AI Adoption Accelerates the Modernization of North America’s Power and Utilities Sector
Power and utilities enterprises throughout North America are undergoing a significant transformation, driven largely by the rapid introduction of artificial intelligence (AI), advanced analytics, and data-centric technologies into operational environments. According to a newly released research report by Information Services Group (ISG), an AI-focused global technology research and advisory firm, utilities across the region are increasingly embracing digital solutions as they pursue more predictive, proactive, and cost-efficient operational models. The 2025 ISG Provider Lens® Power and Utilities Industry — Services and Solutions report for North America outlines how utility companies are adapting to heightened regulatory demands, growing system complexity from renewable and distributed energy sources, and rising expectations for digital customer engagement, all while contending with constrained budgets and long-term infrastructure requirements. The report underscores that the adoption of AI-enabled platforms is not merely an enhancement but a necessary step toward maintaining reliability, affordability, and resilience as the industry navigates an era of sweeping change.
Growing Pressures Drive the Shift Toward Predictive and Proactive Operations
The ISG report emphasizes that utilities are facing a steep rise in operational challenges as distributed energy resources (DERs), electric vehicles, smart home technologies, and more granular customer service expectations multiply the number of variables influencing the grid. These pressures are compelling utilities to transition from traditional reactive operating models—where actions are taken after system failures or disruptions occur—to predictive and proactive frameworks that prevent issues before they arise. Korey Barnard, partner at ISG Energy & Utility, notes that the increasing number of renewable energy mandates, decarbonization objectives, and grid modernization requirements has forced companies to rethink long-standing processes. The integration of AI is emerging as a critical mechanism enabling utilities to maintain service reliability without overextending capital budgets or compromising sustainability initiatives. As Barnard explains, achieving decarbonization goals while maintaining affordability is a complex balancing act, and AI-powered platforms allow utilities to approach this challenge with greater precision and scale.
AI and Advanced Digital Platforms Become Central to Utility Operations
The report details how AI, including generative AI and machine learning, is being integrated into daily utility operations with remarkable speed. These technologies are now central to addressing longstanding pain points, particularly those related to downtime, asset management, field workforce coordination, and storm response. Utilities are using AI-driven analytics tools to improve outage prediction and restoration accuracy, helping minimize customer interruptions and reduce operational expenditures. Machine learning models are increasingly being deployed to predict equipment failures well before they occur, allowing companies to schedule maintenance work more efficiently and extend the lifespan of critical assets. The adoption of these digital solutions reduces manual labor, lowers overall spending on repairs, and enhances grid performance—improvements that become increasingly important as infrastructure ages and capital budgets remain tightly constrained across the industry.
Digital Innovation Enhances Asset Performance and Infrastructure Longevity
One of the most prominent themes in the report is the role of digital innovation in enhancing asset reliability and longevity. Utilities are leveraging advanced analytics and high-frequency data streams to identify early signs of equipment degradation. By detecting anomalies ahead of time, utilities can address potential failures with smaller, more cost-effective interventions instead of large-scale replacements following a breakdown. This data-driven approach has improved restoration times following storms or system disruptions, strengthened adherence to service-level agreements, and enabled more informed decision-making when prioritizing maintenance investments. These improvements not only benefit operational teams but also enhance customer satisfaction and regulatory compliance, as utilities can demonstrate more transparent, data-backed plans for maintaining reliable service.
Grid-Edge Intelligence Rises as a Strategic Priority
As the number of distributed energy resources increases, grid-edge intelligence is becoming critical for utilities aiming to support bidirectional power flows while minimizing the need for costly infrastructure upgrades. The ISG report highlights how utilities are accelerating their deployment of distributed energy resource management systems (DERMS), advanced distribution management platforms, virtual power plants, and related grid-edge tools. These technologies help balance fluctuating energy supply from renewables, optimize power distribution during high-demand periods, and support rooftop solar, battery storage, and flexible demand programs. By leveraging DERMS and similar digital platforms, utilities can increase network capacity and resilience using existing infrastructure—a significant advantage as the costs and timelines associated with grid expansion continue to rise. The result is a more agile grid capable of supporting clean energy goals without sacrificing performance or reliability.
Customer Engagement Modernization Gains Momentum Across the Region
As customer expectations evolve, utilities are strengthening their digital engagement strategies. The ISG report notes that modernization efforts increasingly target the customer experience, with utilities making substantial upgrades to customer information systems (CIS) and digital self-service tools. These enhancements support time-based rates, flexible billing options, personalized energy usage insights, and more responsive communication during outages or extreme weather conditions. AI-enabled contact centers, including conversational chatbots, automated quality management systems, and intelligent routing tools, are improving first-contact resolution rates and reducing support costs. During periods of billing disputes, service interruptions, or high-stress events, AI-enhanced customer support capabilities allow utilities to deliver more empathetic and efficient interactions. These improvements are vital for maintaining customer trust as the industry evolves and new rate structures, technologies, and service models become more prevalent.
Aligning Asset, Grid, and Customer Modernization Around Unified Data Platforms
The report emphasizes that utilities that integrate their modernization efforts—linking asset management, grid operations, and customer service through shared data platforms—achieve faster, more meaningful improvements across the organization. Swadhin Pradhan, principal analyst at ISG Provider Lens Research and lead author of the report, explains that unified data strategies give utilities a holistic view of operational conditions, enabling smoother coordination between grid planners, field technicians, customer service departments, and regulatory teams. This collaborative approach helps utilities balance reliability, affordability, and customer satisfaction while accelerating digital adoption. By avoiding siloed modernization efforts, companies also reduce operational redundancies and ensure that data insights can be fully utilized by all business units.
Increased Investment in Cybersecurity and Regulatory Compliance
The report also highlights escalating investment in cybersecurity technologies and compliance solutions. As utilities digitize their grid operations and customer platforms, the exposure to cyber risk increases significantly. The integration of distributed energy resources, IoT-connected devices, and cloud-based management platforms expands the attack surface and demands more sophisticated protection strategies. Utilities are strengthening their defenses through continuous monitoring tools, AI-enabled threat detection systems, and automated compliance reporting. These investments help companies remain aligned with evolving regulatory mandates, particularly those governing critical infrastructure protection, data privacy, and electric reliability standards. Cybersecurity readiness is becoming a decisive factor in determining the pace and success of modernization efforts, making it a top priority for leadership teams across the sector.
Digital Twins and IoT Data Transform Long-Term Infrastructure Planning
Another area of rapid growth highlighted in the ISG report is the adoption of digital twins and IoT-enabled data ecosystems. Digital twins—virtual representations of physical grid assets and operational systems—allow utilities to simulate future conditions, evaluate the effects of extreme weather events, analyze grid modernization scenarios, and test infrastructure deployment plans before implementing them in the field. IoT sensors, meanwhile, provide real-time visibility into asset performance and grid behavior, enabling data-driven decisions that enhance reliability and reduce maintenance expenditures. These technologies are becoming indispensable for long-term planning as investment needs continue to grow while regulatory and financial constraints remain tight. Utilities that deploy digital twins and IoT solutions gain the ability to model risks, improve planning accuracy, and optimize capital allocation more effectively than traditional methods allow.
ISG Evaluates 35 Major Providers Across Key Operational Quadrants
The 2025 ISG Provider Lens® Power and Utilities Industry — Services and Solutions report outlines the performance of 35 leading technology providers operating in the North American utilities sector. These providers were evaluated across four key quadrants: Enterprise Asset Management, Process and Customer Experience Management, Smart Metering and Grid Modernization, and Technology, Transformation and Consulting. The report designates Accenture, Capgemini, Cognizant, Deloitte, HCLTech, IBM, Infosys, TCS, and Wipro as Leaders across all four quadrants, recognizing their extensive capabilities, strong market presence, and consistent delivery of end-to-end modernization services. Hitachi Digital Services and PwC were named Leaders in three quadrants each, while Tech Mahindra achieved Leader status in two quadrants. CGI, Concentrix, Cyient, EY, and LTIMindtree were recognized as Leaders in one quadrant each. These rankings highlight the breadth of expertise available to utilities as they pursue digital transformation projects, modernize customer engagement, and enhance grid intelligence.
Rising Stars and Customer Experience Distinctions
In addition to naming market Leaders, the report identifies several providers as Rising Stars—a designation given to companies with strong emerging capabilities and high future potential. Kyndryl, Sutherland, and Tech Mahindra were each named Rising Stars in one quadrant, indicating notable momentum in their service offerings. The report also highlights exceptional performance in the area of customer experience. Capgemini was named the global ISG CX Star Performer for 2025 among power and utilities service providers, earning the highest customer satisfaction ratings in ISG’s Voice of the Customer survey. This recognition, part of the ISG Star of Excellence™ program, underscores Capgemini’s leadership in delivering impactful, customer-centered digital solutions.
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