ASP Model Delivers Advantages to Utilities

By David Fiacco, Derivion

For utilities caught in the deregulation frenzy, the addition of new technologies creates opportunities to stand out amidst the competition. In this first year of the 21st century, customer relationship management, retention and the swift adoption of e-commerce solutions are all major issues affecting the utility industry. Although new applications continue to streamline business processes, many are costly and risk-intensive. Utility companies are eager for new technology-such as e-billing-that propose minimal risk and maximum benefits.

Utilities seeking to differentiate themselves in a highly competitive marketplace are selecting e-billing solutions that reduce billing costs, deliver superior customer service, accelerate the payment process and increase revenues. Most importantly, e-billing services that increase customer satisfaction by providing convenience and simplicity offer utilities high value as customer demand for online services continues to increase. According to a recent study by the Yankee Group, a global research and consulting firm, 48 percent of consumers surveyed would prefer to receive their utility bills online.

“For billers, e-billing can create or reinforce a sense of electronic bonding, brand recognition, and customer loyalty,” says Paul Hughes, senior analyst for the Yankee Group.

E-billing is a winning business initiative-offering consumers the convenience of paying e-bills from anywhere, anytime, while billers enjoy the cost-savings (as much as 75 percent) of eliminating traditional bill printing and postage fees.

Billers have a variety of options for selecting and implementing e-billing solutions: consolidators, software providers, service bureaus, aggregators, and an Internet-pure approach that has recently emerged, the application service provider (ASP).

E-billing solutions via the ASP model work in tandem with existing systems, require minimal upfront investment, and provide the benefits of new technology, without the burdens normally associated with in-house development or installment.

An e-billing ASP enables customers to access applications that are hosted and maintained by the ASP. This approach builds on traditional outsourcing advantages by providing an affordable means to resolve key issues such as security, scalability, and speed to market. Overall costs are estimated at only a fraction of the budget needed for in-house solutions because multiple businesses utilize the same “super-app” for e-billing, while fees are transaction-based. Because the ASP handles all implementation, management, and maintenance of the application, billers can focus on their core business.

Derivion is an ASP providing end-to-end B2C and B2B e-billing solutions designed for the Internet. Offering a complete e-billing implementation with predictable costs, Derivion’s e-billing solution is non-intrusive and includes electronic bill design, email notification, bill presentment, payment processing, activation marketing, and customer care. These features enable billers to make Internet bill delivery and payment simple and convenient for their customers. Derivion allows billers to administer the complete e-billing appli-cation, retain payment-processing relationships, and offer multiple access and payment options to customers.

Selecting Derivion as the enabler, TECO Corp. recently announced an initiative to offer e-billing to more than 500,000 energy customers through its principal subsidiary, Tampa Electric Co. TECO saw the ASP model as a competitive weapon that supports its e-commerce strategy.

“As our industry continues to evolve, we remain more committed than ever to e-commerce innovations, such as e-billing, that allow us to improve customer convenience,” said Penni Allison, director of corporate customer services, Tampa Electric.

Derivion’s application allows Tampa Electric to install the e-billing service at low cost, without disrupting the utility’s current business processes. Tampa Electric’s billing data stream is used to create monthly, electronic versions of customer bills. Because the service is biller-controlled via the Internet, Tampa Electric and its customers have flexible options for e-bill delivery, view, and payment.

According to industry estimates, by the year 2005, more than 40 percent of recurring bills will be delivered electronically. Therefore, it is essential for businesses, especially utility companies, to select an e-billing solution that matches their needs and offers a feasible path to adoption. As e-billing adoption continues to gain momentum, utilities recognize the power of selecting the right e-billing solution-one that offers convenience, flexibility and speed.

David Fiacco is president & chief operating officer for Derivion. For more information call 404-541-6000 or visit

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