The worlds of IT and OT have been operating separately for decades. Driven by both technology advancement and business transformation, IT/OT convergence originates at the technological level and evolves across both practices.

Recognizing the advantages of this trend, utilities are increasingly investing in integrations and collaborations between the two groups. However, many utilities fail in their endeavors, and the reasons are complex. There are barriers to be found in the organization’s culture, people, processes, and technology. Ultimately, it comes down to trust – or the lack of trust – between the IT and OT teams. Building trust is a gradual process, requiring intentional efforts to improve both rational initiatives and emotional connections between IT and OT teams.

This utility trends report highlights the evolving IT/OT convergence end state and provides a comprehensive maturity assessment tool to identify and prioritize areas for improvement. Conducting a maturity assessment based on team feedback can empower the team to integrate across strategic, tactical, and operational levels, thereby supporting organizational goals more effectively.

Jing Wu
Principal Research Director
Utilities, Industry Practice
Info-Tech Research Group

Building collaboration: With the increasing integration of digital technology and the growing threat of cybersecurity risks, technology leaders are challenged to enhance collaboration between IT and OT teams.

Taking down siloed operation: IT and OT teams within utilities have operated independently for decades. Both teams are resistant to change and reluctant to collaborate.

Managing conflicting priorities: The diverse nature of technologies and the varying criticality of the supported systems in utility operations often result in conflicting priorities between teams.

Frequently, technological challenges are not the primary impediment to the IT/OT convergence journey. Utilities face barriers rooted in non-technological aspects, including:

• Lack of a clear vision and strategy.
• Lack of cross-domain knowledge.
• Lack of governance and processes.
• Lack of priorities for integration and modernization.

Developing trust with leadership support is key to overcoming these obstacles.

By addressing all aspects of IT/OT convergence, utilities will have a better chance of a successful transformation and convergence journey in delivering organization-aligned value.

Use Info-Tech’s methodology to approach the conversation and identify shared organizational goals while addressing the differences.

Leverage Info-Tech’s utility business capability map to assess IT/OT convergence impact on business capabilities to identify gaps and opportunities.

Use Info-Tech’s IT/OT Maturity Assessment Tool to identify areas to prioritize to develop maturities.

IT and OT have operated independently in the past, each focusing on distinct systems and their unique impacts to their industries. However, a trend toward IT/OT convergence is emerging.

While there is no well-established definition, Cigref’s 2019 “IT/OT Convergence” report emphasizes the importance of establishing common technological foundations as the cornerstone of the convergence.

Cloud Adoption
Utilities are increasingly embracing cloud technologies, despite their historical preference of on-premises capital expenditure on technology investment. Some utilities have been migrating their SCADA systems to the cloud. This demands integrated cybersecurity practices from both IT and OT teams.

IIoT/Edge Emergence
With more smart sensors and intelligent devices deployed across various utility operations, the interconnected systems require comprehensive technology lifecycle support. This calls for a holistic approach from both IT and OT teams, leveraging complementary skill sets and expertise.

System Integration
As OT systems continue incorporating IT components, the need for application and data integrations across various network zones is growing. This creates dependencies and interconnection between IT and OT systems.

Business Digital Transformation
Amid the energy transition and sustainability agenda, utilities are increasingly undertaking major cross-functional initiatives such as advanced meter infrastructure (AMI) and modernization programs that demand extensive collaboration between IT and OT.

Integrated Decision-Making
Utilities continuously strive for business intelligence and customer engagements through data analytics and AI capabilities. Regulators are taking a broader view of technology investment from utilities holistically. This requires deeper integration of IT and OT teams as technology providers across the board.

Cost Management
As customers are increasingly concerned about high utility bills, utilities are seeking ways to improve operational efficiencies within growing financial and budget limitations. This involves leverage synergies between IT and OT teams while keeping cost contained.

Progress has been made in developing standards, frameworks, and best practices to bridge the gaps between the IT and OT domains in areas such as data integration and cybersecurity.

A lack of comprehensive frameworks addressing all aspects of OT operations remain, like the established IT governance frameworks ITIL, DMBOK, PMBOK, and COBIT.

ISA/IEC 62443
An international standard well adopted by utilities that promotes secure integration between IT and OT systems by offering best practices within an industrial automation environment.

ISA-95
An industrial framework designed to establish common integration procedures to facilitate standardized data exchange between enterprise business applications and control systems.

NIST
The National Institute of Standards and Technology framework promotes IT/OT convergence with special publications (SP) managing risks associated with IT and OT components.

NERC-CIP
The North American Electric Reliability Corporation Critical Infrastructure Protection standards are adapting to the challenges of IT/OT convergence in the bulk electric systems by evolving its standards.

“Accepting that IT/OT Convergence will be the End State” is one of the key findings in an IT/OT convergence reportfrom a US National Security Advisory Committee to the president.

The report not only provides practical recommendations but also emphasizes that besides technology, the discipline of people and process are important to success.

Source: NSTAC, 2022

“Although cloud-hosted SCADA has some unique risks, securing a cloud platform is a shared problem with IT.” UK’s National Cyber Security Centre encourages OT and IT organizations to share the responsibilities of securing the cloud-hosted SCADA system.

NCSC’s cloud security guidance aims to assist organizations to focus on assessing business drivers, readiness, and technology suitability before migrating SCADA systems to the cloud.

Source: NCSC, 2023

Australia’s 2023 Critical Infrastructure Resilience Strategy underscores the concerted effort to address the growing threats posted by IT/OT convergence, increasing cloud adoption, and lack of standards in OT systems.

ACSC’s critical infrastructure engagement model emphasizes collaboration among sectors, cross-sectoral groups, and advisory bodies to ensure the security and resilience of the nation’s critical infrastructure.

Source: CISC, 2023

Amazon Web Services (AWS) offers cloud services along with their IT/OT convergence security maturity model to help manage risks in both IT and OT to meet regulatory requirements.

One of leading global suppliers of open automation solutions offers standards-based utility solutions that utilize common software platforms and technology to facilitate IT/OT convergence.

IBM is offering IT/OT security solutions as well as their expertise in bridging the IT/OT gap.

Schneider Electric’s EcoStruxure™ platform showcases an IT/OT industrial automation reference architecture, enabling a converged and secured IT/OT production ecosystem.

Microsoft’s Azure Digital Twins, when integrated with Azure Data Explorer and Azure Synapse, synergize data from IT systems, OT systems, and IIoT devices to answer critical business questions.

Siemens, a global technology giant, is assisting clients in progressing toward the complete convergence of IT and OT through its suite of products and data integration.

• The executive teams make the strategic decision to combine both IT and OT teams under one leadership, recognizing the benefits of IT/OT convergence.
• There is pressure to reduce costs and drive operational efficiency by decreasing the number of full-time employees while also addressing the talent shortage gap.
• Regulatory requirements force utilities to converge their cybersecurity and data management practices to enhance resilience and mitigate risks.

• Business transformation projects, like advanced metering infrastructure (AMI) and distribution energy resource management system (DERMS) implementation, require collaborative effort from IT and OT teams to change processes and develop integration bridging IT and OT networks.
• Cyber incidents demand unified efforts from IT and OT teams to address issues and collectively develop a zero-trust integrated cybersecurity plan, prompting a rapid transition toward unified cybersecurity practices.

• Devices were implemented and deployed on networks without full visibilities by the system owners.
• Systems were added or changed without strict internal change management and control, compromising the integrity of the “air gap” boundaries.
• Intelligent equipment introduces digital and electronic components, requiring a different skill set for proper management.

Less duplication: Technology, staffing, infrastructure, licensing, hardware, and vendor management.

Improved performance: Better analytics, more data, less conflict, common governance, better collaboration, common KPIs, better decisions, and improved traceability and service quality.

Cost reduction: Common standards, less duplication, agile operations, and better decisions.

Risk reduction: Security, disaster recovery, business continuity, and compliance and regulatory conformity.

Increased flexibility: Agility, open systems, shorter lifecycles, cross-enterprise data, and remote operability.

Better data: Integrated systems, better analytics, data-enabled networks, and real-time.

Improved stakeholder satisfaction: Better data and analytics, less downtime, more visibility to scheduling and production, less internal friction, more agility, reduced costs, and real-time data.

Focused innovation: Collaborative, integrated systems, and common platforms and standards.

Acknowledging the trend of IT/OT convergence, the former CEO of OPPD tasked the leadership team with assessing where OPPD should position itself organizationally, considering its complex operation as a vertically integrated utility organization.

OPPD decided to conduct a series of market research and peer connections with other utilities. They interviewed about 20 utilities to understand their IT/OT convergence journey and assess high-level maturity levels. As a result, OPPD decided to consolidate all operational technologies under one director, reporting up through the CIO. With the integration of the organizational structure, there also comes alignment of the technology strategy roadmap across all technology domains. Other tactical integrations include but are not limited to:

• Implementing an ownership framework model where business owners and technology owners collaborate on technology roadmaps and solutions across both IT and OT domains.
• Appointing a single director responsible for overseeing the cloud strategy, working alongside the IT and OT directors.
• Leveraging already established processes, such as a centralized project management office and budgeting processes, by the OT team even though the OT systems remain segmented from the corporate environment.

OPPD’s IT/OT convergence initiative has fostered continuous learnings between IT and OT teams, resulting in a united technology team that is enabling OPPD’s business transformation.

Since the convergence, OPPD has benefited from technology alignment, synergies in application and data integration, and consistent processes such as change management. Most importantly, this consolidation of OT technologies and IT integration has enhanced OPPD’s capability to execute major infrastructure projects such as data center relocations.

With a business growth plan in place, H2O has expanded its Canadian operations through acquisitions of American sites. While the Canadian operation has fully integrated IT and OT practices, the US counterparts have a different setup. H2O aims to leverage the benefits and lessons learned from the successful Canadian IT and OT convergence journey to guide the best path forward for the rest of the organization.

Prior to the IT/OT convergence model, the Canadian business has encountered several common challenges: a lack of change management process for coordinating production changes among IT, OT, and external contractors; late involvement of IT in supporting business and engineering departments’ operational plans; and an OT team operating in isolation from the broader organization.

With executives’ strategic guidance, H2O has initiated its IT/OT convergence journey within its Canadian operations. Both IT and OT teams now report to the director of transformation and technology, fostering a close working relationship with business. Through collaboration, the team has developed rigorous security standards, resulting in the deployment of common cybersecurity technology solutions across both IT and OT domains.

The engineer team, IT, and OT groups collaborate from the project planning phase onward to ensure proper resource allocation and adherence to standards. Selection of all technologies are made based on supportability and cost-effectiveness, leveraging domain knowledge and expertise from all involved parties.

H2O has implemented a flexible, competency-based approach to roles and responsibilities between IT and OT team members. Project team members undertake tasks based on competency and expertise, and the accountable member can review and sign off on work that is completed by another team member.

The IT/OT convergence model has improved H2O’s operational efficiency by leveraging talents that support both IT and OT operations. This enables faster response and resolution of operational issues.

All groups have gained confidence through a fit-for-purpose governance model, requiring data owners and system owners to review and authorize production changes across IT and OT domains. Standardized technology service delivery and improved communications have strengthened its operation. The IT/OT convergence model is advantageous for supporting future business growth.

Strengths (Internal)

Weakness (Internal)

• Collaboration with business areas (IT/OT)
• Nimble and responsive on service delivery (OT)
• Business knowledge (OT)
• Standardize policies and procedures (IT)
• Established SLA and DR (IT)
• Ability to maximize technologies and assets (OT)

• Aged infrastructure and siloed technology (OT)
• Lack of resources and limited capacity (IT/OT)
• Inconsistent processes and knowledge transfer (OT)
• Lack of understanding of IT and OT (IT/OT)
• Lack of vision and strategy alignment (OT)
• Lack of understanding of total cost of ownership (IT/OT)

• Establishing a resilient cybersecurity response team (IT/OT)
• Establish service level agreement collaboratively (IT/OT)
• Speed up service delivery (IT)
• Cross-training resources (IT/OT)
• IT and OT collaboration (IT/OT)

• Cyberattacks targeting old infrastructure (IT/OT)
• Lack of qualified workforce (IT/OT)
• Heavily vendor dependent (IT/OT)
• Lack of industry standards (OT)
• IT and OT competition (IT/OT)
• Growth of technology landscape (IT/OT)

Opportunities (External)

Threats (External)

1. Establish common goals and objectives despite the differences between IT and OT practices.

2. Identify candidate opportunities across the business capability map for IT/OT convergence to enhance value.

3. Conduct a holistic IT/OT maturity assessment to help you focus on your effort in your improvement plan.

Top Down

Horizonal Scan

Bottom Up

• Organizational Values
• Organizational Principles

• Management Culture
• Team Culture

• Team Relationship
• Collaboration

• Communication
• Conflict Management

• IT/OT Strategy
• Business Relationship

• Governance Structure
• Policies

• Planning & Architecture
• Cost & Budget Mgmt.

• Service Performance Mgmt.
• Organizational Change Mgmt.

• Organizational Design
• Talent Management

• Learning and Development
• Roles and Responsibilities

• Work Arrangement
• Knowledge Management

• Portfolio & Project Mgmt.
• Vendor Management

• Service Catalog & Mgmt.
• Asset Management

• Change Management
• Incident & Problem Mgmt.

• Code & Config. Mgmt.
• Release Mgmt.

• Rationalization & Standards
• Selection & Implementation

• Data Center Mgmt.
• Network & Comm. Mgmt.

• Control System Mgmt.
• IIoT/Edge Device Mgmt.

• Office/Field Device Mgmt.

• Data Strategy
• Data Governance

• BI & Reporting
• Data Architecture

• Data Integration
• Data Quality

• Risk Management
• Security Strategy

• Security Governance & Mgmt.
• External Compliance

• Business Continuity
• Disaster Recovery

• Process Control & Audit
• Health, Safety & Envt.