High-tech investment powers up European utilities

NEWS European utilities will have to invest in IT if they want to succeed in an increasingly competitive market, according to a Datamonitor survey released yesterday. The research company predicts IT spend will reach $6.8bn by 2004 as companies scramble to compete in a deregulated market. The report warns: "A utility that cannot defend itself in the competitive environment is a utility that will not be around in ten years." Utility companies are "radically restructuring IT processes to take account of the new market conditions", the survey claims. It adds that greater emphasis has to be placed on customer relations management applications and ERP (enterprise resource planning) if the companies are to cut costs and improve customer services. The IT services industry is already benefiting from investment, as this year utilities will spend $1bn on hiring firms to manage installation and integration of IT systems, according to Datamonitor figures. Offer (the Office of Electricity Regulation) claims investment in IT in the UK has already started to reap rewards. A spokesman said: "The UK is really at the forefront of deregulation and is leading other markets on a worldwide basis. Part of that has happened because a lot of companies have put in place IT systems to enable them to do this. But other countries have yet to go through that process and are looking to the UK for guidance."