Christina Shams, Innoprise Software, Inc.
The utility industry has long had a reputation for lagging behind other businesses in the adoption of new approaches to information technology, there are catalysts driving widespread, though cautious, investment in IT solutions, particularly in areas key to the industry’s future success, like customer information and billing systems.
Market research analyst UtiliPoint International, Inc. believes that deregulation has been both the principal catalyst and principal barrier to marketing opportunity for customer information systems (CIS). Its research also shows numerous market drivers that paint a compelling picture for CIS, notably a shift in focus toward improved asset management, an emphasis on customer service and operational efficiency/reliability, a need to reduce costs of service, the obsolescence of legacy technology and a resurgence of company growth and merger and acquisition activity.
According to Gartner, the leading provider of research and analysis on the global IT industry, additional trends that are driving opportunities include the need to comply with regulatory mandates, the need to integrate and simplify IT infrastructures to enable more cost-effective decision-making, a business management emphasis on becoming more customer-centric, a mandate for more diversified products and services as the industry consolidates, an aging workforce and the resulting need to retain their knowledge through better record-keeping and transfer of knowledge.
the drive for service improvements
Market and regulatory demands, combined with the evolution of technologies more capable of meeting these demands, have enabled a variety of Internet-driven business models built around customer-facing applications capable of connecting data, people, systems and devices much more easily and in a much more straight-forward manner than ever before possible.
Rigid client/server models are rapidly giving way to web-based applications servers standardized around Microsoft.NET and Java 2 Enterprise Edition (J2EE) development platforms and service-oriented architectures (SOA) that make it much easier to access customer information using a blended service-delivery model encompassing telephone, Internet, self-service kiosks, as well as mobile and wireless devices. SOAs leveraging J2EE or .NET, combined with web services, enable customer management processes to obtain a single, consistent view of all customer information residing anywhere in the enterprise, thus providing dramatic improvements in customer management, billing, work management, marketing and other customer-oriented business processes.
This empowers customers with immediate answers to their billing and service questions, along with the ability to pay bills online. It also creates a business environment capable of meeting the utility industry’s need to support variable rate structures and flexible billing models. Furthermore, it provides the intelligence utilities need to meet evolving regulatory demands.
Many utilities seeking to enhance their profitability are exploring different avenues for adding ancillary, value-added products and services. Key to these initiatives is the ability to fully understand customer demographics and finances as a means to identify opportunities with the highest possibility of success and then explore ways to market them most effectively. As a result, technologies revolving around data mining, customer analytics and a robust data-warehousing framework are helping forward-thinking utilities achieve a strategic advantage, particularly in areas where deregulation has opened the door to more robust competition.
improving collections with technology
Another technology trend focuses on solutions designed to expedite and facilitate the bill collection process. Research firm Chartwell Inc. stated in its 2004 credit and collections report that $1.6 billion in revenue remained uncollected from electricity and natural gas sales, with the percentage of write-offs to overall revenues estimated at more than 0.5 percent and charge-offs higher for most utilities in the past two years.
With the ability to effectively manage collections at the heart of every utility’s financial well-being, most find themselves looking for innovative ways to better manage collections and delinquent accounts by automating collection processes, adopting application intelligence, integrating applications and outsourcing collections.
Implementing business intelligence through features such as a user-defined work engines supporting the configuration and management of each utility’s unique bill collection rules is a trend gaining rapidly in popularity. Such systems improve collection processes and success rates by automatically running all processes and fees that have been defined, also enabling customer service representatives to distribute notices electronically or by mail and dispatch cut-offs.
By deploying modern advances in interactive voice response, utilities can notify customers who are late paying bills via automated calls reminding that payment is past due and enabling the customer to make an immediate payment.
Outsourcing is another strong trend when it comes to utility technology. UtiliPoint conducted a survey in 2004 of 305 North American utilities, with a goal of assessing their positions on customer care and outsourcing. Some 51 percent of the respondents indicated that they have either outsourced a customer care function or were planning to do so in the following two years. The UtiliPoint survey indicated that the three top common functions to be outsourced within the customer care arena are bill printing, credit and collections (delinquency-collecting from bad pay customers) and bill remittance.
UtiliPoint research shows that 58 percent of investor-owned utilities, 61 percent of co-operative utilities, and 43 percent percent of municipal utilities have either outsourced or are planning to outsource an aspect of the customer care function.
explosion in mobile customer care
Recent developments in wireless networks, device technology and device-based services have made mobile approaches to customer care and service order management not only feasible but desirable, enabling individuals and organizations to connect to the Internet at any time, from almost any place, via wireless devices. These include cell phones, personal digital assistants, pagers and laptops. This has enabled utilities to truly enhance the value of their enterprise IT investments by bringing vast data resources into the hands of field personnel who need it for a wide variety of applications.
Not only can field personnel now pick-up service orders right from mobile devices, but utilities leverage enterprise application integration, business process modeling and automated work flows have the added benefit of a service order solution with the intelligence to “know” which field personnel to dispatch specific work orders to based upon skill sets, geographic location and availability. Upon completion of the work, field personnel record the results on their mobile device and upload the information directly into the central CIS.
A mission-critical component of the utility IT environment, CIS has become a powerful enabler for business success in today’s evolving market. Additional trends that will help the industry meet its challenging business objectives include a new paradigm in mobile technology, a renewed emphasis on outsourcing, solutions that enable utilities to improve bill collection success rates, and new approaches to business intelligence through the integration, mining and analysis of critical customer information.
Shams is CIS product manager for Innoprise Software, Inc.