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Case Studies: Innovative Solutions

Driving transformation and savings in challenging times: Zespri case study

Driving transformation and savings in challenging times: Zespri case study

The year 2013 was tough for Zespri. The PSA virus was decimating its growers’ high value, gold kiwifruit crops across New Zealand. As well, a major initiative was underway to help growers replace existing cultivars with a more disease- tolerant variety, Sun Gold. The hope was that this cultivar’s vigorous fruiting qualities would also lead to strong production, that it would be outstandingly successful with consumers, and help sustain the growth of the industry. The Zespri board and executive had witnessed the devastation of the Christchurch earthquakes and the Japanese tsunami, and recognised a risk to their offices in Mt Maunganui and backup IT services in Tauranga. Zespri operates a global supply chain, and losing its IT services could leave crops unpicked, left in storage or stuck on wharves anywhere in the world. To compound the challenge, Zespri’s IT infrastructure was approaching end-of-life, and required a substantial capital investment to upgrade and enhance existing services. In short, the kiwifruit marketing, grower-owned company faced the following risks: Financial risk A substantial capital investment is a challenge to any business. The competition for funds is fierce. In this case of an IT upgrade there would be a multi-year burden on the balance sheet as the items depreciated, whilst uncertainty swirled around the business’ long term viability. Scale risk If the crop yield grew as hoped, then there was a need to quickly scale up to markets new and existing. If the crop yield fell then the IT investment would be oversized compared to the need going forward, with the burden sitting on the balance sheet. Either way, replicating the current IT environment was not the answer. Natural disaster risk Christchurch’s earthquakes and Japan’s tsunami had changed the risk equation for Zespri’s business forever. Natural disasters were now a very real threat to continued IT service in a 24/7/365 global enterprise. Were data centres, even if distributed across the North Island, really a robust answer? Global reach risk Offices across the globe required access to IT services, many of which were operated out of Mt Maunganui. These services were delivered via complex, secure VPNs (Virtual Private Networks). Technically this approach worked, but it placed all the business’ eggs in one basket. With a real business need for application access via mobile phones, tablets and roaming devices, VPNs seemed a very complex way to access services. The question came from above: I get easy access to Facebook and LinkedIn when I am travelling. Why not my business information? Support risk How does a New Zealand company deliver acceptable levels of support to cities across the world? What if the network connection goes down in Tokyo during the peak season? Who do you send? What service guarantees are there? Who gets priority in a major crisis? The solution options Keep things as they are: unacceptable. After the earthquakes and the tsunami, having two data centres within the same region was now seen as just too plain risky. Moving to new, geographically separate hosting facilities: marginal. Moving equipment and services into a hosted environment didn’t solve the problem of scaling up and down, or offer a financially sensible option. Commercially, Zespri would have to upgrade the IT equipment to have it hosted, or sign up for a fixed term to have a supplier own and operate it on their behalf. Shove it all up into the cloud: scary. But that is exactly what they did. Growth enabled Now three years later Zespri is in growth mode. The gold crop is producing record numbers and is in demand across the planet. The IT systems scale up and down as seasonal and market demands require, consuming services as needed and switching them off when not required. Costs are no longer tied to capital investment. The IT financial model is consumption-based with close monitoring and management of expenses using a combination of financial analysis, real time online analytics provided by Total Utilities and constant reappraisal of the business’ requirements based on the insights delivered. Access is via a stable and secure data network, delivered by a world class provider. The supply chain resides in multiple Microsoft Azure data centres globally, ensuring business continuity. This managed, outsourced Azure environment delivers critical supply chain services globally. Coupled with Office 365, Skype for Business and SharePoint, Zespri is competing for market share on the world stage. It is able to scale with speed, delivering a robust and repeatable IT environment as new offices open and new services emerge and evolve, and all this at a lower cost per tray of kiwifruit than was previously thought possible. No innovation comes without a new set of risks and challenges though. As with international roaming mobile data services, bill shock can be an issue. In my next post, I will address managing and monitoring consumption-based IT services locally and in the public cloud. David Spratt is director of ICT at Total Utilities. Email david@tumg.co.nz

Utilities experts net good result for fisheries company

When you have a global supply chain delivering premium live seafood and chilled fresh fish to domestic and overseas markets, there is little room for communications, business process or system errors. Aotearoa Fisheries Limited is the largest Maori-owned fisheries company and it’s been harvesting, processing and delivering live, chilled and frozen seafood since its establishment in 2004. It harvests, processes and delivers chilled, canned and frozen seafood and ready to eat products to over 20 countries. For the past five years Aotearoa Fisheries has been working with utilities procurement specialists, Total Utilities, to ensure that their telecommunications/ICT, natural gas, electricity suppliers are providing high levels of service at the best price. Independent ICT Strategic Review When David Spratt, Director of ICT at Total Utilities, carried out a strategic review of Aotearoa Fisheries IT architecture, hardware and management in 2015, he brought 30 years of experience in senior ICT roles to the table. Aotearoa Fisheries had recently moved to a new IT provider supplying Infrastructure as a Service (IaaS), with one division retaining and maintaining its own servers. The business was interested in comparing the two approaches as well as benchmarking costs against other providers in the market. “The outcome was a comprehensive report which compared our costs with market prices and included a number of helpful comments and recommendations,” said Angus McFarlane, Group Information Systems Manager. “As part of the process David went to great lengths, interviewing both the IT support company and IaaS provider as part of the process. “It was good for our CFO to gain an independent view from the experts. The review was in-depth and thorough. It was definitely not a political or surface report and added a lot of value to our organisation.” Negotiating the right telecommunications contract had the potential to be equally complex. At Aotearoa Fisheries service delivery is just as important as price. When there’s half a tonne of live crayfish to land, being able to communicate quota availability and landing location to the skipper is paramount – not to mention ensuring that a refrigerated truck is ready and waiting to meet the boat. Any logistical delays can be costly. When Aotearoa Fisheries called Total Utilities in to manage their latest telecommunications RFP the result was quite dramatic. “We decided to move away from the incumbent provider to a new-generation network aggregator that is very customer service-centric,” continued Angus. “The broad experience that Total Utilities brought to bear made a significant impact on the process. We value the fact that they possess a network of contacts across the whole utilities sector but have no allegiance to any one supplier, and therefore can provide that independent market assessment.” Aotearoa Fisheries worked with Total Utilities to create a decision matrix which weighted a wide range of factors like account management, adoption of new technology, reporting and invoicing. Angus commented. “We wanted a partner to see us right for the next five years so we couldn’t leave anything to chance. We have to be agile in order to meet the demands of our markets and products – if we’ve got boats fishing from a new location we need a robust network service to get the catch to the right place, live and in perfect condition.” With over 25 years of experience in ICT and particular expertise in telephony, unified communications, data networking and managed services, Mike Ette at Total Utilities was in a strong position to help. “We are really happy with the outcome,” confirmed Angus. “The next key phase will see us moving everything over to our new supplier.” “Total Utilities don’t bring multiple layers to the engagement. We deal with senior people who know what they’re doing. They are the ones actually doing the work - we don’t get passed off to a junior,” he stressed. “Total Utilities people are very easy to do business with and they know how to get to the crux of the matter. They make a real effort to understand our business and market.” “We can trust Total Utilities, they are good value and very responsive. They are able to view the big picture from a strategic point of view and apply their expertise. They don’t just deal in theory but are used to applying real world solutions. If you just need an organisation to get into the nuts and bolts of your IT or telecoms infrastructure, Total Utilities is definitely the right company.”

Achieving Client Success

Emmy Seccombe
Te Uru
Paul Laing
Red Stag Timber
Haydn Randall
St Bede's College
The Fourth Industrial Revolution

The boundaries between physical, digital and biological worlds are breaking down — giving way to a new world of computer based business known as cyber-physical systems. These cyber-physical systems are characterized by the merging of physical, digital, and biological realms in profound ways. Artificial intelligence (AI) serves as the primary catalyst of this transformation. Klaus Schwab, Chairman and Founder of the World Economic Forum wrote: We are at the beginning of a revolution that is fundamentally changing the way we live, work, and relate to one another. In its scale, scope and complexity … the fourth industrial revolution is unlike anything humankind has experienced before.   We have all heard this kind of hyperbole before. So why should this matter and what are local companies doing to address the issues? Beyond hyperbole It matters because we have already seen our lives changed by these tools in the most dramatic fashion. The last presidential election in the USA was directed affected by the use of AI. These tools were used in identifying and directly addressing those electors who were undecided or felt strongly about key issues. These powerful compute engines, combined with good old-fashioned phone calls and door knocks, meant voters were either encouraged to vote by “people like them” who knocked on the door (e.g. young mum talking to young mum) or to not vote through messages directed directly to them about the futility of “rigged” elections. Leveraging AI in the New Zealand Business Context Politics and business are uneasy bedfellows so I will get back to the brief. How do Kiwi companies respond to international and local competitors who already understand and are leveraging artificial intelligence and bringing it to our competitive landscape? Let’s start with energy. It is one of the most fundamental parts of any business. Most of us just focus on getting a cheap price for electricity or gas and then move on to running the enterprise day to day. This approach just won’t work when machines are making the micro-decisions that can mean success and failure. International Competition Consider some of our major New Zealand computer companies. They are in a life or death struggle with public cloud providers like Microsoft, Amazon and Google. These gigantic multinationals have access to all the tools mentioned above and even deliver them “as a service” to companies everywhere. Competing with organisations like this is not just a question of having good people or getting the best price for inputs. It is about innovation and very, very careful monitoring of all the inputs and outputs, including energy. One of the most brutally competitive battlegrounds is over the provision of data centre services to the business market. In the past ten years companies like Datacom and Spark have invested hundreds of millions of dollars in state of the art datacentres. These datacentres require huge amounts of energy to keep them running. New Zealand's advantage New Zealand has a natural advantage because over 80% of our energy is created via renewable means. In the years ahead this advantage will become a cost and strategic advantage. As the forth industrial revolution unfolds New Zealand’s energy advantage that will drive our strategic advantage in data centres. Don’t believe me? Microsoft recently announced that a key new measure for its Azure data centres was energy inputs to data outputs. Thus Microsoft has directly linked energy usage as a means to define its compute power efficiency in terms of services delivered. So what are our Kiwi companies doing to compete on this stage? Both Datacom and Spark use tools like artificial intelligence to monitor, control and measure their energy inputs. Historically it was simply a case of installing a few sub meters and a cost calculator (macro energy measurements). Today these companies aim to measure and monitor right down to the lightbulb (micro monitoring). The rise of the internet of things has made this ability to micro monitor even greater. As new data centres and factories are being built across the country, architects are being required to include in their plans, tools and products that embed internet of things, artificial intelligence and micro monitoring in the very fabric of the design. Companies building factories in this country that do not think of micro monitoring of energy use as a strategic tool should be reminded that in the last few decades we exported more manufacturing jobs overseas than we created in all of IT. Ignorance of the strategic possibilities of micro energy monitoring is wilful blindness in a world where the Fourth Industrial Revolution is not only upon us,  it is rapidly transforming the competitive landscape we work in.

Is New Zealand business ready for Artificial Intelligence?

A decade or more ago I used to defeat chess playing computers for a small wager. It was simple stuff really – just find a weakness and ruthlessly exploit it – in my mind computers were basically binary and thus “stupid”. Today chess masters are fair game for computers. My party trick is ancient history and I am frankly a little scared about what happens when computers can outsmart humankind.  Terminator anyone? Some would argue that we have nothing to fear. Others feel exactly the opposite. Stephen Hawking recently wrote “The full development of AI could spell the end for the human race”. Elon Musk – founder of PayPal, Solarcity and Tesla called it “Summoning the demon”. The impact of AI in New Zealand Putting aside visions of Arnie and terminators for the moment we should also look at the impact that AI might have on New Zealand businesses. Most kiwi business owners and leaders are constantly aware of the need to innovate, optimise and seek competitive advantage by being cleverer than the guy overseas. Thus, we find ourselves asking: How do we get the best out of what we have? How do we employ better people and make them more effective? How do we use the limited space we have at our disposal? How do we get the machines that we paid heaps for to be more efficient? The questions are endless but sadly the time and money we have is not. I cannot count the number of times I have spoken to business people who know what needs to be done to make companies better, faster or quicker but simply don’t have the spare time to do it. Here is where Artificial Intelligence comes in. It not only analyses the data to answer the question but it can also act on the insight, often in real time. Don’t believe me? How do you think Amazon remembers your book purchases and even title searches and then suggest others that may be of interest? AI also allows Amazon to identify your location, match it to the right supply chain service to execute the sale and delivery via the cheapest and most direct route. Amazon's arrival in Australia is causing tremors across the whole retail industry there. It’s not just books they sell, you name it, they have it, at a price too cheap to resist. At the heart of this frighteningly effective, multinational monster is Artificial Intelligence We have always had AI – it has just been too expensive to make that much of a difference. Now it’s available as a service from the likes of Google (Google AI) and IBM – (Watson) and numerous clever startups. The availability of world class AI a via Software as a Service model means that we don’t need supercomputers and massive budgets to take advantage of AI in New Zealand. Next month I will describe examples of how AI is being used to optimise business’s use of energy and compute resources to save money and compete.

New Branding and New Services

Intelligence without ambition is a bird without wings. Drawing is the honesty of the art. Salvador Dali Today Total Utilities announces its new branding. Over the last 18 years we have worked hard to assist companies in controlling consumption and cost. It's an exciting day for us and we are proud to share this with you. From today you'll see a change in the way we look, including our new ribbon logo. The spherical shape represents the whole as we take a 360 degree approach to understanding our clients and their utility requirements, whether it be Energy, Waste and ICT or Insights, Strategy and Solutions. What doesn't change is our desire to create a sustainable future for New Zealand businesses and how they manage their utilities by continuing to deliver ongoing value for our clients. We continue to work hard to provide new services to assist our clients such as Energy Monitoring and Targeting through wireless non-intrusive energy senors, Cloud Computing Analytics for consumption of computer services and qualitative and quantitative reporting aligned to overall financial strategy. Total Utiltities About Us Presentation We remain committed to delivering a personalised service and assisting our clients navigate a rapidly evolving commercial market place by underpinning strategic thinking. I would like to thank our existing clients for your continued loyalty and confidence in our company. To prospective clients, I hope that you will partner with us to discover real world solutions for sustainable utility consumption and cost optimisation.

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