17
G00297531 2016 CIO Agenda: A Utility Perspective Published: 19 February 2016 Analyst(s): Zarko Sumic, Chet Geschickter, CD Hobbs, Jean-Marc Lejeune Many companies are using digital to reimagine their business and operating models. However, utility CIOs continue to focus on operational benefits, while citing funding as their top barrier. Opportunities include focusing more on innovation and transformation and increasing business alignment. Key Findings Utility CIOs perceive IT funding/budgets to be the most common barrier to achieving their objectives. Utility digital business focus continues to be operational. Utility CIOs selected more revenue from better operation and cost reduction as the main expected outcomes from digital. BI/analytics, mobile and OT/IoT are the top three technology areas utility CIOs are planning to increase spend on. Though BI/analytics continues to be a perennial favorite among all CIOs, mobile and OT/IoT are placed significantly higher for utility CIOs than the global CIO sample. Utility CIOs consider security and cyber-risk threats a higher concern than competitive and commercial threats. That reflects both the critical infrastructure operator role they play, as well as the "protected" status of utilities, in particular those operating in regulated markets. Utility CIOs are starting to realize the importance of bimodal (at a similar level as global CIOs), although a much smaller percentage of utility CIOs say their company has bimodal (ambidextrous) business. Utility CIOs, more than global CIOs, see themselves in charge of digital transformation and innovation, though their focus is more on digitization than on digitalization. Recommendations Engage in discussions with utility business leadership on the long-term impact of digitalization and the threats to competitiveness due to emerging business models, new market entrants and competitors who have strategic vision. Adopt bimodal IT to demonstrate how digital can be used for innovation and business transformation and, thereby, bolster your IT budgets.

2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

  • Upload
    others

  • View
    1

  • Download
    0

Embed Size (px)

Citation preview

Page 1: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

G00297531

2016 CIO Agenda: A Utility PerspectivePublished: 19 February 2016

Analyst(s): Zarko Sumic, Chet Geschickter, CD Hobbs, Jean-Marc Lejeune

Many companies are using digital to reimagine their business and operatingmodels. However, utility CIOs continue to focus on operational benefits,while citing funding as their top barrier. Opportunities include focusing moreon innovation and transformation and increasing business alignment.

Key Findings■ Utility CIOs perceive IT funding/budgets to be the most common barrier to achieving their

objectives.

■ Utility digital business focus continues to be operational. Utility CIOs selected more revenuefrom better operation and cost reduction as the main expected outcomes from digital.

■ BI/analytics, mobile and OT/IoT are the top three technology areas utility CIOs are planning toincrease spend on. Though BI/analytics continues to be a perennial favorite among all CIOs,mobile and OT/IoT are placed significantly higher for utility CIOs than the global CIO sample.

■ Utility CIOs consider security and cyber-risk threats a higher concern than competitive andcommercial threats. That reflects both the critical infrastructure operator role they play, as wellas the "protected" status of utilities, in particular those operating in regulated markets.

■ Utility CIOs are starting to realize the importance of bimodal (at a similar level as global CIOs),although a much smaller percentage of utility CIOs say their company has bimodal(ambidextrous) business.

■ Utility CIOs, more than global CIOs, see themselves in charge of digital transformation andinnovation, though their focus is more on digitization than on digitalization.

Recommendations■ Engage in discussions with utility business leadership on the long-term impact of digitalization

and the threats to competitiveness due to emerging business models, new market entrants andcompetitors who have strategic vision.

■ Adopt bimodal IT to demonstrate how digital can be used for innovation and businesstransformation and, thereby, bolster your IT budgets.

Page 2: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

Table of Contents

Survey Objective.................................................................................................................................... 2

Data Insights.......................................................................................................................................... 3

Business Context............................................................................................................................. 3

The Focus on Digital Has Been Operational So Far, but There Is Greater Potential......................4

Substantial Perception of Threats and Business Risk........................................................................5

IT Spending and Technology Investment Priorities............................................................................ 7

IT Spending Is Going Up — Finally..............................................................................................7

Analytics, Mobility and OT/IoT Dominate IT Spending Focus.......................................................8

IT Organizational Models and Management Practices.....................................................................11

Utility CIOs Are Trailing in Building Out a Bimodal Platform........................................................11

Utility CIOs Feel That Inadequate Budgets Are Their Biggest Barriers to Success..................... 12

CIOs Are Stepping Up to Lead Digital Transformation and Innovation....................................... 13

CIOs Are Enjoying Opportunities to Lead but Must Handle the Politics and Make Space and

Time......................................................................................................................................... 14

Methodology.................................................................................................................................. 15

Gartner Recommended Reading.......................................................................................................... 15

List of Figures

Figure 1. Top Three Expected Outcomes and/or Impacts That Digital Represents.................................. 5

Figure 2. New Competitive and Commercial Threats vs. Security and Cyber-Risk Threats...................... 6

Figure 3. Threats From Digitally Driven Companies From Traditional Industry Competitors vs. Digital-

Enabled Companies From Other Industries.............................................................................................7

Figure 4. IT Spending Expectations for 2016.......................................................................................... 8

Figure 5. Where Companies Will Be Spending New/Discretionary Funding in 2016...............................10

Figure 6. Approach to Bimodal, Utilities vs. Global................................................................................12

Figure 7. Biggest Barrier to Achieving CIO Objectives........................................................................... 13

Figure 8. Where Is the CIO Designated as the Person in Charge?.........................................................14

Figure 9. What Utility CIOs Like and Dislike Most About Their Role....................................................... 15

Survey ObjectiveEvery year, Gartner surveys the members and prospects of its Executive Programs to expose keypriorities, opportunities and threats facing CIOs across the globe. The annual CIO survey is thelargest of its kind, with CIO respondents in 84 countries and all major industries, representing

Page 2 of 17 Gartner, Inc. | G00297531

Page 3: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

approximately $11 trillion in revenue/public-sector budgets and $250 billion in IT spending. Of the2,944 respondents to the 2016 Gartner CIO Survey, 131 were utility (electric, gas and water) CIOs.Sixty-four of them were from EMEA, 44 from the Americas (31 North America and 13 Latin America)and 23 from Asia/Pacific.

This research compares responses from utility CIOs to those of their peers from other sectors. Ouranalysis of utility CIO responses identifies key industry priorities and trends in comparison toresponses from previous years, and highlights important differences with the broader CIOpopulation.

The survey focused on hypotheses concerning:

■ Business context

■ IT spending and technology investment priorities

■ IT organizational models and management practices

Data InsightsFor every leading enterprise, digital business is moving from an innovative trend to a corecompetency. Digital is different for every enterprise and poses unique challenges for each in termsof talent, structure, innovation and the role the CIO plays.

Leveraging digital technologies to transform the traditional energy provisioning business model, aswell as optimize delivery of traditional commodity services, has become a top priority amongbusiness and technology leaders in the utility sector. Investments in digital continue to rise, and howto apply digital technologies to improve business performance continues to be a chief focus forGartner clients globally. Gartner's survey of 2,944 CIOs, conducted in late 2015, included 131 utilityCIOs. This year's data indicates that utility CIOs expect significant benefits from digital, but with astronger focus on operational benefits than their global peers and less concern about impacts oncompetition, reflecting an ongoing sentiment of operating in protected regulated markets. UtilityCIOs' investment priorities and concerns also vary from their global peers, reflecting the complexityof managing spatially dispersed assets and workforce, and the challenges of operating criticalinfrastructures in the digital era.

Business Context

The emergence of digital business — driven by unprecedented computational capabilities, ease ofaccess to digital information assets, and a growing number of people, businesses and thingsconnected through IoT — enables the creation of new business designs. In the utility sector, inparticular, where the core business of supplying energy to a "passive" consumer has been virtuallyunchallenged for almost a century, digital business will play a key role as an enabler of energy-provisioning transformation and empowerment of consumers. Utility CIOs have an opportunity tolead this transformation by leveraging universal connectivity between spatially distributed physicalassets on one side and digitally engaged consumers on the other side. This creates new

Gartner, Inc. | G00297531 Page 3 of 17

Page 4: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

opportunities such as the creation of new information-centric energy-provisioning models based oncollaboration.

As the implications of digitalization play out, it is becoming clearer that hard-coded business andoperating models will not suffice. Leading economists have noted the increasing prevalence ofplatform business models, where multiple networks of stakeholders bring value to each other byexploiting network effects (positive feedback that increases value through more customers havingand using a product or service). Technologists have long recognized the power of platformapproaches to information and technology architecture. What is new is that platform dynamics arenow being applied to create value in all aspects of business.

The Focus on Digital Has Been Operational So Far, but There Is Greater Potential

Survey data indicates that utility CIOs are, in general, aligned with their peers in other industries inassessing expected outcomes and impacts that digital represents for their enterprises. As can beseen from Figure 1, utility CIOs agree with their peers that digital business will have the biggestimpact in driving more revenue from improved operations (63% and 66%, respectively). Cost-reduction expectation ranked second for utilities and was a top three pick for 50% of utilityrespondents, versus ranking fourth and 39% for all CIOs — indicating a higher focus on theoperational benefits of digital business by utility CIOs.

Despite the current operation focus, utility CIOs recognize the impact digital business can make ongrowth and transformation areas. Utility CIOs' expectations for business growth through digitalchannels are identical to their peers (48%). This reflects utilities' focus on customer engagementand realization of untapped business potential, which can be captured through digital channels.

Expectations for tighter partnerships by utility CIOs are higher than for their peers (44% vs. 37%).Utilities traditionally use partners, service providers and trade allies in business areas such as assetmanagement (tree trimming, construction, asset maintenance, mutual assistance during stormrestoration), customer service (call center overflow, appliance maintenance and installation), supplychain, engineering services and IT outsourcing (application maintenance and BPO). As the industrycontinues to focus on the use of external resources as an extension of the talent pool or as a costmanagement measure, the benefits of leveraging digital technology become increasinglycompelling.

One surprise is the expectation that utility CIOs share the same level of expectation as global CIOsfor the impact of digital on creating new markets (26% vs. 27%). Though many utilities operate intraditional regulated markets (as can be seen from the significantly lower expectation of the impactof digital on competition), the disruption they feel as a consequence of penetration of prosumersand falling revenue from traditional services is forcing them to consider new business opportunities,many of them enabled through digitalization.

Page 4 of 17 Gartner, Inc. | G00297531

Page 5: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

Figure 1. Top Three Expected Outcomes and/or Impacts That Digital Represents

Utilities: n = 48; Global: n = 941

Source: Gartner (February 2016)

Substantial Perception of Threats and Business Risk

The disruptive nature of digital business and the required investment in risk management haven'tpassed unnoticed by utility CIOs. A significant majority of CIOs, both globally and in the utilitysector, believe that the digital world is increasing existing risks and creating new and additionalthreats to their environment.

Figure 2 compares utility CIOs' and all CIOs' assessment of perceived security threats and newcommercial competitive threats on their respective businesses. Utility CIOs are more concernedabout security and cyber-risk threats (72%) than their global peers (59%), consistent with their roleas operators of critical national infrastructures and providers of ubiquitous services. As most utilitiesoperate in a regulated environment (including network operators in competitive energy markets), thefear of competitive commercial threats is lower among utility CIOs (28% vs. 41%). In other words,utility CIOs are more inclined to see the need to secure the existing infrastructure than to fend offthreats to the business and competitive threats. However, even 28% is a significant level ofconcern.

Gartner, Inc. | G00297531 Page 5 of 17

Page 6: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

Figure 2. New Competitive and Commercial Threats vs. Security and Cyber-Risk Threats

Utilities: n = 46; Global: n = 961

Source: Gartner (February 2016)

Figure 3 reinforces the last point — the sense of operating in a predominantly noncompetitiveenvironment. Consequently, utility CIOs appear to be more concerned than their peers with thethreats posed by new entrants into their market (such as providers of residential solar services orNest's entry in the home energy market) than the ability of their peers to leverage digitaltechnologies for competitive advantages.

Page 6 of 17 Gartner, Inc. | G00297531

Page 7: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

Figure 3. Threats From Digitally Driven Companies From Traditional Industry Competitors vs. Digital-EnabledCompanies From Other Industries

Utilities: n = 44; Global: n = 928

Source: Gartner (February 2016)

IT Spending and Technology Investment Priorities

Pressure is increasing to continue reducing operating costs and improving workforce productivity. Inan effort to address these challenges, utilities have deployed operational technologies such assmart meters and distribution asset sensors. Information management and analytics practices havenot kept pace with the data deluge, with the result that many anticipated benefits have been slow toarrive.

IT Spending Is Going Up — Finally

Utility CIOs feel they have a lot on their plates, and funding for IT projects/budget tops the list as thebiggest barrier to achieving objectives. However, in 2016, utility CIOs are finally getting optimisticabout their budgets. As depicted in Figure 4, utility CIOs' expectations for IT spending exactlymatch their peers — 51% expect higher spending, while 36% expect budget to stay the same (34%for all their CIO peers), and just 13% of utility CIOs expect their budgets to drop (compared to 15%of their peers). For utilities, this is a striking change from last year's survey, where budgetexpectations were largely negative. In last year's CIO survey, just 30% of utility CIOs expected theirbudgets to increase, while almost half (49%), expected it to stay flat, and 21% expected it todecrease. As EMEA utility CIOs make up almost 50% of the sample (64 out of 131), the positive

Gartner, Inc. | G00297531 Page 7 of 17

Page 8: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

sentiment may reflect improving market conditions and stabilization as the EU continues its gradualeconomic recovery.

Figure 4. IT Spending Expectations for 2016

Utilities: n = 103; Global: n = 2,242

Source: Gartner (February 2016)

Analytics, Mobility and OT/IoT Dominate IT Spending Focus

The utility sector continues to use technology to improve its traditional core business process areasand make them "smarter" (such as deploying smart meters in more than 100 million households).However, technology adoption and innovation in the sector haven't kept pace with development ingeneral-purpose technologies — in particular, those such as mobile and social that are used at theedge of the grid, driven by IT consumerization.

When asked for the top three areas where their utility will be spending the highest amount of new/discretionary spending, CIOs say that BI/analytics, a perennial favorite, once again ranks first acrossall industries, including utilities (see Figure 5). However, notable differences for utility CIOdiscretionary funding include mobile — which utility CIOs rank second (same as in 2015 CIOsurvey), while it is sixth for all CIOs — and operational technologies/IoT, which ranks third in 2016for utility CIOs (it was sixth for utility CIOs in 2015) but is ranked No. 16 for all CIOs. In fact, theproportion of utility CIOs citing OT/IoT is five times higher than the broader CIO population.

The universal trend toward measuring and improving business performance and monetizing bigdata is fueling investments in analytics in the utility sector. Analytics also becomes a key enablingtechnology as utilities evolve toward information-centric enterprises. Following rapid deployment of

Page 8 of 17 Gartner, Inc. | G00297531

Page 9: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

smart metering and other operational sensor technology in territories around the world, manyutilities now have a large amount of data at their disposal. The push to leverage smart metering andother asset performance data obtained through these sensors and smart devices is driving thedevelopment of numerous use cases along utility core business process life cycles, including asset,commodity, customer and revenue (see "Top Use Cases for Meter Data Analytics Across the UtilityValue Chain" and "Expand Utility Analytics to Optimize Your Grid").

The unique nature of the utility sector in having a large amount of spatially distributed assets is akey factor driving higher utility CIO prioritization of mobile, compared to all CIO respondents(second versus fifth). Mobility provides opportunities to improve field service effectiveness (see"Market Guide for Mobile Workforce Management Systems for Utilities"). Our interactions with utilityclients also indicate that the industry lags behind many other industries in embracing the mobilechannel, both for customers and for white-collar workers. Many utilities are just getting started withcustomer-facing mobile apps (see "Best Practices for Creating and Delivering CompellingCustomer-Facing Utility Apps") and evaluating options for development tools and channel support,including applying responsive design to create mobile-friendly websites, as well as downloadablemobile apps for the two leading smartphone platforms, Android and iOS.

OT/IoT placement is consistent with our observation that the utility industry remains one of the moreadvanced industries in terms of operational technologies and continues to place a high priority inthis area. This is a consequence of significant investments, which that sector made in operationaltechnology for monitoring the integrity of generation and delivery infrastructure and controllingassociated technical processes. The deployment of sensors to monitor and manage theperformance of assets (see "Market Guide for Asset Performance Management") is also a big driverof the interest in OT/IoT by utilities.

The utility industry was where we first identified and reported the IT and OT convergence trend in2006. Wide deployment of sensors, including smart meters, used for monitoring real-timeperformance of the physical asset and energy consumption, respectively, has resulted in a keeninterest in connectivity. The rapid expansion of IoT across all domains and sectors — includingdevices customers can use for energy management — may be a factor driving OT/IoT higher up thelist of priority technologies (see "Forecast: Internet of Things — Endpoints and Associated Services,Worldwide, 2015").

One notable area that has changed its position is CRM, which utility CIOs in the 2016 survey rankedhigher than their peers (seventh vs. eleventh). They also rated it higher in 2016 than in 2015 (CRMwas in ninth position for utilities last year). This is consistent with our team's observation that digitalcustomer engagement is rising in importance among our utility clients as they seek to close the gapin customer experience versus other consumer service industries, to meet rising expectations fromregulators, and to drive customers toward self-service and electronic billing channels to reduceoverall cost to serve.

Gartner, Inc. | G00297531 Page 9 of 17

Page 10: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

Figure 5. Where Companies Will Be Spending New/Discretionary Funding in 2016

Utilities: n = 131; Global: n = 2,944

Source: Gartner (February 2016)

Page 10 of 17 Gartner, Inc. | G00297531

Page 11: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

Somewhat surprisingly, security continues to be ranked slightly lower by utility CIOs, compared toall other CIOs (eighth vs. seventh). This position is consistent with the position security had in our2015 CIO survey, which again may reflect the view of utility CIOs in Europe (the majority of our utilityCIO responders), where privacy is perceived as more important. Based on our interaction with ourclients, the sentiment among utility CIOs in NA tends to be opposite.

Utility CIOs' planned investment in cloud lags their peers planned investment (sixth vs. thirdposition), and it is slightly lower than in 2015 (where it was in fifth place). This reflects regulatedutilities' preferences toward capital expenditures, rather than operations and maintenance costsassociated with a cloud model and the, consequently, less mature cloud offering from vertical utilitytechnology providers.

IT Organizational Models and Management Practices

Utility CIOs Are Trailing in Building Out a Bimodal Platform

Bimodal has been misinterpreted by many as simply the introduction of agile tools andmethodologies like Scrum. But it is more than that; the defining characteristic of bimodal is that anorganization has two different approaches to IT and, ultimately, to the entire business — also knownas ambidextrous business running in parallel. One mode is suitable for more predictable work(including operations and traditional development), the other for exploratory work. Each moderequires a different subculture, tools, approach and metrics. The far end of the bimodal journey isseparation between Mode 1 IT and other business function "factories," and Mode 2 multidisciplinaryteams that stay together for the long term, ever deepening the digitalization of a particular aspect ofthe business (such as customer service, asset management or entry into electric mobility).Workflows between the two modes of bimodal are based on the need to exploit versus explore.

Digital business is bringing change to the utility sector. In the past, a switch from an integrated,regulated business (Utility 1.0) into a competitive utility business (Utility 2.0) was binary, as utilitieshad to operate on either one or the other model. Unlike previous change, the emergence of thedigital utility business (Utility 3.0), driven by digitalization and innovation at the edge of the grid, willbe slow and evolutionary. Utilities will have to perform under the traditional regulatory model,continuing to be a cloud provider of ubiquitous, reliable and economically priced commodityservices (using a Mode 1 approach), while transforming to address pressure from prosumerizationto enable innovative digital business models (using a Mode 2 approach).

Transformation will be necessary to avoid losing revenue due to a drop in energy sold from the gridand losing market share to new entrants that are more skillful in digital business. In addition,directives from regulators who are searching for a sustainable and more inclusive regulatoryframework (such as the New York State Public Service Commission's "Reforming the Energy Vision"initiative or the European Union's "New Energy Market Design" directives) will be an impetus forbusiness transformation.

An important thing to notice is the relatively small sample of utility CIOs (roughly 25%) who feltcomfortable providing an answer to the question: "Does your company have bimodal IT, or does itplan to have it in the next three years?" This is a lower percentage than reported by global CIOs,

Gartner, Inc. | G00297531 Page 11 of 17

Page 12: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

where one-third responded to this particular question (see Figure 6). This implies that bimodal as anIT operating paradigm is not as well understood or practiced by utility CIOs, compared to theirpeers from other industries. Although a sample of utility CIOs who answered this question hasindicated a high level of adoption of bimodal IT (even higher that their peers, 33% vs. 23%), the factthat only 6% of utility respondents reported that they have both bimodal IT and business, comparedto 15% of their peers, indicates that maturity of bimodal management practices in the sector is stilllow. Instead of applying ambidextrous business practices — that is, by maintaining the traditionalbusiness model and exploring the new energy provisioning model in the "transforming whileperforming" fashion — utilities continue to be focused on traditional service delivery. In addition, itappears that some utility CIOs equate tactical use of agile IT development methodologies andadaptive sourcing with true bimodal IT.

Figure 6. Approach to Bimodal, Utilities vs. Global

Utilities: n = 33; Global: n = 948

Source: Gartner (February 2016)

Utility CIOs Feel That Inadequate Budgets Are Their Biggest Barriers to Success

Money (not enough of it) tops the list of barriers to achieving objectives for utility CIOs, whose peersare most concerned about skills/resources (see Figure 7). A related issue, IT-business alignment,ranked second for utility CIOs. We say it's related, because if the business is more aligned with IT,the business is probably more likely to fund it. Together, these top two utility CIO concerns comprisenearly half the responses (45%), with skills/resources and capacity/willingness to change tied at10%. The broader universe of CIOs sees skills/resources as the top barrier (22%), followed byfunding/budgets (15%) and culture/structure of the organization (12%). Note that the percentage ofutility CIOs concerned about funding is double that of their peers. It appears that there are

Page 12 of 17 Gartner, Inc. | G00297531

Page 13: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

opportunities for utility CIOs to learn how to amplify the business case for IT funding from theirpeers in other industries.

Figure 7. Biggest Barrier to Achieving CIO Objectives

Utilities: n = 29; Global: n = 555

Source: Gartner (February 2016)

CIOs Are Stepping Up to Lead Digital Transformation and Innovation

One thing that will not change is that leadership is critical for all business success. IT and digitalbusiness are no different in that respect. Having strong and clear leadership as the IT and digitalbusiness worlds evolve continues to be critical.

Gartner has been following the rise of the chief digital officer (CDO) in the recent past, predictingthat the CDO role will be influential for a few years, and then die away as digital businessconsiderations are embedded in every business and IT role, and as strategic CIOs take on digitalleadership. This evolution seems to be happening more quickly than expected, with CDO growthstalling.

Our 2016 survey shows that 39% of all CIOs say they are stepping up and taking the digitaltransformation leadership role, and 34% say they are taking on innovation leadership (see Figure 8).Note that this data refers to the question: "In which areas are you (the CIO) designated as theperson in charge?" Thus, this data doesn't represent simply participating; it represents taking on aleadership role.

Gartner, Inc. | G00297531 Page 13 of 17

Page 14: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

Figure 8. Where Is the CIO Designated as the Person in Charge?

Source: Gartner (February 2016)

A higher percentage of utility CIOs see themselves as leading digital transformation and innovationin their enterprises, compared to all CIOs. Fifty-one percent of utility CIOs have reported themselvesas designated CDO versus 39% of their peers. Similarly, the percentage of utility CIOs who seethemselves as leading innovation initiatives (47%) is much higher than that of their peers (34%).

Though the number appears very high, in particular considering the utility sector tends to be moreconservative, the reason for such a result is probably the interpretation of digital in the utilitycontext. In the utility sector, it is more about digitization rather than digitalization (optimizing existingbusiness processes, rather than completely transforming business models). In that context, utilitiesdo not need a true digital leader capable of leading a full digital transformation, and CIOs can takeon that task. In other sectors, confronted with a more profound digitalization, CIOs usually do nothave enough credibility to become transformational business leaders.

CIOs Are Enjoying Opportunities to Lead but Must Handle the Politics and Make Space andTime

What comes through loud and clear is that utility CIOs are excited by the opportunity and theimperative to lead and impact the business, but they are concerned about their ability to cut throughorganizational policies, processes and politics. They are also worried about the sheer volume andpace of change (see Figure 9). Existing maxims apply here: Free up time through delegation andmore aggressive prioritization, and use that time to influence and increase enterprise digital savvyand build stakeholder power.

Page 14 of 17 Gartner, Inc. | G00297531

Page 15: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

Figure 9. What Utility CIOs Like and Dislike Most About Their Role

Source: Gartner (February 2016)

Methodology

This research is based on data collected for the 2016 CIO survey. Using an online survey, Gartnercanvassed Executive Programs members and other IT leaders between 4 May 2015 and 24 July2015. Gartner collected input from 2,944 CIO respondents in 84 countries and across majorindustries and the public sector. Together, these organizations represent approximately $11 trillion inrevenue and public-sector budgets, and $250 billion in annual IT spending.

Gartner designed the survey to prove or disprove a series of hypotheses devised by a core team ofGartner research analysts and Executive Programs representatives. The research involved extensivereview prior to publication. The findings from the total dataset were published in their entirety as"Building the Digital Platform: The 2016 CIO Agenda."

Gartner Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"Building the Digital Platform: The 2016 CIO Agenda"

"Top Use Cases for Meter Data Analytics Across the Utility Value Chain"

"Expand Utility Analytics to Optimize Your Grid"

"Market Guide for Mobile Workforce Management Systems for Utilities"

"Market Guide for Asset Performance Management"

"Best Practices for Creating and Delivering Compelling Customer-Facing Utility Apps"

"Forecast: Internet of Things — Endpoints and Associated Services, Worldwide, 2015"

Gartner, Inc. | G00297531 Page 15 of 17

Page 16: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

"Hints and Tips on Using Gartner Numbers When Reviewing IT Spending Plans"

Evidence

This research is based on data findings from the 2016 Gartner CIO Survey. The original survey datawas collected online from 2,944 members of Gartner Executive Programs and other IT leadersbetween 4 May 2015 and 24 July 2015.

More on This Topic

This is part of an in-depth collection of research. See the collection:

■ 2016 CIO Agenda: Global Perspectives on Building the Digital Platform

Page 16 of 17 Gartner, Inc. | G00297531

Page 17: 2016 CIO Agenda: A Utility Perspective · opportunities such as the creation of new information-centric energy-provisioning models based on collaboration. As the implications of digitalization

GARTNER HEADQUARTERS

Corporate Headquarters56 Top Gallant RoadStamford, CT 06902-7700USA+1 203 964 0096

Regional HeadquartersAUSTRALIABRAZILJAPANUNITED KINGDOM

For a complete list of worldwide locations,visit http://www.gartner.com/technology/about.jsp

© 2016 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. Thispublication may not be reproduced or distributed in any form without Gartner’s prior written permission. If you are authorized to accessthis publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information containedin this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy,completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. Thispublication consists of the opinions of Gartner’s research organization and should not be construed as statements of fact. The opinionsexpressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues,Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company,and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner’s Board ofDirectors may include senior managers of these firms or funds. Gartner research is produced independently by its research organizationwithout input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartnerresearch, see “Guiding Principles on Independence and Objectivity.”

Gartner, Inc. | G00297531 Page 17 of 17