If your utility is like most, you’re getting no more than a dozen meter readings per year for the bulk of your customers. Advanced metering will change that. Some wonder if it will change customer information systems, as well.
Through advanced metering, consumption data flows into the utility over some sort of communication network, which means the utility can read meters as often as it wants to. Some utilities gather hourly reads. Others bring back data that’s been captured in 15-minute increments.
Getting meter reads every 15 minutes pushes the average utility’s customer-consumption data from 12 records per year to more than 35,000. Can your customer information system handle such volume? Probably not.
“Most utilities with CIS built around a monthly read and bill cycle will quickly realize they need something else to handle interval data,” said Kelly James, a spokeswoman for First Data Utilities, a billing software and outsourcing services provider. She explains that interval data requires some added application to simplify readings down to a summary usage that the existing CIS can manage.
That’s where meter data management (MDM) systems come in. Originally created as data repositories, these systems validate meter readings and make those data accessible to various utility departments. The data come in handy for tasks like transformer sizing, distribution system planning, outage restoration and revenue protection.
“The current CIS can’t do what utilities need it to do,” says Linda Jackman, a vice president at Oracle, the world’s biggest enterprise software company. Late in 2006, Oracle wedged a foot in the utility market’s door by purchasing SPL, a seller of customer care and billing software. Months later, Oracle bought Lodestar, an MDM creator. Then, tongues started to wag.
“I think what we’re seeing in the marketplace is that MDM systems are going to be a subset of a larger suite of offerings,” says Eric Murray, senior vice president of business operations for Tantalus Systems, an advanced metering company.
He could be right. According to Oracle’s Jackman, C-level executives “want to deal with one company — a one-stop shop, with all the software pre-integrated and on the same platforms.”
Chris Kardos is director of product strategy at WACS, an MDM developer. He says smaller utilities may be particularly interested in packages that cut complexity and expense. “There could be decided attractiveness to having a bundled offering, working with one vendor, having one set of licensing and hardware,” he notes.
Both Jackman and Kardos point out that there might be lower cost of ownership that way, too. “Utilities would see a better return on investment if all the stuff is bundled together and the price isn’t ‘A’ plus ‘B’ but some fraction of ‘A’ plus ‘B,'” Kardos says.
Taking a stand
Despite the benefits of bundling software, Jackman maintains MDM systems should remain stand-alone units. Interval meter data and “the connectivity to the meter open up a whole new realm for the utility, and you don’t want to bog that down in a CIS,” she explains.
Richard Charles, Alliance Data’s senior vice president of client development, agrees. “If you tied up the data in the CIS, you’re emasculating those data by not making them available to the operating groups,” he says. “A CIS should be focused on provisioning customer care and managing the revenue side of the business,” he continues, adding that a CIS can do that job by dipping into the MDM data repository, just like any other utility system.
Along with CIS losing its iron grip on consumption data, there could be other changes ahead for utility systems.
Up until now, most MDM providers have been smaller, independent companies. But, Oracle and SAP, another software giant, could become the MDM powerhouses, Charles says. They can “spend millions of dollars perfecting and advancing their product,” he maintains.
WACS might be in a good development position, too. That firm just received a huge infusion of cash from Bayard Group, an investment goliath that owns multiple AMI companies.
Another possible change: Utilities operating in deregulated markets might need to see traditional CIS functions “disaggregated,” according to WACS’ Chris Kardos. “In deregulated markets, you have separation between the meter data provider, the local distribution companies and the retailers,” he says. Yesterday’s “monolithic CIS systems did everything — keeping track of the meters and inventory, handling all the rates and billing, providing service-order functionality,” he adds. Separation of utility functions into different businesses could drive software to become more targeted.
In the end, advanced metering could be a business boon for CIS vendors. As Charles says, “Here’s another chance for people to spend money in the IT systems area. We’ve seen a pickup of RFPs related to CIS replacement.”