The 6 Digital Transformation Priorities for Utility CIOs
Which one first?
This is one of the toughest questions for every utility CIO today.
In the last 10 years across the utility industry, no one in the C-suite has been under more scrutiny than the CIO. Amidst the rapid digital transformation sweeping across utility companies, CIOs are often caught between reconciling legacy and new systems, faced with competing objectives and restricted by limited resources.
This changing role of the CIO is highlighted in several well-documented studies. One of the most recent, the 2019 IDG State of the CIO report, reveals that 88% of CIOs say they are more likely to be spearheading their organization’s digital transformation than their counterparts.
With digital transformation spanning dozens of areas that a CIO might be responsible for, we go back to that million-dollar question:
Which one first?
I believe that every utility CIO’s priority list should center on these major areas:
The utility workforce is aging.A Greater Scranton Chamber of Commerce survey reveals that 25%-35% of the utility workforce belongs to the 55-and-up age bracket and are on the brink of retirement.
The rise of the digital utility has created a pronounced skills gap between its aging workforce and the expertise needed to create and manage grids of the future.
Gone are the days when the utility sector conjured up images of hardhat wearing macho men taking care of everything. Digital utilities have ushered in a new wave of utility workers that includes tech-savvy engineers, data scientists, programmers, AI and machine learning gurus and automation experts.
The business continuity of all utility companies relies greatly on their ability to acquire younger talent with digital expertise. As it stands,2 out of 3 CIOs agree that there is a talent crisis. Businesses across all industries are finding it difficult to hire the new breed of experts who will enable companies to compete in the digital arena.
Utility companies cannot do this with aging infrastructures, technologies and business processes.
CIOs need to take the reins in leading investment initiatives for acquiring new tools and technologies. These technologies must appeal to the younger generation of workers who are needed to upgrade utility grids for the future. At the same time, the skills gap must be closed among older team members so they will opt to delay their retirement and continue working.
Despite all the buzz about digital transformation, the reality is that most utility companies are still more analog than digital. While there is a conscious effort to modernize infrastructure, these are often projects and not part of the core of the organization.
“Utilities have to change both their mindset and operating model to foster innovation. ‘Data is the new electricity’ means utilities must become technology companies.”
Digital innovation should be tied into a utility company’s business goals, both short-term and long-term. Organizations should stop talking about “digital innovation projects” and shift the conversation to center on Digital DNA.
Deloitte sums it up perfectly: “Digital is the pervasive thread through all of these disruptive forces—as a catalyst, a disruptor, and an enabler.”
Without Digital DNA, organizations cannot be a 100% digital utility. They will get stuck in an endless loop of implementing digital projects without really making changes to their business, operating and customer models.
A CIO needs to be the champion and ambassador for Digital DNA. A CIO should ensure that legacy systems take a backseat to more agile, flexible and easily scalable digital technologies. Getting stakeholder buy-in and appreciation is critical to this and the CIO should have a strong voice to address and minimize hesitations, objections and fears.
Professionals in the utility industry are used to dealing with fluctuations.
