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Utility CIOs are under pressure to cut costs, but somehow need to manage the unexpected costs resulting from deployment of new smart grid technologies. A report from IDC Energy Insights, Utility IT Strategies, offers a look at what their peers are facing, how to defend budgets and strategies they should consider to make it work.
Some key findings in the report include the following:
· Utilities spend an average 2.5% of their revenue on IT compared to an all-industry average of 6.8%. Still, achieving IT efficiency and productivity is the top priority for IT investments.
· NERC CIP and other security requirements put a burden on IT staff.
· Smart grid initiatives bring with them unanticipated IT costs in IT infrastructure and continuing IT operations and maintenance.
· Technology developments will require that utilities address "bring your own device" and cloud offerings.
So, against that backdrop, what should utility CIOs consider? Here are a few recommendations from the report.
· Develop a cost benchmarking approach that can guide budget development, one that covers industry comparisons and pricing for commodities like hardware and infrastructure software.
· Include performance metrics to show how IT is doing as a department – and do it in such a way that the business recognizes the benefits it is getting and connect them with IT infrastructure.
· Demand management is for IT demand, not just energy demand. So, put a structure in place to manage the demands of the utility for technology. Also, include a project portfolio and tie those projects to changes in IT cost structure.
Click the link below for more details on report content or to order. 1
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