Energy Insights Foresees a Favorable Future for IT in Western European Utility Firms

"Survey data demonstrates that utilities in Western Europe appear to have a positive outlook for the near future and expect to either increase or keep their IT budget unchanged (41% and 45% respectively). Only less than 14% declare that they will decrease it," said Roberta Bigliani, EMEA research director, Energy Insights. "43% of utilities plan to increase their external IT spending. In terms of budget allocation, Energy Insights expects cost-cutting initiatives to continue and these increases will mainly be around routine infrastructure upgrades. This proves that despite interests in newer technologies, utilities are still focused on their backbone systems." The report analyzes IT budget spending distribution and patterns evolution, channel selection, and satisfaction with primary IT suppliers among utility enterprises in Western Europe. This report is one of a series of studies including the analysis of enterprise and vertical solution adoption and investment plans. Other key findings from the report include the following: When analyzing trends in IS budget allocation, the survey confirmed that routine infrastructure upgrades currently take the largest share of utilities' IS operating budgets. Allocation of the IS budget is split evenly between internal staff and external spending. Utility firms also proved to rely rather heavily on external consultants for support, with over 65% of respondents indicating their use. Furthermore, individual consultants are preferred, with the main scope of involvement being project management and defining a complete IT strategy. Utility firms identified "ease of doing business with" and "customer service" as clear winning points when choosing their primary IT supplier. Overall, the utilities industry appears to have positive expectations for the near future. Significant differences are evident on a country basis. However, stability is sweeping across Western European utility organizations, which expect to either increase or to keep their IS budgets unchanged. System integrators and consultants are considered the primary source of IT over the next 12 months. System integrators are even expecting to see significant increments in their share of a source's budget in the near future. When utility respondents were asked what their main areas of IT focus were, the answer was clear — integration. "Customer care/service enhancements" and "IT organization responsiveness and efficiency" were identified as the most important business initiatives for the utilities sector, while "quality of skills of internal IT department" is considered the most important when it comes to IT supporting a utility firm's business practices. This Energy Insights report, Western Europe, Utilities Industry, IT Budget Distribution and Channel Selection: IDC 2007 Survey (Doc #EIOS03P), provides an analysis of results of the annual IDC Vertical Market Survey covering France, Germany, Italy, Spain, and the U.K. Analysis is focused on the utilities industry and is based on 99 interviews carried out between August and November 2007. To purchase this report, visit www.energy-insights.com. About Energy Insights Energy Insights, an IDC company, is a leading global provider of research-based advisory and consulting services to the energy and utilities industry. Staffed by senior analysts with decades of industry-specific business and technology experience, Energy Insights provides full coverage of the energy industry value chain – from upstream to retail activities. Energy Insights provides a portfolio of offerings that are relevant to both IT and business needs. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. For more information, please contact: Cinzia Rinelli Marketing Manager, EMEA Industry Insights crinelli@idc.com +39 02.28457.367