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Build a Utilities Business-Aligned IT Strategy

Success depends on IT initiatives clearly aligned to business goals, IT excellence, and driving technology innovation.

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According to the Management and Governance diagnostic (MGD), 74.6% of organizations have an IT strategy process they feel is ineffective.

IT does not do a good job of communicating their support for business goals; therefore, 23.6% of CXOs still feel that their goals are unsupported by IT.

IT departments that have not developed IT strategies experience alignment, organization, and prioritization issues.

Our Advice

Critical Insight

A CIO has three roles: enable business productivity, run an effective IT shop, and drive technology innovation. Your key initiative plan must reflect these three mandates and how IT strives to fulfill them.

  • Don’t project your vision three to five years into the future. Dive deep on next year’s big-ticket items instead.
  • Developing an IT strategy is a wasted effort if no mechanisms are put in place to govern the journey.
  • If you don’t communicate it, it doesn’t exist; simple, appealing, and inspirational communication is needed.

Impact and Result

  • Establish the scope of your IT strategy by defining IT’s mission and vision statements and guiding principles.
  • Perform a retrospective of IT’s performance to recognize the current state while highlighting important strategic elements to address going forward.
  • Elicit the business context and identify strategic initiatives that are most important to the organization while building a plan to execute it.
  • Evaluate the foundational elements of IT’s operational strategy that will be required to successfully execute on key initiatives.
  • Wrap all strategic information into a highly visual and compelling presentation that enables easy customization and executive-facing content.

    • Build a Utilities Business-Aligned IT Strategy Research & Tools

    1. Build a Utilities Business-Aligned IT Strategy Deck – A step-by-step document that walks you through how to properly align with the business, achieve IT excellence, and drive technology innovation.

    Align with the business by creating an IT strategy that documents the business context, key initiatives, and a strategic roadmap. To create a business-aligned IT strategy, you must understand what the business does and what the business will need. Only then can a carefully thought out, strategic, and tactical plan be created for execution.

    This storyboard will help you build your IT mission and vision statements and IT guiding principles, elicit business context from the CIO and the IT team, identify your key initiatives and build their profiles, construct your strategic roadmap, and evaluate your governance structures, budget, and organizational changes.

    Build a Utilities Business-Aligned IT Strategy – Phases 1-4

    2. Business Context Interview Guide – An interview guide to help you elicit the business context by interviewing business leaders and peers.

    Use this template as a starting point to interview your business leaders to elicit the business context. The goal of the interviews is to extract business goals, organizational priorities, and business initiatives that will play a critical role in building your IT strategy. Meet with your executive team and work with them to identify essential knowledge.

    Business Context Interview Guide

    3. IT Presentation Template – A best-of-breed template to help you build a clear, concise, and compelling strategy document for stakeholders.

    This presentation template uses sample data from "Acme Corp" to demonstrate an ideal IT strategy. Use this template to document your final strategy outputs including executive-facing business alignment and strategy highlights, key initiatives and summaries, a strategic roadmap, a budget proposal, IT goals and an operating model, functional project roadmaps, and year-in-review data to highlight IT success stories.

    IT Strategy Presentation Template
    Strategy-on-a-Page Template

    4. IT Strategy Workbook – A structured tool to help you prioritize IT strategy activities and build a roadmap to ensure success.

    This tool guides an IT department in planning and prioritization activities to build an effective IT strategy. This Excel workbook guides you through making key decisions regarding the visuals that should be incorporated into your final presentation document. Key activities include building a goals cascade visual that shows the relationships between business and IT goals, initiatives, and capabilities; prioritizing key initiatives using a balanced scorecard approach; and building the IT strategy roadmap using a Gantt chart visual to showcase project execution timelines.

    IT Strategy Workbook
    Unlock a Free Sample

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    Build a Utilities Business-Aligned IT Strategy

    Success depends on IT initiatives clearly aligned to business goals, IT excellence, and driving technology innovation.

    Executive Summary

    IT strategies are often nonexistent or ineffective.

    • According to the Management and Governance diagnostic (MGD), 74.6% of organizations have an IT strategy process they feel is ineffective.(1)
    • IT does not do a good job of communicating their support for business goals, therefore, 23.6% of CXOs still feel that their goals are unsupported by IT.(2)

    IT departments that have not developed IT strategies experience alignment, organization, and prioritization issues.

    Three-quarters of surveyed CEOs value tech leaders with experience fostering operational stability and strategic business alignment,(3) however…

    • The CIO is seen as an order taker by business executives. This usually results in the demands on IT far outstripping the IT budget.
    • Projects and initiatives are not prioritized around business objectives. Synergies and dependencies are recognized too late. Projects are often late or put on hold because of sudden changes to business requirements.

    Follow Info-Tech's approach to developing a strong IT strategy.

    • Use Info-Tech's industry-focused approach to discern the business context.
    • Clearly communicate to business executives how IT will support the organization's key objectives and initiatives using the Strategy Presentation Template.
    • Use Info-Tech's Prioritization Tool to help make project decisions in a holistic manner that allows for the selection of the most-valuable initiatives to become part of the IT strategic roadmap.

    Info-Tech Insight

    A CIO has three roles: enable business productivity, run an effective IT shop, and drive technology innovation. Your IT strategy must reflect these three mandates and how IT strives to fulfill them.

    1: Info-Tech, Management and Governance Diagnostic; n=1,931
    2: Info-Tech, CEO-CIO Alignment Diagnostic; n=863
    3: CIO Journal, 2020

    Executive Summary: Utilities Business-Aligned IT Strategy

    Situation

    The utilities industry is undergoing rapid change. The driving factors include aging infrastructure, increasing adoption of renewable energy sources, and changes in customer expectations. Utilities companies must embrace innovation and digital transformation in order to remain competitive and meet the evolving needs of their customers.

    The role of IT needs to be more strategic for utilities, and IT leaders need to collaborate closely with business leaders to ensure that IT investments align with business objectives and contribute to competitive advantage.

    Complication

    The utilities industry is facing significant challenges owing to legacy technology systems that are struggling to keep up with modern business demands.

    Legacy technology systems can limit utilities companies' ability to employ new digital technologies, such as smart grids and energy storage systems. These systems also require significant maintenance and support that can divert resources away from innovation and growth.

    Utility companies need to modernize their technology infrastructure to remain competitive in the face of rapidly changing market dynamics.

    Solution

    With the shift in the industry and the increased range of competition, utility companies need to aggressively leverage technology to stay relevant and retain or expand their market:

    • Learn about the fundamentals of your industry including its ecosystem, influences, opportunities, and constraints.
    • Conduct SWOT analyses within the context of your industry, with guiding insights from Info-Tech, to understand unique implications for IT.
    • Devise a list of initiatives you can integrate into your IT strategic plan to transform the role IT plays in enabling improvement and success in your organization.

    Utilities industry environment

    • Renewable energy adoption
    • Digitalization and smart grids
    • Customer engagement
    • Cost optimization

    Influencing factors

    • Renewable energy adoption: There is a growing trend toward renewable energy sources such as wind, solar, and hydro, driven by environmental concerns and government policies. This is leading to investments in new technology and infrastructure to support renewable energy generation and distribution.
    • Digitalization and smart grids: There is an increased focus on digitalization and the development of smart grids to improve energy efficiency, reduce costs, and better manage energy distribution. This includes the integration of Internet of Things (IoT) devices and real-time monitoring for better data analysis and decision-making.
    • Customer engagement: The utility industry is shifting toward a customer-centric approach, with increased focus on engagement and personalized experiences. This includes the use of digital channels for communication and self-service as well as the adoption of demand response programs to better manage energy usage.
    • Cost optimization: The need to optimize costs is driving investments in new technologies, such as energy storage and advanced metering infrastructure, to improve energy efficiency and reduce waste. This includes the adoption of predictive analytics and machine learning to better forecast energy demand and optimize energy production.

    Utilities industry facts

    • Industry size and revenue
    • Industry global breakdown
    • Projected industry growth
    • Employment

    Key industry details

    • Industry size and revenue: The global utility market, which includes electric, gas, water, and renewable energy providers, was worth $4.85 trillion in 2019 and accounted for approximately 5.5% of the world's GDP (Statista, 2021).
    • Industry global breakdown: North America is the largest market for utilities, representing approximately 30% of the global market. Europe follows with 28%, while the Asia Pacific region is the fastest growing, with a compound annual growth rate (CAGR) of 8.3% (GlobalData, 2021).
    • Projected industry growth: The utility industry is expected to grow at a CAGR of 3.6% from 2020 to 2025, reaching a market value of $6.02 trillion. The renewable energy sector is expected to drive much of this growth, with a CAGR of 6.1% over the same period (Mordor Intelligence, 2021).
    • Employment: The utility industry employs approximately seven million people globally, with the majority working in the electric and gas sectors. Employment is expected to grow at a CAGR of 2.6% from 2020 to 2025, driven by the adoption of renewable energy sources (Statista, 2021).

    Utilities competitive landscape

    • Rapidly evolving landscape
    • Emerging competition
    • Regulatory pressure
    • Need for digital transformation

    The shifting tides of the utilities industry

    • Rapidly evolving landscape: The utilities industry is experiencing a rapid pace of change, driven by the increasing adoption of renewable energy sources, smart grids, and advanced technologies.
    • Emerging competition: Traditional utility providers face competition from new market entrants, including renewable energy providers, energy storage companies, and energy service providers.
    • Regulatory pressure: Utilities are facing increasing regulatory pressure to adopt more sustainable and eco-friendly practices, which is driving the need for innovation and technology adoption.
    • Need for digital transformation: Many utilities are still reliant on legacy technology, which is not well suited to the current needs of the industry. Digital transformation is needed to increase efficiency, reduce costs, and remain competitive.

    Critical challenges in utilities IT

    • Managing legacy infrastructure
    • Cybersecurity threats
    • Regulatory compliance
    • Data management
    • Aging workforce

    Navigating IT in the utilities industry

    • Managing legacy infrastructure: The utilities industry has significant investments in legacy infrastructure, making it difficult to adopt new technologies and systems. The cost of replacing or upgrading these systems is often prohibitive, and the complexity of the infrastructure makes it challenging to integrate new technologies.
    • Cybersecurity threats: The utilities industry is a prime target for cyberattacks, as a successful breach could have significant consequences for both the company and its customers. The increasing use of IoT devices and the growing number of connected systems further exacerbate this challenge.
    • Regulatory compliance: The utilities industry is heavily regulated and compliance with various regulations can be a significant challenge. Compliance requirements can be complex, and keeping up with changes in regulations and standards can be a resource-intensive task.
    • Data management: The utilities industry generates vast amounts of data, which must be managed efficiently and effectively. This includes ensuring data quality, maintaining data privacy and security, and integrating data from disparate sources.
    • Aging workforce: The utilities industry is facing a demographic challenge as a large percentage of the workforce is nearing retirement age. Replacing this workforce with skilled personnel is a significant challenge, particularly as the industry evolves and new skills are required.

    Critical opportunities in utilities IT

    • Digital transformation
    • Data analytics
    • Cybersecurity

    Powering up: Critical opportunities in the utilities industry IT

    • Digital transformation: There are significant opportunities for members of the utilities industry to modernize and digitize their operations. This includes the adoption of technologies such as smart grids, IoT devices, and advanced analytics to improve efficiency, reduce costs, and enhance the customer experience.
    • Data analytics: The utilities industry generates vast amounts of data, which can be used to gain insights into customer behavior, energy consumption patterns, and maintenance needs. Advanced analytics can help utilities optimize their operations, reduce costs, and improve customer satisfaction.
    • Cybersecurity: The increasing use of connected devices and the growing threat of cyberattacks make cybersecurity a critical opportunity for the utilities industry. Investing in robust cybersecurity measures can help to protect critical infrastructure and safeguard customer data.

    Info-Tech's approach

    1. Establish the Scope of Your IT Strategy

      Establish the scope of your IT strategy by defining IT's mission and vision statements and guiding principles.

    2. Review IT Performance From Last Fiscal Year

      A retrospective of IT's performance helps recognize the current state while highlighting important strategic elements to address going forward.

    3. Build Your Key Initiative Plan

      Elicit the business context and identify strategic initiatives that are most important to the organization and build a plan to execute on them.

    4. Define IT's Operational Strategy

      Evaluate the foundational elements of IT's operational strategy that will be required to successfully execute on key initiatives.

    Info-Tech's methodology for IT strategy

    01: Business context

    02: Key initiative plan

    03: Operational strategy

    04: Executive presentation

    Inputs
    • Business strategy
    • Utilities industry capability map
    • Business context information
    • Diagnostic reports to assess current state
    • Last fiscal strategy
    • Key initiatives list
    • Last fiscal operational strategy
    • Initiatives and roadmap
    • Operational strategy

    Outputs

    Business context information for step 2:

    • Business goals
    • Organizational objectives & initiatives
    • Industry customized capability map

    IT strategy information for approval:

    • Strategy scope
    • Year in review
    • Key initiative plan & profiles
    • Goals cascade
    • Roadmap

    Operational strategy information for step 4:

    • Stakeholder management
    • Metrics & targets
    • Risk management
    • Organizational changes
    • Budget
    • Functional roadmap & next steps

    Executive presentations for:

    • Business executives
    • IT team
    • Board
    • Org-wide key highlights

    Service

    		 Pre-workshop
    industry-specific
    guided implementation     		IT Strategy Workshop IT Strategy Workshop IT Strategy Workshop

    Info-Tech's methodology for IT strategy

    Info-Tech's methodology for IT Strategy. Table shoes Light-weight Assessment and Thorough Analysis Options for each of the 4 phases.

    Blueprint deliverables

    The IT Strategy Workbook supports each step of this blueprint to help you accomplish your goals:

    Goals Cascade Visual

    Elicit business context and use the workbook to build your custom goals cascade.

    Initiative Prioritization

    Use the weighted scorecard approach to evaluate and prioritize your strategic initiatives.

    Roadmap/ Gantt Chart

    Populate your Gantt chart to visually represent your key initiative plan over the next 12 months.

    Key deliverable:

    IT Strategy Presentation Template

    A highly visual and compelling presentation template that enables easy customization and executive-facing content.

    Info-Tech offers various levels of support to best suit your needs

    DIY Toolkit

    "Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

    Guided Implementation

    "Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

    Workshop

    "We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

    Consulting

    "Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

    Diagnostics and consistent frameworks are used throughout all four options.

    Guided Implementation

    What does a typical GI on this topic look like?

    Phase 0

    Phase 1

    Phase 2

    Phase 3

    Phase 4
    • Call #1: Discuss business context and customize your organization's capability map.
    • Call #2: Identify mission and vision statements and guiding principles to discuss strategy scope.
    • Call #3: Assess year-in-review data and evaluate performance.
    • Call #4: Discuss diagnostic data results and success stories.
    • Call #5: Identify strategic initiatives and required information.
    • Call #6: Discuss how to build your roadmap.
    • Call #7: Discuss and identify appropriate operational strategy components.
    • Call #8: Summarize results and plan next steps.

    A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

    A typical GI is 8 to 12 calls over the course of 2 to 4 months.

    Workshop Agenda

    Contact your account representative for more information.
    workshops@infotech.com 1-888-670-8889

    Session 0
    (Pre-Workshop)

    Session 1

    Session 2

    Session 3

    Session 4

    Session 5

    Activities
    Elicit Business Context

    0.1 Complete recommended diagnostic programs.

    0.2 Interview key business stakeholders, as needed, to identify business context: business goals, initiatives, and the organization's mission and vision.

    0.3 (Optional) CIO to compile and prioritize IT success stories.

    Establish the Scope of Your IT Strategy

    1.1 Review/validate the business context.

    1.2 Construct your mission and vision statements.

    1.3 Elicit your guiding principles and finalize IT strategy scope.

    Build Your Key Initiative Plan

    2.1 Identify key IT initiatives that support the business.

    2.2 Identify key IT initiatives that enable operational excellence.

    2.3 Identify key IT initiatives that drive technology innovation.

    2.4 Consolidate and prioritize (where needed) your IT initiatives.

    Build Your Key Initiative Plan (cont.)

    3.1 Determine IT goals.

    3.2 Complete goals cascade.

    3.3 Build your IT strategy roadmap.

    Define Your Operational Strategy

    4.1 Identify metrics and targets per IT goal.

    4.2 (Optional) Identify required skills and resource capacity.

    4.3 Discuss next steps and wrap-up.

    Document Strategy

    5.1 Complete in-progress deliverables.

    5.2 (Optional) Set up review time for workshop deliverable.

    Outcomes
    1. Diagnostics reports (CIO Business Vision, Management and Governance Diagnostic, CEO-CIO alignment)
    2. IT Strategy Workbook – Business Context
    1. IT strategy scope (IT mission, vision, and guiding principles)
    1. List of key IT initiatives
    1. Goals cascade
    2. Roadmap (Gantt chart)
    1. IT metrics and targets
    2. IT resourcing changes
    3. Next steps and strategy refresh schedule
    1. IT strategy presentation
    Build a Utilities Business-Aligned IT Strategy preview picture

    About Info-Tech

    Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.

    We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.

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    A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.

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    Guided Implementation 1: Elicit Business Context
    • Call 1: Discuss business context and customize your organization’s capability map.

    Guided Implementation 2: Establish the Scope of Your IT Strategy
    • Call 1: Identify mission and vision statements and guiding principles to discuss strategy scope.

    Guided Implementation 3: Build Your Key Initiative Plan
    • Call 1: Assess year-in-review data and evaluate performance.
    • Call 2: Discuss diagnostic data results and success stories.

    Guided Implementation 4: Define Your Operational Strategy
    • Call 1: Identify strategic initiatives and required information.
    • Call 2: Discuss how to build your roadmap.

    Guided Implementation 5: Document Your Strategy
    • Call 1: Discuss and identify appropriate operational strategy components.
    • Call 2: Summarize results and plan next steps.

    Authors

    Sanchia Benedict

    Jack Hakimian

    Gord Harrison

    Nitin Mukesh

    Contributors

    • Luis Ramón Ramos Espinoza, Chief Information Officer, Suramericana
    • Kyle Saverance, Chief Information Officer, Coker College
    • Scott Ross, SVP Omni-Channel Technologies, Lowe’s Companies
    • Max Min, Director, Waterloo City Centre
    • Philip D’Aurelio, Development Solutions Supervisor, City of Hamilton
    • Michael Dieckmann, Chief Operating Officer, Florida Virtual Campus
    • Joe Evers, Consulting Principal, JcEvers Consulting Corporation
    • Ken Piddington, Chief Information Officer, MRE Consulting
    • 2 anonymous contributors
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