The Future of Utilities: A Year of Transformation
In 2026, utilities are facing a structural shift: the need for reliability and affordability are overtaking decarbonization as the primary decision driver.
Industries
Energy & Utilities
Optimize your strategic direction and digital projects for defensibility in a transparent industry.
Industry-specific Understanding & Best-in-Market Solutions
Utilities are at a critical inflection point.
Decarbonization, grid modernization, reliability, affordability pressures, cyber risk, and regulatory scrutiny are converging and forcing utilities to modernize operations, technology, and customer engagement simultaneously.
ISG brings deep industry and regulatory expertise to help utilities operationalize AI, data, and cloud platforms in ways that strengthen grid resilience, improve operational performance, and stand up to regulatory scrutiny. We advise across IT, OT, and the enterprise to ensure technology investments deliver measurable, defensible outcomes.
ISG can help you:
- Rapidly reduce O&M costs through AI-driven automation, asset intelligence, and process optimization
Re‑design IT and data operating models to support grid modernization and enterprise‑wide decision‑making
Select and govern the right systems integrators and technology ecosystems for large‑scale capital and digital initiatives
Integrate or separate complex IT, OT, and data environments following mergers and divestitures
Design utility-specific vendor management, risk, and AI governance frameworks
Establish regulatory-grade benchmarks, oversight models, and defensible business cases, including expert testimony when required
Move forward with confidence:
De‑risk the design and deployment of modern, secure, AI-enabled platforms
Improve value realization during service renewals and sourcing transitions using data-driven performance insights
Ensure consistent, high-quality digital experiences across providers and platforms
Control the cost, risk, and compliance implications of cloud and next-generation technology adoption
Ensure Regulatory-Grade Benchmarks
Benchmarks built to stand up to regulatory scrutiny
Regulators increasingly require utilities to demonstrate that costs, programs, and investments are reasonable, efficient, and defensible. In this environment, not all benchmarks are created equal.
ISG delivers regulatory-grade benchmarking grounded in real operating data, not broad-based surveys or third-party datasets. Our benchmarks are designed to support executive decision-making, withstand regulatory review, and hold up under expert testimony.
ISG provides:
Insights from over 6,000 unique benchmarking engagements, supported by ISG’s proprietary database of operational and financial data, KPIs, and performance measures
Benchmarks calibrated by utility size, project scope, and support function, using repeatable methodologies with built‑in data integrity and validation
Project Benchmarking and Project Estimation as a Service (PEaaS) to evaluate capital programs, digital initiatives, and major IT investments helping utilities validate budgets, forecast total cost of ownership, assess delivery efficiency, and reduce the risk of cost overruns
ISG enables utilities to pinpoint the root causes of performance gaps and determine the right cost to serve. We also benchmark project cost, schedule, and delivery performance, providing greater transparency and confidence across large‑scale transformation and infrastructure programs.
ISG advisors are experienced in testifying to our benchmarking methodologies, project evaluations, and findings in regulatory proceedings worldwide giving utilities confidence that their data, decisions, and investments will stand up when it matters most.
Provider Research
ISG's full research report on the Utilities industry is a+60 pages, thorough comparison of needs, trends and providers in the industry. To access the full report and a complimentary briefing on it, contact us!
The market has moved from ambition to accountability.
AI investment is accelerating, but results remain uneven. Only one in four initiatives is meeting revenue impact expectations, at an average spend of $1.3M per use case. Enterprises are no longer asking whether AI works. They are being asked to prove that it pays.
What We Deliver
AI strategy, governance and intelligence, built for execution.
Autonomous Enterprise
Operations built for autonomous execution, not retrofitted for it.
We help you identify where AI agents deliver the most value, restructure workflows around them and build the accountability models that keep autonomous execution auditable. The enterprises that win won't be the ones that reacted. They'll be the ones that designed for it first.
Autonomy-Level Pricing
Pricing that reflects how AI-enabled services are actually delivered.
We give enterprises transparent, benchmarkable pricing models that tag each resource unit with the autonomy level used to deliver it. As AI capability advances, your pricing keeps pace. Both buyers and providers can quantify what that progress is worth.
AI & Software Intelligence
Build-versus-buy decisions grounded in what AI is actually delivering.
We bring analysis of more than $2.6 billion in tracked AI spend to every sourcing decision. Procurement, technology and finance leaders get the independent intelligence to rationalize vendor portfolios and hold providers accountable to measurable outcomes.
AI Governance
Governance that accelerates AI adoption rather than constraining it.
We embed controls at the point of data creation, define accountability for autonomous actions and build adaptive frameworks that keep pace with AI without impeding it. Enterprises that get this right don't just manage risk. They build the trust that lets them scale faster.
AI Strategy
AI investment aligned to where impact is most achievable.
We ground strategy in research across 2,400 enterprise use cases, aligning investment to where impact is proven and designing the data, talent and governance foundations that move AI from pilots into the workflows that drive commercial results.
AI Maturity Index
A clear view of where you stand and a roadmap to where AI starts delivering.
We benchmark your AI readiness against peers across 75 countries, identify the dimensions holding you back and give you a personalized roadmap to close the gap.
The market today
Enterprise AI has moved out of IT and into the revenue line.
AI investment is shifting decisively toward revenue-generating functions. CRM automation, sales enablement and forecasting have replaced chatbots and IT productivity tools as the leading use case priorities, reflecting enterprise recognition that productivity gains alone do not satisfy board-level scrutiny. At the same time, use cases in production have doubled since 2024, and the portfolio is diversifying rapidly, with over 300 distinct function and industry-specific use cases now in active deployment.
ISG research across 2,400 enterprise use cases shows that the strongest AI returns are currently concentrated in compliance, risk management and quality control, not in the growth and cost outcomes most enterprises originally set out to achieve
The gap between where enterprises are investing and where AI is actually delivering is the defining commercial tension of 2025. Organizations that close it by targeting functions with structured, revenue-attributable data and clear ROI measures will establish performance benchmarks that compress the window for competitors still cycling through pilots. The standard is being set now.
Where enterprises are feeling the pressure
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Business outcomes are lagging AI ambitionEnterprises are scaling Al faster than they are realizing value from it. The number of use cases in production doubled between 2024 and 2025, yet only one in four initiatives is meeting revenue impact expectations, and broad cost savings remain elusive. At an average spend of $1.3M per use case, the ROI gap is sharpening board-level scrutiny and forcing a harder question: are we building Al for impact, or for activity?
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Data infrastructure exposing deferred investmentAl does fail in isolation. It fails on the foundations beneath it. Most enterprises are running modern Al on architectures built for reporting and compliance. Generative and agentic Al demand real-time contextually rich, governed data at the point of use. Without it, pilots stall and value dissipate before it reaches the business.
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The barrier to scale is organizational, not technicalOrganizational readiness as the bigger constraint on Al adoption, not talent or tooling. Workflows haven't been redesigned. Decision rights haven't shifted. Enterprises that treat Al as a pure technology deployment, without investing in the human side of adoption, consistently report underwhelming ROI.
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Agentic AI is outpacing governanceAs Al moves from generating outputs to executing tasks autonomously, the governance gap widens. Agentic Systems introduce a new class of risk that static compliance frameworks were never designed to catch. Governing what Al does, not just what it produces, is now a business-critical requirement.
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