The digital transformation of Australian utilities

A recent research report published by Information Services Group (ISG), a global technology research and advisory firm, has found that Australian utilities are increasingly deploying new technologies, especially data analytics and machine learning (ML), as part of large-scale digital transformation.

According to the ‘2023 ISG Provider Lens Power and Utilities — Services and Solutions’ report for Australia, the traditionally conservative sector has pivoted more recently to engage with provider partners and invest in intelligent, data-driven systems in response to changing regulations, customer expectations and market needs.

“Digital transformation is no longer a choice for Australian utilities,” said Michael Gale, ISG partner in Australia. “After several years of upheaval, new technology adoption has become the next wave of disruption in the industry.”

There are several trends causing this rapid change, according to ISG. Population growth, urbanisation and changing weather conditions are triggering energy scarcity, while some fuel costs have risen. Traditional utilities face competition from new market entrants, while consumers expect an improved, omnichannel customer experience.

The report found that new technology investments in the industry span a wide range of initiatives. Grid modernisation, aimed at improved resilience, security and sustainability, is a major priority. Many utilities are increasing automation, taking a holistic business process management (BPM) approach to streamlining operations. They are making substantial investments in cloud infrastructure to replace legacy in-house systems and focus on their core competencies.

Further heightening the pressure, increasingly connected systems in Australian power grids have broadened the scope of potential cyber attacks, making it harder for utilities to manage risks, the report said. New regulations require critical infrastructure companies to strengthen cybersecurity.

“Even a relatively small cyber attack on a utility can threaten social and financial stability,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Experienced service providers are helping Australian utilities overcome a cybersecurity skills shortage to build essential protections.”

Other trends in the Australian power and utilities industry were also explored, including the growing deployment of microgrids in remote regions and the gradual transition to electric vehicles.

The report evaluated the capabilities of 30 providers across five quadrants: Intelligent Business Process Management Systems (iBPMS); Next-Gen IT Services; Grid Modernisation; Enterprise Asset Management (EAM); and Customer Information Systems (CIS) and Customer Experience (CX).

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