- Strategically enable it by driving agility, operational efficiency, customer centricity and innovation. This is being achieved through fit for purpose IT operating models, interoperable IT systems and adoption of pay as you go models. Customer experience and innovation is being achieved through omnichannel communication, data analytics and personalization and digital platforms.
- Drive cost optimization by focusing on the priorities of cost management, resource optimization, strategic IT sourcing and ensuring value from IT investments. Similarly, there are expectations from CIOs to drive operational efficiency by using process automation, advanced analytics, and AI to maintain a competitive advantage.
- Ensure resilient security posture, compliance with evolving regulations, dependable IT infrastructure and predictable business continuity planning by modernization of aging IT infrastructure, compliance management systems.
- Improve sustainability postures (incl. energy transition and carbon footprint reduction) by leveraging modern IT solutions to facilitate integration of renewable energy sources and enhance grid efficiency through smart technologies and green IT initiatives.
Actionable Strategies for the CIOs
1. Driving Strategic IT Enablement
Strategic IT enablement is enabling energy and utilities enterprises to take the right technology decisions by ensuring IT strategy truly reflects the business strategy. The focus is on improving customer engagement, driving omni channel experience, leveraging analytics to drive personalization and integrating multi-velocity data sets (across IT and OT) to make informed decisions across the value chain. We are consistently seeing application of four strategy levers by large enterprises:
- IT strategy refresh & business-IT alignment: Align business & IT strategies including adoption of digital, omnichannel customer engagement platforms, promotion of interoperability technologies / use cases across IT and OT (AMI, grid monitoring and control), and inclusion of data analytics and personalization (customized energy plans, promotions to reduce churn).
- Digitalization: Digitalize and automate business processes across areas such as customer engagement, metering and billing, plant asset health monitoring and preventive maintenance, QA/QC, outage management and workplace safety.
- IT Operating model realignment: Focus on multi-speed IT by breaking down silos in areas of standardization (shared service centres and platform delivery and maintenance) while promoting closer alignment to business needs in areas of differentiation (customer engagement, metering and distribution).
- Change management and adoption: Manage change and drive adoption of various IT and OT initiatives through structured training programs, interim assessments and incentivization.
With right technology decisions being taken, the focus shifts to scaling decisions in a fast yet effective manner. Energy and utility enterprises are increasingly leveraging multi speed IT which embeds part of IT closer (or within business units) and the remaining more central at an enterprise level. This ensures closer proximity to business operations while also standardizing where it matters.
2. Enabling Cost Optimization and Operational Efficiency
Similarly, there are four strategic levers being deployed by CIOs to optimize costs and improve operational efficiency. Increasing cost pressures and need to consistently provide shareholder value is pushing energy and utility enterprises to look for avenues to optimize costs, increase efficiency and ultimately improve margins.
- Cost transparency and chargebacks: Drive cost transparency (can be extended beyond IT to any of the categories) and then effectively charge back to business units to communicate value and optimize central IT cost pool.
- Strategic IT sourcing: Optimize costs (can be extended to other categories) by segmenting suppliers and strategically sourcing categories with select suppliers to drive economies of scale & optimize procurement interventions.
- Operational efficiency: Leverage process automation and AI for efficient operations across the value chain (Digital twins for predictive maintenance of assets, CRM, billing, contract management, and financial management).
- Investment based culture and value monitoring: Prioritize investments in IT through a competitive evaluation process and then rigorously monitor derived value from IT initiatives, and re-pivot if necessary.
IT is increasingly being looked upon to not only contain its own costs by reducing unit cost of IT (without compromising on the quality of services) but also support larger enterprise-wide agenda to drive operational efficiency and throughput. Foundational levers such as cost transparency and supplier identification, and category segmentation enable enterprises to take the right decisions followed by scale out levers of operational efficiency and value realization to ensure better return on investment.
3. Strengthening Risk Management & Compliance
Risk management is an increasingly important, yet most widely debated theme in view of increasing technological advances, regulatory controls, geo-political constraints and cyber security threats. We are consistently seeing application of four strategy levers by large enterprises:
- IT portfolio rationalization: Evaluate and optimize IT portfolio on an ongoing basis through right disposition strategies including retirement of EOL / EOS systems, modernization of legacy and consolidation across multiple sites to contain proliferation and associated risks.
- Cybersecurity strategy and control: Define and implement cybersecurity strategy and associated controls including advanced threat detection, network segmentation and audits for SOC and NOC to ensure resilience and reliability of IT infrastructure.
- Business continuity planning: Develop and maintain robust BCP & DR plans in line with business priorities, impact assessment (BIA) and regional standards to minimize impact of disruptions.
- Compliance Management Systems: Enhance compliance to evolving standards such as NERC, FERC and ISO and leverage leading GRC systems and dashboards for near real time prioritization of risk remediation efforts.
Effective risk management is enabling enterprises to take right decisions by optimizing IT portfolios across applications, data and infrastructure by assigning right disposition strategies to keep the portfolio current, promoting interoperability and defining cyber security strategy by implementing effective controls across HQ and plants to thwart planned and unplanned IT security incidents which can jeopardize critical infrastructure. With right technology decisions being taken, the focus shifts to scaling decisions in a fast yet effective manner. CIOs are focusing on refreshing business continuity and disaster recovery planning to ensure its relevance to changing business priorities, operating models and expansion plans. In addition, there is an increasing reliance on compliance management systems and dashboards to continuously monitor compliance across domain, regulatory & data privacy standards.
4. Prioritizing Sustainability and Energy Transition
In alignment with global sustainability initiatives, CIOs are leading the way in integrating renewable energy sources, optimizing grid systems, and implementing energy-efficient technologies. With a focus on green IT initiatives such as energy-efficient infrastructure, green datacentres, and energy-star compliant systems, CIOs are supporting the transition to net-zero goals. We see consistent application of two strategy levers:
- Green IT initiatives: Adopt sustainable tech practices such as energy-efficient infra, green data centers, energy star compliant systems, on demand provisioning, virtualization, DC co-location, co-hosting & e-disposal. In addition, adopt sustainable workplace practices including shared service & CoE creation, job rotation & IT process optimization.
- Sustainable Ecosystem: Ensure alliances with third parties including professional, climate change & academia groups in areas like carbon emission tracking, monitoring, regulation, trading and certification to build an ecosystem around sustainability and promote awareness among customers, suppliers and partners.
Integration of smart technologies such as Digital twins, smart grids, and advanced power systems is central to transforming energy management. CIOs are using these technologies to improve grid efficiency, predict maintenance needs, and seamlessly integrate renewable energy. Additionally, aligning with third-party alliances focused on carbon emission tracking, regulation, and certification helps promote awareness and build scalable ecosystems across stakeholders.
Partnering for Success: Building a Future-proof IT Strategy
As enterprises strive to meet evolving business demands, CIOs face the dual challenge of managing legacy infrastructure while driving innovation. Under pressure to deliver scalable solutions that align with short—and long-term goals, many CIOs balance operational efficiency with the need for transformation.
To overcome this challenge, CIOs must take a strategic approach that aligns technology with business priorities. This involves simplifying complex systems, modernizing infrastructure, and being proactive in adopting solutions that can grow with the enterprise. By carefully managing resources and embracing flexibility, CIOs can improve agility and ensure that IT investments support long-term success. Additionally, fostering collaboration between IT and business teams is crucial in identifying areas of improvement and aligning efforts toward common goals.
