Regulatory and market forces put the pressure on information technology to perform.
Technology isn't in the driver's seat at some energy companies, but it...
IT Security: Who's Investing In What?
and to be able to get that information into the hands of people who need to do something about it."
Floyd does not see the demand for real-time information diminishing. "The good and the bad of energy industry restructuring is that customers have become more aware that energy is a solvable problem," she says.
Klein also perceives deregulation as a catalyst of change in the industry's attitude about technology, whether it be software or wireless. "[P]eople often talk about whether deregulation is the driving force behind many of these changes. Whether or not you believe deregulation is the driving force, there is sort of a Big Bang effect of deregulation that does capture people's attention," he posits.
Klein acknowledges the notion that real-time pricing for real-time pricing's sake has not taken hold. But, he says, "when there's a business opportunity associated with it, such as in this case where a utility can re-sell the information itself, we have seen it adopted. That's the distinction. Figuring out what the right business model is to capture that information and then resell it, that's been the challenge."
There isn't much dispute that modernizing your information technology will improve your business, Klein adds. "The fact is, despite all the bad news that has occurred in the utility industry, Wall Street has not given utilities an earning holiday," he says. Utilities are going to have to improve operations, he says. "There's simply no other way to maintain their status as good corporations in our economy. There's just no way to avoid that."
The outsourcing debate rages in the customer care arena.
In the late 1990s and into 2000, outsourcing of IT functions was hot. Experts predicted that one day soon, companies wouldn't buy software packages. Instead, they would simply sign up for a yearly service contract with some flavor of application service provider (ASP) for all kinds of computing needs. But with the dot-bombout, outsourcing, too, fell out of favor in some quarters.
Yet, there are those who believe that outsourcing's value proposition is fundamentally sound. So we asked two vendors of customer information systems and customer relations management software to weigh in on whether outsourcing is on the verge of making a comeback in the utility sector.
Steve Kim, chief technology officer at Orcom, a Philadelphia-based outsourcing company, thinks that in the next few years, more and more customer information systems (CIS) projects will be forced to happen. That's largely due to the age of many utilities' legacy systems, which makes them difficult and expensive to maintain, according to Kim. "I think you'll see CIS replacement projects becoming more and more prevalent. From that, because of the economic climate, I think you'll see outsourcing catch on more and more as well."
Kim argues that outsourcing, rather than small implementations, give companies more bang for the buck. "It takes the burden of implementing their systems away from them, which I think is very important with the IT budgets the way they are."
Jennifer Schenberg, Orcom's vice president of marketing and corporate communications, says that almost