The report was broken down by industry cuts based on respondents form the survey. Power and Utilities leadership responded on the survey in six key areas which includes: Board priorities & investments, Strategy & operating model, Delivering value at speed , People & culture, Customer trust, and Analytics & insights
Power & Utility markets across the world are undergoing unprecedented transformation. Factors at play include: growth of decentralized energy, decarbonisation agenda, sector convergence, and rapid changes in consumer preferences.
Simultaneously, many regulators are increasing their scrutiny of the industry’s operational performance, rate of returns, and customer engagement practices. These factors are contributing to organizations in the sector closely scrutinizing their deployment of technology capital and focus of their expenditures, while investing in innovative technologies within constrained IT budgets.
This year’s Harvey Nash/KPMG CIO Survey calls out the sector’s higher need to drive increased operational efficiencies through automation and improve customer engagement. Specifically, energy retailers in contestable markets are having to respond to the increasing volume of retail customer churn, consumers getting more engaged through innovative solutions and empowerment with producing some of their own energy with solar and micro grids. The use of Internet of Things is a clear callout in the sector. Sensors of all types are being piloted and implemented with smart meters and networks to help with predictive analytics to pre-empt faults across networks and linear assets.
Projects that increase efficiency and save money are reported as having a higher priority for the industry. The drivers for this likely include: lower regulated returns, competition, and rapid changes in market conditions. Technology budgets for Power & Utilities are challenged more than other industries. However, disruption in energy markets is driving new initiatives that could give rise to new business opportunities leveraging storage, digital solutions, and convergence with others sectors such as transport. Improving innovation processes and execution over the next 3 years are vital to helping unlock new growth opportunities. Many boards are giving a cautious green light for their teams to increase collaboration with new energy start-ups and university research.
Business models for Power & Utilities have remained stable for decades. But this is changing with storage solutions, convergence with other sectors, and other disruptive technologies. Compared to other industries, the findings show that the sector responds slightly slower to changes in the business environment. The use of digital technologies are playing a key role in advancing business strategy. Digital enablement has simply become core to business strategy. The sector is responding to a strong adoption of cloud technologies for cost reduction and modernisation initiatives.
The technology operating models of Power & Utilities organizations are changing to deliver value at speed. Like other industries, agile project deployments are being used across businesses. Technology spend outside the IT function continues to grow and this trend holds true for all industries. Compared to others, the sector has an opportunity to deploy and scale new ways of working and disruptive technologies.
The search and need for talent in contemporary technologies are similar between industries. Energy companies are awash with data. Leading energy companies are drawing on these skills to work with their operational teams to work across myriad of asset management, network management and customer improvement initiatives. Similarly, tightening of national infrastructure needs has catapulted more cyber skills to work across technology and operational systems. Incredibly, 85% of respondents report that automation is going to impact up to 20% of the enterprise workforce in the next 3 years. This means that IT will need to get much better at deploying automation and helping drive process automation.
Consumers are being placed at the heart of Power & Utilities business strategies and priorities. Across the energy value chain, initiatives are being prioritized to serve customers to suit their preferences and provide essential services that are affordable, reliable and sustainable. An interesting finding is that 80% of CEOs feel that security and trust are core to the business model, yet only 25% of organizations report they are highly effective at delivering trust through IT products and services, and only 25% feel they are highly effective at managing key risk and security issues across the IT lifecycle. This disconnect is risky. For a Power & Utilities company to survive, transparency of security issues, dynamically managing risk, and building trusted products and services will be a key enabler to digital transformation.
Power & Utilities organizations have significant opportunities to maximize the value from the data they hold across the multitude of customer, asset management and operational systems. There are many projects and pilots afoot across generators, retailers and network businesses to derive greater value from their investments in data and systems.
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