For energy service providers (ESPs) and utilities preparing to operate in the open access markets, maneuvering through the new rules and competitive pressures presents daunting challenges. To ensure effective penetration of open access markets, decisions must be made quickly, making speed to market, flexibility and Web-based communications with customers fundamental to the success of next-generation utilities. People, products, services and the information systems that support them all must be aligned to optimize opportunities.
The right application service provider (ASP) can ease the transition to an open access market. If utilized properly, an ASP can provide a viable alternative to procuring and implementing complex technology systems.
There are several benefits associated with using ASPs, and one of the most important is speed to market. In an industry with ever-changing, complex requirements, many energy providers, especially newly formed ESPs, do not have time to develop their own billing systems. Relying on an ASP that already has the costly equipment, technical knowledge and industry expertise enables energy providers to quickly enter new markets as they open for competition.
Using an ASP to manage complex technical systems also allows the energy company to focus on its core business-providing energy to customers-without being distracted or hindered by technology.
Reduced costs and lower overall expenditures for hardware, applications and management also can be a big benefit for energy companies that use ASPs. In an industry that spends $34 billion on billing, ASPs present a tremendous opportunity for cost cutting.
Finally, ASPs offer improved performance. There is no substitute for experience. ASPs offer proven, secure, scalable solutions to complicated technology problems.
However, not all ASPs are the same. The mark of an exceptional ASP is one that goes beyond the technology and what happens when that technology is implemented. An ASP should be a partner providing guidance and support through the ever-changing energy landscape. When choosing an ASP to provide billing solutions, an organization should look for the following elements to ensure optimal success:
Functionality: The requirements of doing business successfully in open access markets are different from those in a regulated marketplace. Successful ASPs typically understand these requirements and offer solutions designed to ensure their clients operate efficiently in those markets.
Capital and maintenance investments: The two most salient parts of the ASP equation are the savings an ASP offers clients by eliminating the need for large, up-front capital investments and the need for ongoing maintenance expenses.
Scalability and security: ASPs must have the latest in servers, databases, communications hardware and bandwidth so that scalability is never a concern. Security should be unimpeachable as well, with network and system redundancies sufficient to handle disruptions should they occur.
Flexibility: ASPs must be flexible enough to enable customers to integrate with their systems and applications and to control as much-or as little-of the applications they access as desired.
Service levels: ASPs must work to defined service levels to achieve quality of service benchmarks and milestones.
A utility billing system is much more than the sum of its parts. It’s not just about what the billing system can do, it’s what the ASP-delivered billing system enables an energy company to do that would otherwise not be possible through traditional software solutions.
Some questions that energy companies should ask include:
- Can my billing system offer me the information necessary to better understand my customers’ needs? Can that information be easily and seamlessly shared within my organization?
- How “smart” is my billing system in terms of offering guidance on consumption patterns and load profiles? Does this information flow to appropriate parts of my organization?
- Does my billing system allow me to become a knowledge partner to my customers, changing their current perceptions of the energy supply business?
- Is my billing system really a platform that enables me to market and sell a range of other products and services in addition to commodity?
Recognizing the significance and critical importance of each of these factors is imperative to successfully utilizing an ASP. Through strategic, customer-focused and Web-enabled solutions, ASPs can offer solutions that will allow next-generation utilities to succeed in the uncertain, competitive open access markets.
Dr. Robert Obeiter is executive vice president of sales and marketing at InSITE SERVICES where he directs business development activities, strategic alliance relationships and sales and marketing. He has more than 20 years experience in energy services, has published extensively on energy-related issues, and is frequently invited to speak at conferences and workshops. Prior to joining InSITE, Dr. Obeiter was a Principal with Barakat & Chamberlin, a leading economic and management consulting firm where he directed the retail energy practice.