India Utilities ICT Market: Leveraging 3rd Platform Technologies to drive Digital Transformation

According to International Data Corporation’s (IDC) Forecast and Analysis 2013–2018 for the India Utilities ICT Market, IT spending by India utilities across hardware, software, and services will increase by an average 4.16% CAGR over a 5 year period to 2018. IT investments by utilities companies remain focused on delivering cost savings and efficiency gains, but change is in the wind.

Utility sector priorities highlight the increasing importance of reducing operational costs and churn followed by enhancing revenues in equal measure. These changes are also reflected in the role of IT amongst utilities organizations which are increasingly focused on strategic imperatives of enhancing security, social media engagement and managing and consolidating data sets. In 2018, it is estimated that IT spending by India utilities across hardware, software and services will increase to US $ 448 Million up from US $ 368 Million in 2014; with software investments being dominated by deploying cloud technology, improving service levels, driving agility and standardization.

Emilie Ditton, Head, Asia Pacific Energy Insights and Vertical Markets says, “The utilities sector is conservative but changing rapidly as organizations respond to a wave of disruptors, most critical is changing customer expectations. In the near term the most important focus of digitization is in customer engagement – through social networking, mobility and online engagement. The transparency and control that digital initiatives will deliver across operations will be the basis of competitive differentiation and enable cost savings and revenue growth, enabling utilities to compete in this changing market.”

Shalil Gupta, Associate Vice President – Insights and Consulting for IDC India & South Asia comments, “The Utility sector in India has adopted change – as Indian energy companies move from paper and manual processes to adopting 3rd Platform technologies such as automation, cloud infrastructure to drive mobility, data integration, CRM and more automated metering approaches.”

While ICT spending in the Utilities sector is conservative, investments in 3rd platform technologies continue. The momentum behind India utility organizations’ cloud investments, while only just at the beginning; it is expected that as utilities place an increased focus on connectivity assets within their operations, utilities will start to move more workloads to the cloud and take advantage of the cost savings that are available.

However, energy sector utilities facing stiff competition are also increasingly grappling with the dynamics of rapid urbanization, electrification of rural areas, and extending investments in sustainable energy. In commensurate measure, investments in infrastructure, smart grid, and managing risk and security are particularly important challenges that government-owned network operators in India are facing and that are driving their priorities.

Amongst strategic priorities, security/risk management, data consolidation, and CRM-related investments are the top investment priorities of India energy companies; reflecting the pivotal role of 3rd Platform in operations for utilities companies. As requirements change around reducing costs, increasing revenue and driving agility, Indian utilities companies will continue to invest significantly in those enabling technologies that will help them drive operational business value.

“Being a service sector, utilities companies will increasingly strive to deliver operational efficiencies, business value and transparency; which in turn will have a direct impact on the strategic investments into Transportation and Supply Chain management and digitizing their core networks and architecture.” says Gupta.