Are Smart Grids the Top Priority for WE Utilities' CIOs?

If we start with an oversimplified idea that "Smart Grids = Grids + ICT," then it is obvious that utilities IT budgets have a direct effect on our future achievements of a Smart Grid. However, while there is growing excitement in the market concerning new technologies, including those in the Smart Grid concept, utilities are always cautious when it comes to IT spending and have pressure to prove ROI or TCO reduction before implementing any new initiative. Utility CIOs' budgets are still subject to numerous influences, including cost containment, compliance with regulations, and maintenance of the existing infrastructure.

In our recently published report "CIOs Priorities: IT Budget Distribution and Vendor Selection — Western European Utilities Survey 2010" (Doc# EIOS04S, October 2010), several very interesting trends emerged that can give an indication on whether utilities really are committed to the Smart Grid Vision.

To start off, it should be mentioned that on average Western European (WE) utilities' total ICT budgets are around 2.55% of total revenues. If we consider the last three years (2008, 2009 and 2010) ICT budgets have really mimicked the larger industry trends. For example, precrisis 2008, the percentage of respondents expecting to increase their ICT budgets was extremely high at 36.9%. When the survey was run during the first quarter of 2009, postcrisis and during the recession for some Western European countries, the percentage of respondents that expected to increase their ICT budgets dropped significantly to 14.1%. Western European utilities had a more positive outlook in 2010, with 21.8% of respondents expecting to increase their ICT budgets in the next 12 months. Considering 2010, WE utilities' CIOs indicated a rather even split between the external spending dedicated to back-office/ administrative processes and industry-specific processes.

Overall, if we consider Western European utilities IT budgets, we find that 25% of budgets are dedicated to "supporting new initiatives," while the rest covers "pure maintenance/management of the existing infrastructure," "routine infrastructure upgrades," as well as "supporting initiatives that are underway".

From the results of our survey, it becomes clear that the greater Smart Grid vision is still on the back burner for many Western European utilities. While smart metering, a first step in the vision, is more of an upfront concern today. For example, discussions around smart metering and smart grids have raised customer associations' concerns regarding data privacy, pushing utilities to pay additional attention to security and data privacy issues. In fact, this year's survey reveals that the two most important business initiatives in the utilities sector are "regulatory compliance" and "sensitive data privacy/payment transaction protection." Among the leading business initiatives, those most pertinent to the greater Smart Grid vision are considered more mid-to-long term, including "energy efficiency" and "development of new business models."

If we take a look at the key items on the agendas of WE Utilities' CIOs, we once again find that those most pertinent to the Smart Grid vision are not the most urgent, but could be addressed in a second moment. These key items include "integrated access to relevant information/data," and "real-time/near real-time monitoring" which are fundamental for the successful deployment of a Smart Grid.

CIOs are still facing significant challenges in determining where to make the most effective budget allocations. On one side, CIOs are expected to undertake new initiatives to ensure the most productive alignment between business process and IT to be effective and efficient. On the other hand, they are constantly asked to reduce their current expenses and make the best of what they are given.

Am I too pessimistic or just realistic?

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags IT spendingUtility IndustryCIO roleEMEASmart Grid/Smart MeteringenergyIT managementindustry verticals

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Gaia Gallotti

Unknown Publication
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?