Are utility companies spending their IT budgets efficiently?

Not even close.

Up to 80% of what utilities spend on IT is allocated to implementing software integrations and data provisioning (i.e. menial, repetitive tasks). Less than 20% of IT budgets are used to deliver innovative energy services. Unfortunately, a higher pace of innovation and a greater focus on digital strategies are needed to survive and succeed in the energy sector today. In order for companies to remain competitive in an industry bombarded by disruptive innovations, new business models and a broader scope of innovation should be a priority for most utilities.

This disruption is already visible in markets worldwide: Various utility startups have transformed the industry’s landscape by introducing unique, cutting-edge solutions to markets that are longing for change.

Why is this happening and what are the implications for utility companies and their future success? We can answer these questions by exploring the link between IT spending, innovation, and employee happiness.

Innovation and Employee Happiness

In most utilities, the majority of IT effort is spent maintaining integrations and ensuring data can function with critical business systems. When a new feature or asset is added to the environment, the entire integration has to be repeated again and again for future changes.

It doesn’t take an expert to see that this process is a massive waste of time and money. The resources spent on constant reintegrations could have been spent more efficiently on tech R&D or upgrading existing business applications instead.

Unfortunately, many utilities still do not realize this mistake is severely affecting their digital transformation efforts—a problem that extends to the performance of their employees.

When developers are tasked with working on mundane tasks like data and application integration to maintain legacy IT environments, they don’t have enough time (or energy) to flex their creative muscles on building innovative solutions. New and emerging tech (e.g. AI and Machine Learning) that could ultimately save time and money are neglected over outdated and bulky systems.

Instead of innovation, many utility workers still find themselves on the repetitive routine hamster wheel. Employees (IT teams included) are stuck working on the same routine daily tasks, eventually burning out and leaving due to boredom.

The Link Between Innovation, Success, and IT Spending

Should utilities be concerned with this issue? Yes. A solution must be quickly implemented if utility companies are to survive the disruptive innovations overtaking the market.

We understand that maintaining integrations and ensuring data is working are two critical functions of an enterprise IT system. However, when utilities spend most of their resources on tasks that don’t bring them forward digitally, innovation is hindered. This is one of the biggest reasons businesses fail.

When utilities limit their innovation, they make it hard to keep up with competitors using the latest technology. In fact, the market is demanding that utilities rapidly respond and innovate to meet customer needs, especially given the growing expectations from customers and new generation of digital natives that are used to getting what they want digitally and are willing to switch to organizations that are willing to provide a better and more personalized level of service.

When competing with fast-moving startups, established utilities may have an early edge thanks to the size and wealth of resources. However, in 5 years, if the corporation or conglomerate fails to adapt, it will struggle to keep up with the startup and will be left without the required infrastructure to meet evolving customer needs. Meanwhile, an agile startup will be future-proof right out of the gate.

Any tech infrastructure upgrade utilities neglect right now will only negatively impact their business in the future. And the future is coming fast. This is not just a problem in the US and Europe. Utilities all over the world must deal with these inefficient and outdated practices in their IT departments.

How to Survive in a Changing Utilities Landscape

Focus on AI and Automation

AI and automation are the two key factors that can help utilities innovate and stay ahead of the curve.

37% of organizations have already started using AI in operations, while global spending on AI is expected to hit the $77 billion mark in a few years. A Gartner study also suggests AI will drive the majority of business decisions by 2022.

Likewise, companies must invest in automation, as they cannot afford to lose resources to repetitive work. In utilities, this means automating integrations and data provisioning so IT teams can focus more on strategic work: building products and services that help utilities advance digitally.

Digital innovation is not the only benefit companies gain with automation. Businesses report cost savings of up to 28% as a result of implementing intelligent automation systems. Again, the extra funds can be funneled to R&D, further boosting innovation.

Increased work quality is another important reason to adopt these technologies. An ESG survey found that 55% of companies cite “improved quality” as the reason they invest in AI and automation.

This is not surprising, as algorithms are more precise than humans in performing tasks. As a result, errors are significantly reduced, avoiding utilities the costs of downtime. Automation also completes tasks faster. This allows utilities to get repetitive—but necessary—work done in a fraction of the time.

Make Work More Fun for Tech Departments

Developers today want modern tools to help them with their responsibilities. A study by GitLab discovered that 81% of respondents in the tech space say having the latest development tools is a must, while another similar study by Stack Overflow further asserts the importance of using modern tools in development work.

What’s the point of giving IT teams the industry-leading tools they desire, you may wonder?

Let’s go back to the previous point about the downfalls of assigning developers repetitive tasks. Yes, young IT professionals are hungry to prove themselves in the industry and want and need to work with new technologies like AI, Machine Learning, and Data Analytics. Modern tools will not just look good on their résumés and keep them motivated. They also help IT teams immensely with higher level development tasks.

One example of using modern tools in utilities is in low-code tools. IT teams are becoming increasingly reliant on low-code tools to help them execute repetitive jobs easier and free up time for more strategic work. Container-driven development tools (e.g. Docker) are also worth looking into as the cloud becomes the default environment for enterprise IT architectures.

In short, IT teams will be much happier when they have access to the latest automation and other technologies, and happy teams are productive teams. Not only that, with the right technology, IT teams get the resources and motivation they need to experiment—and with experimentation comes successful innovation.

IT Departments Can Cut Out Data Provisioning Monkey Work

To achieve successful innovation, internal processes must change, which, as mentioned, begins by automating repetitive tasks and empowering developers with the tools they need to work more efficiently.

This is exactly why we built Greenbird. Why should utilities spend the bulk of their resources on data provisioning when our platform can get the grunt work done for them?

With Greenbird, your IT team gets the freedom it needs to work on higher level tasks and craft innovative solutions while we deal with data provisioning behind the scenes. This makes work more engaging and interesting for your team.

That, in our opinion, is infinitely more fun than running Bash scripts all day to clean up endless amounts of datasets!

About Greenbird
Greenbird offers out-of-the-box system integration and data provisioning for utilities. We are a true DevOps company, delivering unique time-to-market and reliability. We were named a Gartner ‘Cool Vendor’ in 2018 because of our domain-specific and flexible integration capabilities, crucial for creating easy-to-consume integrated solutions. Utilihive empowers utilities to manage their data flow faster and smoother than traditional system integration models while accelerating the journey towards the energy revolution.