Diana M. Bolick
As the marketplace transforms, energy companies face many new challenges in the front office. Traditionally, energy companies have had separate customer information databases, complicating interaction with customers as new products emerge, older products evolve and companies consolidate. With deregulation and rapid entry of new market players, energy companies must rethink their market strategies and, consequently, their IT infrastructures.
During the 1980s when MCI entered the telecommunications marketplace, they were quick to offer more market-driven opportunities than their primary competition that was plagued by legacy systems, diverse databases and limited customer views. Today, energy companies are experiencing the same challenges as their telecom brethren and need to exploit their information assets. The front office can facilitate this by transforming data into knowledge capable of creating competitive advantage. Transformation begins with identifying front office challenges, exploring new technologies to address challenges, and applying new technologies to empower the customer.
Front office challenges
Many corporate databases and legacy systems that were useful as point solutions must now be integrated to enable management and to fully understand the behaviors of customers and trading partners. Energy companies are no longer dealing with a single point of entry or product offering. They are dealing with many new variables that range from new product offerings to new communication channels with suppliers, customers, and vendors. Typically, legacy systems are incapable of supporting this transformation without major reconstruction. Often new systems are needed to manage these data sources. For the CSR, paging through screens of data and entering/exiting separate databases to process a customer request is inefficient.
Energy Companies need to look beyond their traditional methods of operation. They need to understand how the energy value chain-the sequence of processes that deliver energy from generation to transmission, to distribution and to the end user-and new complex relationships will impact their business. They also need a way to capture this new information to gain comprehensive views of trading partners and customers. Given this, the next question is: can existing front- and back-office technologies support these new initiatives, consolidate this knowledge, and provide a single customer view? Typically, the answer is no. Energy companies need a solution that enables easy access, updates, and views of customer relationships and provides an intuitive way to interact with customers and process the mounds of data with which they are bombarded daily-without destroying the existing data acquisition and storage systems.
Another challenge for energy companies is the sales/marketing life cycle. How do they track a lead through the sales cycle that starts out as a prospect, transforms into a lead and becomes actual revenue once it is closed? In fact, how do the other functional areas such as marketing, sales, billing and customer service interact with one another and share information consistently and accurately? Also of concern is customer retention, the flipside of costlier customer acquisition. New and improved technologies will reduce these challenges and strengthen business activities.
Customer-facing technologies-applications that communicate with or support customers such as sales, customer service and billing systems-now address many elements of the customer relationship. The CSR monitor displays more than just customer name, address and phone number. Elements of customer buying tendencies are being integrated, such as monthly energy consumption and yearly consumption trends. Enrollment information acquires more than the customer’s service account and local distribution company name. Customer billing history is now incorporated onto the screen providing the CSR with a broader perspective on the customer’s bill paying habits.
Technologies from a variety of areas are used to create a holistic customer view. Customer relationship management (CRM) technologies from campaign management to decision support to data mining help energy companies unlock the value of information in disparate systems by, among other capabilities: (1) giving companies and their representatives more complete views of customer histories and buying patterns; (2) extracting trend information that helps shape marketing and sales efforts; and, (3) tracking success metrics to enable quick adjustments in such critical areas as customer acquisition and retention. XML (extensible markup language) enables energy companies to more cost-effectively communicate with trading partners via the Internet instead of value-added networks. The Internet serves as a new communication channel where messages can be tailored to customer needs. These new technologies help facilitate the ways energy companies perform specific tasks.
One approach is to apply new technologies in an SPOC (single point of contact) strategy. In a merger, for example, with the SPOC approach data is extracted from legacy systems, processed by new applications and presented to customer service personnel in a consistent manner across the entire consolidated customer base. This approach has the advantage of relatively little change, if any, to established legacy systems while, at the same time, providing the merged companies with the customer information they need to compete successfully in their new combined market.
With the business service provider model, energy companies can preserve their existing investments without significant capital expenditures. In fact, energy companies would:
- Receive unlimited access to a portfolio of the latest business solutions online;
- Obtain a single point of contact for all system and service-level management;
- Cut their systems integration efforts and deployment time and costs by half;
- Adapt quickly to changing business requirements;
- Maintain focus on managing change and growing their business; and
- Retain control of data.
Technology and regulatory changes have opened up new communication channels between energy companies and customers. Whether it is through the Web, e-mail or direct mail, customers need to be kept abreast of upcoming new services and products. They feel empowered when they have choice. Technologies bring all of this information together so that real-time interactions become the norm, not the exception. By responding quickly and accurately to customers, energy companies will start to unleash the value of these relationships.
Today, energy customers may be “rate payers,” tomorrow they will be revenue streams. The energy marketplace is just beginning to acknowledge the customer, choice, and the strength of customer buying power. Customer retention and extension will become driving forces of energy company success. Looking beyond the customer’s current ways and determining customers’ new preferences will become the norm for energy companies and will provide energy companies with knowledge needed to compete successfully in a changing marketplace and enhance the value of their offerings.
Technology is one element of corporate strategy. Energy companies also need to rethink existing strategic plans and ask themselves if they truly have the skill sets on board to compete in this new marketplace. Because the marketplace is being driven by many variables, new skill sets in client/server technologies, trading partner management, database marketing and decision support are required if market-driven strategies are to be implemented successfully and sustained throughout the company. The front office includes applications, databases, networking and enabling technologies that tie this information together.
Energy companies have and abundance of data and are acquiring more every day. The trick is to build an infrastructure to supplement and use what they have without destroying it. Energy companies need to take advantage of new technology applications and determine how best to balance them against the business and market-driven goals of the organization. Then, companies can assume a proactive role and achieve long-term gains.
Diana Bolick is vice president of marketing for USPowerSolutions, a business service provider for the energy marketplace that integrates applications, external trading partners, and legacy systems through a common IT interface. Contact Bolick at firstname.lastname@example.org.