23 September 2019
Smart Utilities: CIOs take the lead of digital transformation

Digital technologies have pushed organisations to review and transform their processes, workflows and business models. As a result, CIOs are more and more committed to innovation and growth.

According to the 2019 IDG State of the CIO report, 67% of CIOs are spending more time on strategist activities to support business development and go-to-market plans. While they still devote the most of their time to functional activities (85%), the strategist portion of the CIO agenda has been intensifying in the last year. A greater number of CIOs are dedicating more time and effort to driving business innovation (35% compared to 28% in 2018), developing and refining business strategy (23% vs. 21%). IT leaders are now more actively engaged in competitive benchmark analysis (21%), go-to-market strategies and technologies (19%), market trends and customer requirements assessments (16%).

This is particularly true in the utility sector, where digital transformation has had a disruptive impact in more than one domain. Most utilities are still far from being smart, as many mission-critical processes have not yet been fully digitalised. CIOs are at the forefront of this evolution, for instance managing the shift from legacy to standard-based systems, evolving business applications and tools, introducing smarter solutions for asset performance management, pioneering the Internet of Things and Artificial Intelligence.

Such a big change obviously requires a clear strategy, and a solid operational plan. Real-life experiences prove that the implementation of an Agile framework can contribute to a smooth, effective transition, especially when the utility is dealing with volatile, uncertain, complex and ambiguous (VUCA) generation, transmission and distribution situations. Moreover, CIOs will achieve superior results when moving from a one-stop-shop vendor approach to the selection of best-of-breed applications from multiple partners. Although it might sound more difficult, this can be a winning model to benefit from higher scalability, improved cost-efficiency, greater flexibility and a better performing technology portfolio. It can also accelerate new software implementations and upgrades.

To utilities that are willing to take one further step, Gartner suggests the so-called Bimodal IT approach: in simple words, it’s the practice of managing two separate but coherent styles of work at the same time, one focused on predictability and the other on exploration. This kind of strategy allows CIOs to ensure business continuity and full support, while testing innovative solutions to solve new problems or optimize specific functions, operations or processes. It’s a highly dynamic model, closely tied to the concept of agility.

In the Smart Utilities age, CIOs have much greater and more complex responsibilities than before. Since their role goes far beyond managing IT infrastructures, we should not consider them only as Chief Information Officers, but Chief Innovations Officers.