Roxane Richter, Customer Systems Editor
Like everything else in energy, Customer Information Systems (CIS) seem to be splintering into factions, or disaggregating, if you will.
About three years ago, everyone in the CIS vendor sphere seemed to be touting an “end-to-end” solution for energy companies. But now, driven by deregulation, software providers in customer systems are “componentizing” the parts and pieces that make up a CIS solution. With the puzzle of CIS systems now broken apart, energy concerns can now pick and choose the pieces they need. In other words, retailers (who don’t need meter reading), or an energy company that chooses to outsource a service, can purchase exactly what they need-billing, pricing of rates, load pattern analysis, meter services, databases-and nothing else.
“Component-based CIS basically means the ability to use a part of the system independent of the other parts. So you can use a rating engine without meter management or field orders, and so on,” explained SPL WorldGroup Chief Software Architect Brian Owenson, “A CIS system, like SPL’s CIS Plus Generation 3, can be broken apart into the customer care and service, billing and accounts receivable, meter management and reading, and work flow, messaging and notification. The notification part is an especially critical piece in the deregulated industry now that UDCs and retailers need to exchange information electronically.”
The need to stay “fast on your feet” in the energy business today remains mission-critical in order to keep pace with the pack of deregulated competitors. “In the deregulated market, companies realized that they had to change business processes with big swings. One minute you’re Entergy in four states, and the next minute you’re acquired by Florida Power & Light and you’re in four more states. So companies need to be more flexible today,” said Pete Sarsany, Ernst & Young utilities group senior manager, “Instead of buying an ‘all-singing, all-dancing’ CIS system, this new ‘best-of-breed’ approach allows companies to become a Jack Be Nimble to market.”
One slice in the big retail pie
So let’s look at what you need to get to the retail market, and the role that CISs play in that venture. Looking at the big picture, most end-to-end retail energy systems can be divided into a few “major” components: the utility interface (manages the ESP-Utility relationship and shares information between the retail energy market players); a billing and collections system; a customer relationship management (CRM) system which tracks the needs and wants of end-users and can link with the Sales Force Automation system to a field sales, contract administration functions, contact management functions; and a transaction management system (energy supply and purchase, tracking transaction flow, pooling, scheduling, load management, imbalance control, etc.). In that high-tech mix, the CIS system works to maintain the customer relationship in the support of the call center for billing/accounts receivable inquiries, customer service, trouble reporting, customer bill information, load pattern analysis and profiles, customer preferences and comments and new leads or sources of revenues for the marketer. But keep in mind that the retail CIS system is really a collection of applications or modules, and is based upon numerous factors, such an ESP’s business processes, strategic goals, and state and federal regulations.
“The CIS needs of a UDC versus an ESP are very different,” said Orcom Solutions Executive Vice President Mark Crapeau, “Whereas a UDC has to deal with converting data, cleaning its existing data and replacing its legacy with EDI- or XML-enabled systems, an ESP usually has no existing system. An ESP usually needs a system fast, with lots of back-end analysis that can address customer relationship issues like churn, most profitable customers, credit and collections, state regulations and win-back programs.”
And when you’re thinking CIS systems, think big money. According to G2R Research, utilities in the U.S. will spend 29 percent of their IT budgets-estimated by the Department of Energy at $300 billion this year; $350 billion by 2003-on customer service solutions (typically classified as Customer Information Systems and Call Centers.) Industry experts state that average CIS “industrial-strength” systems (five million lines of code) run anywhere from $20 million to $40 million.
Staying flexed & flexible: object-oriented design
One way of staying robust (flexed), yet reg-compliant (flexible) is to build an hyper-adaptable platform on which you build your component-based CIS system. Data modeling and architecture from the 1980s that is stretched and pulled to fit current high-tech modeling will bend, and even break, under the stress of high scalability and ongoing modifications.
“Today, a component-based CIS system is a far, far better way to go. And a system that uses object-oriented design knows how to interface with other components,” said Cary Bullock, CEO of Excelergy, “For example, take an address. When the zip code changes to an additional four numbers, which is used in many different places, it takes months to change in a legacy system, but only days or weeks with an object-oriented designed system.” Bullock added that systems using these up-to-date technologies have tremendous advantages in speed-to-market, maintainability, and offer a lower cost to customers due to the fact that their defined interfaces are cheaper to maintain.
But “fixing” or tacking on high-tech appendages to systems based on older methods of data modeling won’t cut it in the New Age of retail markets, said Brian Seidmna, Excelergy’s ABP 3000 product manager: “While their band-aids may be flexible today, they won’t meet the challenges of tomorrow. When you mess with the architecture of a system too heavily, you can end up wrecking the system, bumping up processing times and having lots of problems.”
While object-oriented design seems to address the ever changing environ of deregulation, technological platforms still must remain robust, due to the pervasive culture of mergers, consolidations and acquisitions in energy today. First and foremost, Seidman explained, consolidation is going to create much larger companies. In the future, telecom and banking and other industries could converge with energy, pushing the scope of a system from 2 million to 5-10 million. Now the question is not so much flexibility, but scalability, he said. “You’ll need several things to approach the future,” he explained, “XML to get into e-commerce, object-oriented technology and up-to-date data modeling. They’re a prerequisite now, otherwise you’re going into war wearing shackles.”
Now that you’ve separated: speaking with the ex
So now that you’ve bought the parts and pieces, using the “best-of-breed” approach, how do you go about getting the oddball collection of systems to seamlessly interface and integrate?
“The current trend in componentizing CIS is really applying what you do well and integrating with what others do well. That being said, that’s hard,” Orcom Solutions President and COO Drew Child acknowledged, “There’s a lot of work and technological expertise involved. The core competency of a utility is not constructing CIS systems. It’s strategic, but not a core competency. So we remove the clients from the heavy lifting of getting things to talk to each other. It’s like when company A upgrades, the components of E through M are affected. We keep the technology current and don’t expose our clients to all of that work.”
There are, in fact, several choices available in integration services today. More and more, application service providers (ASPs) and middleware companies are sprouting up and offering the glue to paste CIS applications together. Companies like Tibco, Web Methods and numerous others offer services in “middleware” software integration between differing vendor applications.
So whether you decide to “mix and match” you CIS components or go for the all-you-can-eat approach of an ASP, be sure you’ve shopped for a flexed, but very flexible, CIS solution for today’s mercurial energy markets.