Back-Office Dilemmas: How Will You Bill Bundled Services?

Back-Office Dilemmas: How Will You Bill Bundled Services?

By J. Patrick Herold, FTT

At a conference recently sponsored by my company, utility executives from around the country met with their counterparts in telecommunications and Internet companies to discuss the joint business opportunities created by the convergence of these industries. Many executives left the conference with a mixture of excitement and anxiety–excitement because the range of value-added services utility companies will soon be marketing is limitless; anxiety because of the realization that for utility companies to sell these new services, they will have to grow quickly beyond the image of just being a power supplier.

Utility companies must move from the traditional image of a power supplier to that of a high-technology company that can deliver multiple products and services, along with customer service, data processing, invoicing and collection–the utility company`s back office. While efficient customer service traditionally has been important, the back office is an area that needs to receive a lot of priority and attention in the deregulated world.

Recently, some utility companies have begun upgrading their own billing systems with the help of some consulting services. The upgrades can total hundreds of thousands of dollars and generally take more than a year to fully implement. In addition, these upgraded billing systems have the potential for becoming obsolete in a short period of time as the company grows in this rapidly changing environment. Today, outsourcing back-office functions is a simple, seamless solution that provides the cost, speed and customer service aspects utility companies need to enter into these new markets.

Outsourcing back-office functions offers several advantages for increasing the bottom line. In comparison to integrated billing systems, outsourcing is a variable cost per invoice rather than a fixed cost. As the utility company grows with new customers and services, the billing company simply upgrades some software. The billing provider`s system is designed to be flexible and scalable; thus there is no capital expenditure each time the utility company`s needs outgrow the old system. This saves the utility company`s capital for marketing new services.

Unlike integrated billing systems that require a year or more for implementation, billing providers already have a system in place that is designed to handle an infinite number of variable inputs. Therefore, a full-service billing provider can design and bring a new service to market in less than 60 days.

According to industry analysts, one of the areas that utility companies need to focus more attention and resources on is customer service. Billing providers serve as a clearinghouse for customer data. Financial reporting systems provide real-time access to account information that tracks and analyzes product promotions, customer preferences, geographic sales and virtually any combination of transactional data.

The customer service center also can be effectively outsourced, with the billing provider assisting customers via 800 phone lines branded with the utility company`s name. Customers can call around the clock with billing questions and are assisted by professionals who follow the utility company`s policies in resolving billing questions and disputes.

Assigning the billing task to experts with a proven track record of getting the job done ultimately frees capital and resources for the purpose of maintaining a competitive edge in the marketplace. Most utility companies are extremely knowledgeable about their products and services and how to manage them, but executing back-office functions is becoming increasingly difficult as the product mix is diversified. Outsourcing is an economical and efficient way of enhancing the bottom line.

Author Bio

J. Patrick Herold is CEO of FTT, a turnkey billing provider whose services enable utility companies to better manage their back-office functions and expand the range of products and services offered to the consumer. Questions or comments may be directed to 945 East Paces Ferry Road, Ste. 1776, Atlanta, GA 30326; phone 800-933-0077; or e-mail

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