another edition of the Digital Change Podcast. We're glad you have joined us. Today, we're going to talk about digital foundations, and I would even add to that, really talk about how important it is to begin to get our data structured as we think about Smart Cities, Smart Developments and Smart Buildings. We are so fortunate to have with us, I believe one of the experts on this subject matter in the industry, on a global stage for that matter, Brian St. Jean from Pitney Bowes. Brian is the Partner Director for Pitney Bowes. Brian brings a wealth of knowledge and experience in the overall enterprise software area, customer relationships and the importance of these tools in these sectors that we're talking about. Brian, it's great to have you with us, today. Thank you for being here.
Brian: You're welcome. Glad to be here.
David: Well, we're going to really unpack this today, Brian, and looking forward to doing so, as we talk about these digital foundations. I've had the opportunity and pleasure of working with Brian for over six months now. We're fortunate as the Innovation Platform to have Pitney Bowes’ convergent architecture as an underpinning architecture for the Innovation Platform. I hope our audience will really understand what that means, today. Brian, we talk on this podcast each week about how important it is to have a digital AIM. We've used that word, AIM, in the context of how important it is to be able to do things that are achievable in this digital age. How important it is to create impactful solutions and results. And how important meaningful experiences are. I hope, today, we share that a little bit. We all know that disruptions are happening to every sector because of the digitization of everything. The magnitude of this disruption is sometimes being somewhat underestimated. We're going to spend some time with Brian, talking about specific use cases of this architecture that Pitney Bowes provides for particular use cases. I was intrigued by a recent report from McKinsey and Company that talked about the value of structuring data that ultimately leads to analytics and how you look at it from what it could do in terms of increasing value, decreasing cost, and so forth. They [McKinsey and Company] broke that down as it related to transmission and distribution and talked about the idea of how structuring data and advanced analytics could lead to almost 12% savings in the O&M, operation and maintenance. That 10% gains can be made by digital enablement and 3% gains in process automation. Then when you look beyond the meter, if you will, and begin to look at the customer, advanced analytics could mean 9% value propositions, digital enablement being 12% and, again, process automation being 3%. I share those numbers because I know, Brian, where you sit, you're actually seeing these numbers.
David: You're experiencing this. You're sharing this with your clients. So, I would start by sharing with our audience, again, that we're going to talk about use cases that deal with data collection, predictive maintenance, real-time reporting and forecasting. If you could, Brian, in the context of what I have shared today, begin to elaborate for our audience just how real these numbers are and how real they are to these particular use cases that we're speaking of.
Brian: Absolutely. You know, I think there's something you said at the beginning there that is so critical that people tend to forget it when you were talking about the AIM side of it and understanding that there is so much data that you can capture- and I know there's a lot of people that don't capture enough- but when you're planning as a utility or anybody down that path where you say: ‘I'm going to start capturing more data’, you've got to be smart about what data you're capturing. Just capturing data for the want of capturing all your data sounds really good, but you need to be focused on what you're trying to do. I think these numbers are nice because you sit there and go: ‘Hey, here's something I want to focus on. Here's a direction I can go. So, let's collect data that's going to help me turn that data into something I can action and gain some wisdom from’. Then decide: ‘Okay, great. This is the direction I need to go and now I know how to measure it again.’ Then you can start seeing: ‘Hey, I'm heading towards these kinds of numbers.’ So, I always look at it from there's sort of a growth direction we would go. We've got that data collection side of it -understanding the sensor readings you’re getting, understanding the power out that's running through a line, or whatever those data points are that you're trying to figure out. Be able to really focus on: ‘How do I maintain the assets appropriately.’ There is over maintaining, and we are there a little too often. Then you start going the other way. You're under maintaining. You're not going often enough. You got power outages now- I'm going to try and talk in electrical utility- so, you have power outages that are going on and you’re losing customers’ faith in yourselves, right? The way to get there is understanding based on the history of what's happened. We [Pitney Bowes] can help out with that quite a bit. That, to me, is one of the big focuses. It’s almost a maturity level that you've got to start at the beginning and go: ‘Let's get the data, first. Let's figure out what our predictive maintenance is and then start reporting on it and then start forecasting for the future.’ I think those are the key pieces that people forget. They want to get right to: ‘Hey, let's start forecast everything.’ Well, you can't run before you learn how to walk. You know, it's a really trite saying, but it is so true sometimes because the people that are in the executive positions are sitting there going: ‘You know what I want? Good predictive maintenance.’ The people down in the trenches, so to speak, are sitting there going: ‘Well, we need to data first.’ But getting that data and getting it in a way you can use it and it’s actionable, that's the real trick for sure.
David: That's great stuff, Brian. I think when we talk about digital foundations, and you use the term digital maturity, it really is important to understand you have to crawl before you walk and walk before you run. As you think about this whole jump-starting, this process of smart anything and attacking the digital components, it is so important that organizations and communities jump start this process. And yet one thing, I think, for incumbents, in particular, we're seeing in this digital era a lot of them are losing out to what we call insurgents because insurgents sometimes don't have the baggage or the old ways of thinking. So, you have insurgents who probably understand the power of data. How to leverage data. I think it's important that we talk, for a moment, about the window of opportunity that is in front of those who are currently incumbents. Who have the ability to take current assets and really leverage them for greater value. I know you said it earlier about getting data for the sake of data but being that we have these assets and being that we can make them digital, we now have the ability to really start thinking about those assets in a totally different way. You know, it's interesting, again, in that report I read from McKinsey and Company, the opportunity for incumbents to get ahead of the pack on digitization can be narrow is what they stated. It said by the time industries near the 40% digitization mark, digital leaders have already secured large market shares.
I think when we look at the utility sector and we think about where solar and battery storage and Smart Buildings and microgrids are going, again, that's another sector that needs to really look and see how do we as an incumbent take advantage of our current position and begin to look at our assets in a completely different way. So, in using the PB system share with our audience the way in which they can use this convergent architecture to increase their competitive position.
Brian: I want to go back to the smart assets we're talking about and I think the challenge for anybody who's already an incumbent, to use your words there, is they're dealing with let's say an equipment vendor who is now discovering that they need to start putting smart sensors in their equipment and everything. There's sort of an ecosystem that's already there that they're a part of. They're dealing with vendor A. Vendor A is slowly building something that is a little more digital and that they can start using to gain information, but they've already got a relationship. It's easy to say: ‘let's just wait for them.’ Unfortunately, waiting takes time. There's somebody out there that already has it. It's okay to be best of breed and pick different vendors to do different things because like you said, if you wait this is going to just zoom past you so fast and there's going to be people that are now already have exceeded what's happening out there. So, that's always my concern when I talk about the smart side of it. But there are ways to add sensors to existing technology and learn from it and get that data. You've also got to be careful because Smart City or smart anything is sometimes the big and shiny. People get very excited about that, but unfortunately, a lot of these sensors come with sort of a siloed approach. Sensors are out lighting, and they've got a lighting bit of software. They only want you to use that. Sensors around- let me just pick something random- storm drains, let's say, have their own little software package.
Our outlook [Pitney Bowes] has been a sensor is a sensor. Let's stop thinking about it as part of a software ecosystem. The vendors like to sell you that software ecosystem and they want to lock you in, right? We don't want to lock you in. We look at it as let's tie all these sensors together through a standard platform so that whether it's a sewer sensor, a light sensor, a sensor on a digital line somewhere, or a power line- whatever it may be- it's going to be able to get drawn into the same system and now we can draw correlations between them. Now I can sit there and say: ‘Hey, how come I have power outages in this area when the storm drains fill up? Well, it’s because I've got a buried line that I didn't know was exposed to the water. Whoops! I've learned something new here now.’ Just putting the sensors on to learn things that you already know, doesn't gain you a lot. It's taking that data and then hooking it with things you don't know. One of the approaches that I know I've shown you before, is let's take a look at a city, overall. Look at the whole infrastructure that's there and look at everything from here's the kind of people that live there, here's their geodemographics, here's what the crime is like in that area. Let's tie all that data together with the infrastructure and now we can sit there and say: ‘Oh okay, this starts to make sense. I see why things are happening the way they are. I see why in this area I replace more lights than I do anywhere else. Or I see where maybe I should have more lights in this area.’ Because now you're looking at a city as a whole instead of just having a narrow silo view of your own assets. That's something the Innovation Platform does. We can tie those things together and get real information now, actionable information.
David: Brian, you're speaking of something I think is really at the core of this Innovation Platform. It’s this kind of open architecture, this open platform, this ability to have what we've called an agnostic system that can actually look at sensors coming from anywhere. I truly believe that is one of the real pulses of the Innovation Platform.
David: I want you to elaborate on that, but before you do, I would just introduce our audience this convergent architecture and now Pitney Bowes has created this confirm IoT.
David: I’m really excited about what that means beyond just the traditional assets. So, could share with the audience in even a little further depth about this open platform, this agnostic system, this ability to be a system of systems, and why Pitney Bowes is taking this next step with confirm IoT?
Brian: What drove us is we were part of a lot of the smart initiatives that were happening. I know people go: ‘Pitney Bowes, I know them from mail.’ Most people don't know that we have this really large software team that have done things on Facebook and Twitter. It's a lot of our stuff in the background there, but we've always stayed in the background. This was our chance to come up and show that we've been doing this, and we’re built into most big platforms already, you just don't know. So, we're getting the word out a little bit more, which is good, but also an understanding of how we build these pieces and how we hook them together as we look at things as a as a larger platform. Let's say I'm in an operations center. I'll use lights as an example. This light has gone out, so I just want to know the status. The problem is with a lot of the vendor systems that little light sensor is sending something every second. ‘Lights on, lights on, light works, light works.’ It doesn't stop, right? So, we set up a buffer in between the two where it will store that historical information, but let you just query it and figure out what's the status. Then I'm not as a utility or something having to store millions and millions of data sets. And we'll store that for a year longer, if you want to keep that information, so that a data scientist later could come in and say: ‘Hey, I want to look at trends.’ Great, you can do that, but you probably don't need that into your day-to-day operating center. You're not going to go put this massive computer to store all the data. You don't want to do that, right? So, that's one of the pieces we're doing. Also being able to tie all those sensors statuses together and show them so that you can see what's going on.
A great example I saw, recently, is in one city they're using sensors to show the heights inside of the water drainage areas. At the same point, they were tying it in with the police to be able to say: ‘Hey, it's raining this much right now. We know these [water levels] are starting to get close. Let's block off those roads.’ Another great example, somebody showed me a picture of an intersection and said imagine if a truck went off the road right here and in the way, there was a fire hydrant, a gas main, a traffic light, and an electrical pole. From the city's perspective, let's say I'm the utility: ‘Hey, my pole went down. Great, I got to go fix the pole.’ Some traffic system is also picking this up going: ‘Hey, the traffic lights down I need to deal with that.’ Also, the gas lines down so the gas company's going to come out. The reality is, the first people that should have been called we're the police. We sometimes miss that because we're not all tied in the way it should be. I mean, I'm talking ‘Holy Grail’, wouldn't it be great if we all talked to work together. When we start talking Smart Cities those are the things that people care about. I find sometimes the focus gets changed a little bit when people talk smart city. They sit there and go: ‘I want to find the best parking spot’. Yeah, that's what the citizen wants, but what cities want is things that help their citizens. A lot of that is going to be utility driven because they're going to care that they get the power that they need, they get the internet access, they need to get all those pieces they want, and it works together. It's not about the big and shiny. Every time I see those news ads about this new, shiny Smart City. You're going to have a robot that delivers stuff. No, you're not. I want the stuff that we already have to work better and grow better.
David: As I hear you say this; I think what always differentiates companies is the vision. What you're describing and what really attracted this whole Innovation Platform to leverage the Pitney Bowes architecture, was not just the architecture, but was the vision you just shared. What you mentioned being ‘the Holy Grail’. The reality is we build assets for people and for quality of life.
Brian: That’s true.
David: I think as stewards; we can never lose sight of that. It's so easy to lose sight of our why.
Brian: It is, yeah.
David: In this case, our why is we build assets to improve the quality of life of the people we serve. I love the fact that this is the vision of Pitney Bowes. I applaud that and I'm looking forward to being able to articulate that as we move forward. Brian, this has been just a great session. I hope that we can continue to come back and engage you because the insights that you began today require even more unpacking as we think about these different experiences. You know, we talked about meaningful experiences and you just described a number of those meaningful experiences. Before we conclude, I really would like for you to share any closing thoughts and I'm a continually reminded that today over 92% of cities believe that they're going to be dealing with Smart City initiatives. I think as cities do, they need to begin to engage as to what framework or foundation is going to allow them to achieve that. We started this session talking about the digital foundation, so if you would again share with our audience just how important that is as they begin this journey.
Brian: I agree with you completely. The foundation is the key. To use an example: you're not going to go build a high-rise and not have that foundation solid or that high-rise is never going to work for you. It's the same with Smart Cities or any type of digital assets. If you don't think about, in the beginning: Here's the direction I want to go in the future. I need to be as open as I can be. I need to find ways that I can grow that foundation so that it's easy to use later down the path and deal with people that care about doing the right thing. To me, probably the most important thing is you plan that foundation. That's something we can offer them. The Innovation Platform does that for them. I know we’ve been working together now for a while on this and this is the direction we need to go to break down some of those silos and make things actionable for people.
David: Outstanding. Well, Brian, its been great to have here today. I would like to close by saying that I love the statement: ‘challenges are what make life interesting but solving those challenges is what makes life meaningful’. I really think the Innovation Platform, and from listening to you today, is really about solving some complex challenges in Smart Cities, Smart Buildings and Smart Places. We have such an opportunity if we plan right and start right. Brian will be back with us again in the future and we look forward to continuing to delve into these subject matters. Brian, again, thank you so much for sharing some of these really great insights.
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