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After Years of Internalizing, Western European Utilities- External ICT Budgets Are Cautiously on the Rebound, According to a New IDC Energy Insights Study

IDC Energy Insights- latest annual survey of Western European utilities revealed that while ICT budgets are not expected to vary much over the next 12 months, external IT budgets are on the rebound. After years of internalizing external IT spending shares, this year-s survey results revealed a change in direction, with a large share of Western European utilities (39%) expecting to increase their external IT spending shares, even though by less than 5%. This will provide ICT vendors with strong customer service or level of support and services, along with low prices and low cost of ownership, with opportunities to win in the Western European utilities space, according to survey respondents. More insights are revealed in the IDC Energy Insights study, CIOs Agenda: What About IT Budget Allocation? – Results from the Western European Utilities Survey 2012 (IDC Energy Insights #EIOS05U, December 2012)
The study highlights the following key ICT budget allocation trends for Western European utilities in 2013:
Western European utilities identified the “integration of operational technologies with enterprise applications” as the area of most importance in 2013, sustaining IDC Energy Insights- assertion that the IT and operational technology (OT) worlds are continuing to converge in utilities sector.
Over the next 12 months, Western European utilities believe their key challenges will be “infrastructure constraints/scalability” and to “deliver required service level as expected by business.” The latter demonstrates CIOs- agenda will be much more focused on business/ organizational goals, than just IT as an enabler, going one step further from “better aligning IT with the business.”
The four leading business initiatives for Western European utilities in 2013 are “customer care enhancement,” “regulatory compliance,” “reducing operational cost,” and “product or services innovation. The economic downturn in many countries has escalated competition in a once stagnant market, bringing utilities to focus on their customers, while innovating and keeping costs down.” Customer care enhancement” was of notable importance to British utilities, which is appropriate considering the level of competition and very high switching rates more common to the U.K. than to the rest of Europe.
“The utilities industry in Western Europe has some very challenging times ahead,” said Gaia Gallotti, research manager, IDC Energy Insights. “Specifically pertaining to their IT departments, Western European utilities revealed that -infrastructure constraints/scalability- and -delivering required service level as expected by business- will be the two most critical challenges for 2013.”
The study, CIOs Agenda: What About IT Budget Allocation? – Results from the Western European Utilities Survey 2012 (IDC Energy Insights #EIOS05U , December 2012), analyzes the results of the annual IDC Energy Insights survey covering the utility industries in France, Germany, Italy, Spain, and the U.K. The study analyzes ICT budget spending distribution, areas of importance and key challenges for Western European utilities from an IT perspective, leading business initiatives to support IT decisions, utilities- urgent issues, and criteria adopted to select IT vendors and satisfaction with primary IT suppliers among utility enterprises in Western Europe. This is the second in a series of three reports on the survey covering utilities in Western Europe. The first report describes the IDC Energy Insights Survey methodology, while the third one will be focused on IT solutions priorities.
For more information or to arrange a one-on-one briefing with an IDC Energy Insights analyst, please contact Kanupriya at kanupriya@idc.com/+44 (0) 20898 77 111.

IDC Energy Insights assists energy businesses and IT leaders, as well as the suppliers that serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the utility and oil and gas industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world-s leading technology, media, research, and events company. For more information, please visit www.idc-ei.com or email info@idc-ei.com.

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