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All eGovernment and eBusiness value chain efforts I know of have had their efforts stifled because of non-anticipation or underestimation of the significance of the impact of the Small and Medium Enterprises (SMEs). This has happened in Asia, Europe and North America. It has happened across all industries, and we should expect in the power industry. In the Pacific Rim, Europe and the United States, SMEs make up 99 percent of all businesses, according to U.S. Census data. The definition of SMEs varies slightly depending on the region: sometimes it is defined as less than 250 employees, and sometimes, at less than 500 employees. (In the United States, the definition is normally 500.)

The North American Electric Power Grid is composed of thousands of utilities, and many are small or medium utilities. The National Rural Electric Cooperative Association (NRECA) has 865 distribution cooperatives, each with an average of 14,000 meters and an average of 50 employees. Around 25 distribution cooperative members each average about 100,000 meters and about 200 employees. By definition, all of these are SMEs.

Generally eGovernment and eBusiness initiatives are driven by large organizations with information technology capability and staff to invest in new community efforts. However, the SMEs that make up the bulk of their business relationships or trading partners are generally slower to adopt necessary intercommunications technologies and can stifle the return on investment of the entire community's effort. The SMEs' lack of ability or choice to electronically participate in the movement of data within the supply or value chain frequently hampers the entire chain as it attempts to deliver the end product by making the product more costly and less timely. Eventually, SMEs will have to electronically interoperate with the entire value or supply chain in order to exchange the electronic data required to conduct business at any level in the supply chain. Otherwise, the entire supply chain suffers.

The big difference between power and other industries is that utility SMEs are not "upstream" with their communication, but they are normally the endpoint of the product or the power distribution network. In most historic supply chain efforts when the SMEs are the endpoint or downstream supplier of the product, the SMEs as a group must lead the effort to obtain their specific goals, not let the large enterprises (LEs) lead, as is often the case in other supply chains.

Some examples of SMEs in supply chains include:

• Automotive: SME delivers the seat covers for a car -- upstream from the car manufacturer
• Grocery: SME delivers specialty cheese dip in a region -- upstream from the store
• Logistics: SME offers cross-docking in a local region, not storage -- upstream from the cross-docking warehouse
• Power: SME distribution utility delivers power to the end user -- downstream from the generation utility

Utility SMEs are often not truly integrated into the network with respect to mutual sharing and communications across enterprises any more than the large utilities. So how much impact will their lack of integration have on the overall network? With regard to the general NRECA members, this may not be a problem since they seem to be ahead of many of the larger utilities in numerous areas internally with respect to SmartGrid technologies, as long as they are capable of purchasing COTS (commercial off-the-shelf) interoperable products.

The ultimate goal for all utilities is to integrate into the SmartGrid with other energy suppliers and utilities to the appropriate degree. In defining the SmartGrid, the National Energy Technology Laboratory's 2007 document, The Modern Grid Initiative: A Vision for the Modern Grid, notes these key points:

• It will heal itself. The modernized grid will perform continuous self-assessments to detect, analyze, respond to and, as needed, restore grid components or network sections.

• It will motivate consumers to be an active grid participant and will include them in grid operations and markets.

• The Modern Grid will resist attack. Security requires a system-wide solution that will reduce physical and cyber vulnerabilities and recovers rapidly from disruptions.

• The Modern Grid will provide the level of power quality desired by 21st century users. New power quality standards will balance load sensitivity with delivered power quality at a reasonable price.

• The Modern Grid will accommodate all generation and storage options. It will seamlessly integrate many types of electrical generation and storage systems.

• The Modern Grid will enable markets to flourish. Open-access markets expose and shed inefficiencies.

• The Modern Grid will optimize its assets and operate more efficiently.

These seven areas will require intelligent hardware and software to implement, which requires specific expertise to implement and support in an ongoing manner.

The members of the NRECA are excited about the SmartGrid but do not believe they can achieve it through revolution -- but only through evolution. Their focus is almost entirely on distribution, and not on transmission or generation. They have been working for a number of years in an evolutionary manner on the distribution portion to implement the SmartGrid. A sizable number, 70 percent, already have two-way AMR systems in place in their distribution networks, and more than 50 percent currently have SCADA systems installed. So while they are thinking in an evolutionary manner, they are currently revolutionary compared to many of the large utilities.

However, there are some very big differences organizationally: most SMEs have minimal to non-existent IT staff, and while extremely focused on the SmartGrid and interoperability, they do not have the technical wherewithal to achieve the benefits with internal resources.

Instead, they must rely on COTS products that easily integrate and interoperate to achieve their goals. NRECA's Bob Saint believes one of the biggest technical aids in this area has been vendors who have implemented and obtained conformance certification for MultiSpeak(TM). MultiSpeak has significantly reduced the integration effort between the GIS (Geospatial Information Systems), CIS (Customer Information Systems), OMS (Outage Management Systems), SCADA, Meters, AMR, and other back-office systems by standardizing the data exchanged formats, data meanings and message structures for the SMEs.

There is much more integration to the network than just the provisioning of electricity required to achieve the SmartGrid as noted in the bullets above. Control systems, SCADA, integration with other utilities and their appropriate interoperability are all needed to achieve the goals of the SmartGrid.

In conclusion, the utility SMEs are downstream in the power supply chain, unlike upstream SMEs in many other supply chains. In a downstream position, utility SMEs must lead as a group to accomplish their goals, while SMEs in an upstream position are usually led to accomplish other's goals. Many utility SMEs are well positioned to accomplish their goals because of their advanced internal implementation of technology.