SDG&E seeks speed advantage in the cloud

San Diego Gas & Electric has taken an aggressive approach to its digital transformation, in part because forces beyond its control — climate change, the pandemic, and geopolitical tensions — have transformed the way it does business.

The San Diego utility known for its innovative drone imagery application that helped track wildfires on the West Coast began its migration to the cloud just over two years ago – just before the pandemic and the escalation of cyberattacks – and just now when Ben Gordon took the helm as senior vice president, chief information officer and chief digital officer at Sempra, the parent company of SDG&E and SoCalGas.

Today, 30% of SDG&E’s applications reside in the cloud, and Gordon predicts that will increase to 65% by 2025.

Utilities have not traditionally been early adopters of digital technologies, but the energy transition and the global upheavals of the pandemic and other events have set the stage for a new operating environment. “The utility sector, traditionally known for its business stability, reliability and predictability, now faces a decade of profound transformation that permeates every aspect of the business,” said Ethan Louis Cohen, analyst at Gartner. “Regulatory frameworks and operating models are changing, requiring utilities to innovate new ways of thinking, new business architectures and technologies to enable new capabilities.”

As a result, utilities like San Diego Gas & Electric are on the move, steadily migrating to cloud, analytics, AI and modernized computing environments, says Cohen.

SDG&E’s cloud-first transformation

Simply put, the cloud enables Gordon and his IT organization to do what was impossible with legacy systems.

SDG&E’s drone imaging program, for example, was a relatively quick launch that may not have been a realistic project in the past. “We have a large workforce and would have had to build quite a large infrastructure. But that would take us years [with the cloud] it only took us six to twelve months to do this.”

The CIO says SDG&E’s “Cloud First” initiative drives every aspect of it digital transformation.

“We see the cloud as a strategic advantage for the group. There are many changes in our industry, and we believe the cloud gives us access to new technologies and opportunities that we are trying to implement ourselves,” says Gordon. “Every time you move to the cloud, there’s less overhead and less management. The technologies and the speed at which we can iterate and make changes are significant.”

“Data center management is a very complex thing. Being able to push it with the native tools built into the Amazon platform really increases our delivery speed and time to market for any type of response,” adds Gordon.

SDG&E takes a best-of-breed approach to cloud and will use the platform that best fits the needs of the utility as cloud providers evolve. “We try to be aware of the capabilities that each cloud provider brings to the table and where their investment paths lie,” says the CIO.

Rebuild for the cloud

The digital transformation of SDG&E is not a technological refresh, but a comprehensive business change. This means that every aspect of the business is scrutinized and rebuilt for advanced applications and opportunities that the cloud offers.

Gordon notes that analytics capabilities that would take SDG&E years to develop alone are available through the cloud – the product of significant research and development by major cloud service providers.

The utility is building a foundational data layer for its entire organization running in the cloud and has completed a business process automation overhaul of all of its internal systems.

“All of our innovations and emerging technologies are built on top of the data foundation that runs in the cloud,” says Gordon, pointing to his Community Impact platform as an example. “That is a digital twin We use that to leverage multiple data sources to create a sort of emissions model for our fleet of service vehicles.”

IT is also getting a cloud overhaul

It is anything but business as usual for Gordon and his team of 570 employees and approximately 1500 contractors as they continually build more machine learning and AI models, implement advanced analytics for SDG&E drone imaging and expand the sensor fleet, build the foundational data layer, complete its digital twin and develop virtual rooms for its emergency center.

“As part of this journey and transformation that we are going through, we are also transforming the organization,” says Gordon. “Last year we switched to new ways of working. We have implemented an organizational structure and architecture that improves collaboration and the scaling of our technology services, and we have revised our architecture for all technology roles to align with three career paths.”

“We’ve also aligned our entire technology organization around products and platforms,” ​​he adds.

These steps aim to ensure that PG&E’s IT transforms at the same pace as the business, both in its technology and its approach to innovation, as “increasing regulatory, market and climate-related risks are testing our business and system resilience pose,” Gordon says.