Utility CIOs Should Adopt Multiple Strategies to Stay Afloat

by CXOtoday Staff    May 14, 2012

CIOs and IT managers in the utility sector are under tremendous pressure to cut costs, yet, facing unanticipated expenses associated with the deployment of smart grid technology, and should therefore consider multiple strategies, revealed a recent report from IDC Energy Insights.

Commenting on the report, Jill Feblowitz, VP- IDC Energy Insights said that CIOs working in utility organisations are compelled to cut costs but facing difficulty from the deployment of smart grid technology in IT infrastructure and continuing IT operations and maintenance. In this context, Feblowitz noted that the IT department should consider multiple strategies such as demand management, enterprise architecture, portfolio optimisation and even cloud computing to cut cost and complexity.

The report showed that CIOs/IT managers in utility organisations spend an average 2.5 percent of their revenue on IT compared to other industries where the average spends is 6.8 percent. However, achieving IT efficiency and productivity remains the top priority for IT leaders in this sector. Moreover the report noted that it is not only smart grid initiatives that is raising their IT costs, NERC CIP and other security requirements are also putting a burden on IT staff in this sector.

Based on the report, IDC Energy Insights has also come up with certain recommendations. According to the research firm, it is essential to develop a cost benchmarking approach to support the budget development. This will cover industry pricing and comparisons of software, hardware and other IT infrastructure.

According to IDC Energy Insights, IT departments should include performance metrics to bring about more business efficiency. At the same time, utility companies should have a demand management strategy in place to manage the demand of the utility for technology. This way, IDC Energy Insights analysts believe that CIOs/IT managers in the utility sector can cut cost drastically.