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01
Cultivate AI maturity
The Challenge
Increase the pace of AI adoption in utilities.
AI promises to increase revenue, create operational efficiencies, and control costs, but adoption has been slow within utilities. Generative AI is getting attention but its usage is limited. AI is an enabling technology that will take years to mature, and IT leaders must start preparing their infrastructure and capabilities now.
Why It Matters
Prepare for AI success.
AI is on every senior management wishlist due to its incredible potential. To be effective, AI requires high-quality data. Organizations must prepare for AI success by tending to their existing data and ensuring it is ready for future AI applications.
The Solution
Build a target-state architecture
Use best-practice building blocks by leveraging existing data, business metrics, and defined processes to create a solid foundation for AI adoption and a target-state architecture.
Identify roadmap capabilities
Understand what is already in place and what needs to be developed or acquired to support AI initiatives. This helps to identify roadmap capabilities within the current portfolio of technologies and vendors.
02
Unite IT and OT
The Challenge
Bridge the divide between information technology and operational technology.
Integrating IT and OT teams in the utilities industry is essential but often fails due to cultural, process, and technological barriers. Building trust between these teams is crucial for successful convergence.
Why It Matters
Realize true value.
IT/OT convergence enhances operational efficiency, resilience, and innovation through integrated systems and common standards. Utilities must embrace this trend to stay competitive and efficient.
The Solution
Educate stakeholders
Gather input from various stakeholders across the organization regarding IT/OT convergence. Educate diverse stakeholders and business unit leaders on the potential impact of converging IT and OT operations to gain buy-in.
Identify common goals
Use the IT/OT convergence maturity model to establish a continuous improvement plan to drive convergence across people, processes, and technology. This will identify the organizational goals that will be impacted by IT/OT convergence.
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03
Ensure IT resilience and continuity
The Challenge
Navigate IT complexity for continuous operations.
Technology leaders in utilities are responsible for a variety of mission-critical systems, applications, and devices. In this environment, disaster recovery is an ongoing requirement, and plans must be tested and updated regularly. As business units become more automated and data-dependent, the importance of business continuity increases.
Why It Matters
Rapid recovery in a volatile world.
Ensuring business continuity and disaster recovery is crucial in a connected world that is increasingly volatile and uncertain. The IT budget will be scrutinized by senior management and the board, making accuracy and appropriateness crucial. The budget is essential for enabling strategic growth of both IT and the organization.
The Solution
Build structured and repeatable processes
Keep planning efforts manageable with thorough coverage by implementing a structured and repeatable process for business continuity planning (BCP) that can be applied to one business unit at a time.
Align DRP with BCP
Leverage BCP outcomes to refine IT disaster recovery plan (DRP) objectives and achieve alignment between DRP and BCP. This includes defining appropriate objectives for service downtime and data loss based on business impact.
Create a Right-Sized Disaster Recovery Plan
Develop a Business Continuity Plan
Integrate Physical Security and Information Security
04
Build IT
The Challenge
Nurture IT's most valuable asset.
IT's main goal is to support the organizational mission and ambitions, which requires stakeholder input. IT must effectively manage data, but this data belongs to the enterprise, not IT. IT's goodwill with the business is the most valuable asset they have, and it must be nurtured through effective business relationships and stakeholder management programs.
Why It Matters
Collaboration is key.
IT leaders cannot achieve important goals without the input and support of the business. Key technology projects and initiatives like risk management, cost optimization, and effective strategy require collaboration with business counterparts. Without this collaboration, IT leaders will struggle to implement significant changes and improvements.
The Solution
Understand priorities and requirements
Build an effective strategy and set of practices for working with business stakeholders. This includes understanding their priorities and requirements, defining value drivers, and using a balanced value framework to prioritize opportunities.
Meet business goals
Improve IT's ability to meet business goals, enhance execution of business activities, and create a culture of trust and empowerment with product owners.
Embed Business Relationship Management in IT
Assess the Value Drivers Within Your Solutions
Mature and Scale Product Ownership
05
Master portfolio rationalization
The Challenge
Manage complex application portfolios.
Twenty-five years after the Y2K investments, many enterprises still have complex application portfolios filled with legacy systems, bolt-ons, and underused cloud products. This complexity is costly in terms of licensing and IT support, and it constrains technical adaptability.
Why It Matters
Enable business processes.
IT leaders must provide the tools to support enterprise processes and senior management's ambitions. Effective portfolio management is crucial for cost optimization, especially with steep IT budget reductions requiring a contraction of the application portfolio.
The Solution
Create an application inventory
Start by creating a comprehensive application and platform inventory. This inventory will improve decision-making by providing a clear understanding of what applications are in use and their respective platforms.
Rationalize applications
Leverage business priorities and communicate the associated risks in operational terms when rationalizing applications. This involves evaluating the current state of legacy applications, developing a strategy, and executing it in an agile manner.
Rationalize Your Application Portfolio
Make the Case for Legacy Application Modernization
Integrate Portfolios to Create Exceptional Customer Value
06
Effectively manage third
The Challenge
Navigate third-party security risks.
Security is a constant concern for IT leaders and key stakeholders. The biggest emerging challenge is managing the security risk inherent in third-party relationships, such as trading partners and suppliers, especially those providing cloud-based IT services. IT leaders must educate stakeholders on appropriate levels of risk and investment, which is no easy task.
Why It Matters
Address high-profile security concerns.
Even if IT and procurement controls are in place to manage third-party risk, IT leaders must be prepared to answer questions from auditors and the board's risk management committee. Effective management of third-party security risk is crucial for maintaining trust and avoiding negative publicity from security incidents.
The Solution
Develop a comprehensive process
Establish an end-to-end security risk management process that includes assessment, risk treatment through contracts and monitoring, and periodic reassessments.
Conduct vendor assessments
Base vendor assessments on the actual risks to the organization to ensure that vendors are committed to the process and that internal resources are available to fully evaluate assessment results.
Build a Vendor Security Assessment Service
Build an Information Security Strategy
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07
Optimize IT costs
The Challenge
Balance budgets and achieve strategic goals.
IT is often seen as a cost center, and senior management frequently targets IT operations and projects for quick savings. IT leaders must prioritize cost considerations by developing an effective budget aligned with an IT strategic plan that anticipates risks and opportunities.
Why It Matters
Enable IT strategic growth.
The IT budget is scrutinized by senior management and the board, making accuracy and appropriateness crucial. The budget is essential for enabling the strategic growth of both IT and the organization. Without a well-constructed budget, IT leaders cannot secure the necessary resources to drive important initiatives.
The Solution
Understand business goals and cost structure
Capture, analyze, and communicate IT spending and staffing to showcase IT's value to the business. This involves benchmarking against peers and developing a cost optimization strategy.
Build a value-based budget
Create a budget that demonstrates the delivery of business value, aligning IT financial plans with the strategic goals of the organization. This approach ensures that IT investments are justified and contribute to the success of the overall business.
Build Your IT Cost Optimization Roadmap
Create a Transparent and Defensible IT Budget
08
Conquer technical debt
The Challenge
Manage aging IT infrastructure.
Utilities often manage aging infrastructure, but this comfort with old technology poses risks to IT departments. Many organizations still use core systems from the Y2K era, and these outdated systems can hinder technical adaptability.
Why It Matters
Sustain the business for the long-term.
Technical debt is inevitable, but unmanaged debt poses operational, financial, and reputational risks. IT leaders must assess and address their technical debt as part of their overall strategy to ensure organizational stability.
The Solution
Define and identify technical debt
Start by identifying and defining the technical debt within the organization. Focus on the debt that can be addressed and conduct a business impact analysis to prioritize it based on its ongoing impact.
Manage and present findings
Identify options to better manage technical debt and present these findings to business decision-makers. This ensures that the organization is aware of the risks and can take appropriate action to mitigate them.
Manage Your Technical Debt
Make the Case for Legacy Application Modernization
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09
Redefine skills and roles
The Challenge
Prepare for an uncertain future.
Tomorrow will bring new threats, competitive pressures, and technological opportunities. Even if these technologies are unknown today, you can prepare by building team capabilities and appropriate IT roles. This is especially crucial in the utilities industry, where IT and OT roles are converging, driven by digital twins and Internet of Things trends.
Why It Matters
People drive success.
Technologies continue to evolve, but it is the people who administer and use these tools that drive project success. IT leaders must review how they are governing and developing their teams, ensuring that people are developed at least as effectively as technology.
The Solution
Build a strategic workforce plan
Use industry benchmarks to understand how current staff compare to similar organizations in terms of staffing levels and effort allocation. This helps in building a strategic workforce plan that accommodates today's technical demands and tomorrow's opportunities.
Create internal competencies
Develop internal competencies to take advantage of IT trends, particularly human-AI collaboration and an increasingly challenging security environment. This ensures the team is ready for technological advancements.
Build a Strategic IT Workforce Plan
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10
Embrace innovation in utilities
The Challenge
Accept change in traditional utilities.
Utilities, who often have century-long histories, may believe their business will continue unchanged. However, aging infrastructure, unstable operating environments, and new customer demands like electric vehicle support are forcing rapid evolution. Innovation should be pursued, not passively received.
Why It Matters
Embrace the future.
Organizations are pressured to achieve cost efficiencies and service improvements that outdated tools cannot provide. Prepare for future challenges by equipping teams and infrastructure for change. Proactively embrace innovation to ensure readiness for tomorrow's demands.
The Solution
Evaluate the IT operational strategy
Identify key components necessary for executing innovation initiatives. By understanding their current infrastructure and processes, organizations can pinpoint areas for improvement and prepare for future challenges.
Assess innovation capabilities
Assess the organization's innovation capabilities in five key areas: organizational excellence, insights and intelligence, agile ideation, team capabilities, and innovation operations. This helps in understanding strengths and weaknesses, providing a roadmap for growth.
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