What Utilities need to know about leveraging emerging tech with limited resources

By Coy Wright (pictured), VP, Energy, Utilities, & Resources Industry Solutions, Rimini Street’.

It’s no understatement to say that the UK utilities sector has had a challenging few years. The sector has seen an ongoing energy crisis, regulatory changes as a result of Brexit, spiralling costs stemming from dependence on gas and oil imports, a growing threat of blackouts, and low levels of trust from consumers. It’s an almighty slew of challenges, only exacerbated by the encroaching deadline from the Paris Agreement, and the pressures from the business to invest in modernization with crunched IT budgets.  

However, implementing new technology takes significant resources, and must be done strategically, providing a strong business case and ROI for such investments. How can utilities players harness innovative and emerging tech, from AI and automation to green energy, while prioritizing the growing need for robust security, transparency, and data management systems? How much strain will this cause the utilities staff and their budget? 

Post Autumn Budget, where do Utilities find themselves?

Last week, all eyes were on the UK Autumn Budget. Today, Utility IT leaders are rapidly assessing how it will impact their ability to fund innovation. Managing both the challenges and opportunities presented by the Autumn budget, we’ll likely see UK enterprises and tech organisations innovating on a more modest scale, with them needing to optimise their budgets and IT roadmaps. For enterprises in the energy, oil, and gas sectors, confirmation of an increased windfall tax to 38% will see IT leaders addressing their spending, and likely diminishing digital transformation efforts in aid of “keeping the lights on.” Whilst the increased Windfall Tax wasn’t a surprise, it remains a concern for utility enterprises, especially those who suffer from inflexible financial and roadmap commitments. 

In the run up to the budgets release, the Treasury was clear in its ambition to make Britain a ‘Clean Energy Superpower.’ Thus far, Utilities have had to grapple between wanting to innovate in pursuit of sustainability goals, and not having the resources or capacity to make these industrial-level changes. And, given the major overhaul that will be needed to enact these initiatives – such as increasing solar and wind energy – many utilities will likely be prioritising continued service to their customers before enacting projects that benefit Net Zero. 

As a result, Utilities will have breathed a small sigh of relief when The Chancellor announced “record-levels” of investment into R&D projects, plans to deliver the modern Industrial Strategy, and support for high-growth areas such as nuclear energy.

Utilities aren’t facing a strategic shortfall, but a resources one

This isn’t a case of Utility IT leaders doubting whether innovation is needed, but what they may need to sacrifice to get there if they cannot free up additional resources to support their vision. Top tech priorities for the sector sit firmly with the adoption of emerging technologies, with global enterprise CIOs looking to invest heavily in AI to address rising IT costs. Doing so requires Utility leaders to optimise their asset utilisation, so they can focus on strategic initiatives.

People power, time, and money are all critical resources in advancing digital transformation. For Utility companies who want to do more than just keep the lights on, optimising these resources is a powerful opportunity for efficiency, profitability, and enhancing customer satisfaction. 

And one of the major budget lockups to organisations around the world is the cost of maintaining their ERP systems which are mission-critical to the business as systems of record. With many organisations spending up to 90% of their IT budget just keeping the lights on, solving for the rising cost by choosing third-party software support has proven to be a smart strategy for thousands of CIOs and CFOs as acknowledged by industry analysts. 

Three steps to optimising your limited resources

There are three key ways to optimise Utility’s limited resources, and their impact is far-reaching:

Assess and optimise your ROI: Utilities looking to reallocate budget towards forward-thinking digital transformation strategies should start by considering the value they’re receiving from current enterprise software investments. By assessing and optimising existing software, systems, and infrastructure, Utility companies will have a clear understanding of the ROI of their current systems, and whether change is needed. It’s no surprise that third-party support options are growing a following in the Utility industry, offering significantly lower support costs, allowing companies to reallocate resources to innovate at their own pace more quickly and without disruption.  

Extend the life of existing ERP systems: Digital transformation doesn’t have to be a complete overhaul of systems, and Utilities shouldn’t abandon current systems that are stable, effective and delivering results. By extending the life of current ERP systems and maintaining them at peak performance, Utilities can maintain service levels and build their digital strategies on robust foundations. Acting as a resource buffer zone, this will ensure resources are not wasted on technologies that misalign with your business goals and don’t deliver incremental value. 

Honour your customer, not your vendor: For utility companies, the focus should be on serving your customers, who want uninterrupted service and fair pricing. Taking back control of your IT roadmap is one of the most impactful ways to regain budget, resources, and time. Utility companies should consider resisting the vendor-imposed pressure and deadlines to upgrade their systems, only doing so if they can prove beneficial in enhancing business performance and competitive advantage. Act otherwise, and you face the risk of burdening your customer with the financial onus for your poor investment.

The Autumn Budget: a catalyst for innovation 

In the wake of the Autumn Budget, Utility companies are understandably concerned, but should not view the Autumn budget as a challenge. Instead, this is a pivotal opportunity to set in motion the process for innovation. Optimising resources will provide a greater level of flexibility and give Utility companies the breathing space to rebuild customer trust, honour the regulatory environment, align with sustainability goals, and leverage the latest technologies that will help their businesses thrive.