From Cost Centre to Value Driver: The New Role of IT in Utilities

Chris|September 1, 2025|

For decades, IT in utilities has been viewed as a cost centre — a necessary function to “keep the lights on” rather than a source of competitive advantage.

But that perception is shifting fast.

The pressure to decarbonise, digitise, and deliver better customer experiences is forcing utilities to rethink how they operate — and at the heart of that rethink is IT. No longer a support service, IT is now the engine driving strategic value, efficiency, and innovation.

The challenge? Many organisations still haven’t adapted their mindset or their operating model to reflect this new reality.

1. The Legacy of “Keep It Running”

For years, IT’s mandate was simple: maintain systems, protect uptime, and deliver projects when funding allowed. Success was measured in service levels and cost control, not business impact.

This made sense in a stable environment — but the utilities sector is anything but stable.

Regulatory change, environmental pressures, customer expectations, and data complexity have transformed the landscape. The IT function that simply keeps systems alive will soon find itself irrelevant.

To deliver value now, IT must evolve from caretaker to catalyst.

2. The Shift to Strategic Partner

Modern CIOs in utilities are no longer just technology leaders — they’re business enablers. The most forward-thinking utilities are positioning IT at the core of their strategy conversations, not at the end of them.

This shift requires a mindset change:

From project delivery to product ownership – IT owns services that evolve continuously, not projects that end at go-live.
From support to strategy – every IT investment should map to a business outcome.
From systems to solutions – technology decisions must be driven by data and value, not legacy vendors.

When IT becomes embedded in commercial and regulatory discussions, it moves from being a supplier to being a strategic partner.

3. Cloud and Data Modernisation: The Great Enablers

The foundation of this transformation lies in cloud architecture and data modernisation. Legacy on-premise systems cannot keep pace with regulatory agility, customer interaction volumes, or integration demands.

Cloud-native platforms deliver scalability, resilience, and integration flexibility — allowing utilities to respond to market and regulatory change in real time.

But cloud alone isn’t the answer. It must be underpinned by a modern data strategy — one that connects operational, customer, and regulatory datasets across the organisation.

Data is no longer the output of operations; it is the operation.

4. Embedding IT in Business and Regulatory Change

In the regulated utilities space, IT should sit at the centre of every transformation conversation. When regulatory changes are announced — whether PR24 in water or price controls in energy — the organisations that respond fastest are those where IT and business teams work as one.

Embedding IT early means:

Systems and data models are designed for compliance and value creation.
Reporting and analytics evolve seamlessly with regulation.
Change impact is absorbed by well-structured digital platforms, not firefighting teams.

When IT is an afterthought, compliance becomes costly. When IT is a partner, compliance becomes competitive advantage.

5. Moving from Technical Debt to Technical Dividend

Every utility carries technical debt — legacy applications, duplicated systems, manual processes. These are more than operational inefficiencies; they’re barriers to innovation.

The goal is not just to clear debt, but to generate technical dividend — a return on modernisation investment through improved agility, automation, and insight.

Steps to achieve it:

Consolidate overlapping platforms into modular ecosystems.
Automate repetitive data and process tasks.
Leverage integration layers (e.g. API gateways, ESBs) for flexibility.
Measure ROI not just in cost savings, but in speed and capability.

When technical debt becomes an intentional focus area, IT turns from a drag on performance into a driver of competitive advantage.

6. IT’s New Currency: Trust

As utilities digitise, trust becomes the critical currency — trust in data, systems, and leadership.

CIOs must lead this through:

Transparent governance and reporting frameworks.
Strong cybersecurity and resilience practices.
Clear accountability for data accuracy and integrity.
Open communication about risks and dependencies.

When business leaders trust IT, they include it in strategy. When they don’t, IT remains a service desk.

Trust is earned through delivery, not declarations.

7. Case in Point: The Digital Utility

Leading organisations are already showing what this evolution looks like:

IT teams embedded in operational directorates, not siloed in HQ.
Cloud-based customer and asset platforms replacing decades-old billing and SCADA systems.
Cross-functional product teams that own digital customer journeys end-to-end.
Real-time analytics feeding regulatory reporting, outage management, and carbon planning.

These utilities aren’t chasing transformation — they’re living it daily.

8. A New Operating Model for IT

The operating model of tomorrow’s IT organisation will look very different from today’s.

It will be:

Agile: working in short, iterative cycles focused on outcomes.
Data-centric: measuring success through insight generation and impact.
Partner-oriented: co-owning business KPIs, not just IT ones.
Platform-enabled: delivering modular capabilities that can evolve.

In short, IT will no longer be a department — it will be the platform on which the business operates.

Final Thought

The utilities of the future will be digital by design, not by retrofit. That means IT must evolve from maintaining systems to enabling strategy — from controlling cost to creating value.

When technology, data, and people align around business outcomes, IT stops being a cost centre and becomes what it was always meant to be: the heartbeat of transformation.