Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

Technology Corridor

For most energy firms, the returns on investments in customer relationship management have been profoundly disappointing.
Fortnightly Magazine - November 15 2003

failures. Where CIS systems have failed, the failures have been due to the difficulties and costs inherent in adapting outdated designs to new market conditions. CRM systems, by contrast, have failed because these horizontal solutions seldom fit industry-specific needs and almost always promise unrealistic results. They have failed, moreover, because energy firms have failed to define and implement the customer relationship strategies these systems presume to manage.

Obviously, the first requirement for customer management is that supporting technology be highly adaptable in every regard. There currently is no set of predictable conditions in any domestic energy market that is likely to endure over the next 10 to 20 years, and consequently no one set of business processes that will adequately satisfy all the conditions that will emerge. No data model we can design today can possibly include all the information about customers that energy firms will be collecting in 2010, much less in 2020. So any data model we do adopt must be indefinitely extensible. That is, it must readily accommodate new customer data and make that data immediately available for use in decision-making.

Second, changing market conditions can affect customer management processes in totally unanticipated ways. Energy firms may soon find their metering and billing practices subject to increasingly stringent regulator scrutiny and even regulatory whim. This upsurge of corporate accounting regulation represents a novel pressure on customer management applications, one that no one anticipated five years ago.

We must design customer management architectures with numerous ports for plug-in components. The use of plug-ins that operate independent of core processing operations will allow a firm to change rate-calculating algorithms or other dynamic inputs without needing to reprogram an entire application. The advantage is not simply one of cost, but of speed and responsiveness. In the future, energy firms will have to respond to changes mandated by regulators or markets in days or even hours, not in months and years.

Third, effective customer management solutions will by definition be vertical solutions, built around the specific needs of energy firms, rather than the generalized functions that these firms share with food retailers or auto manufacturers. Clearly, some energy firms may choose to differentiate their infrastructures to support two entirely different forms of customer management for two very different market segments within the industry: residential and commercial customers.

Finally, effective customer management solutions must ensure that accountability for defining and managing the customer relationship continues to rest where it will always belong, with the energy firm itself. Firms in many industries have allowed their shiny new CRM software to dictate the terms and dimensions of these relationships. The results have been uniformly unsatisfactory.

Customer management may be technology-enabled, but it can never be technology-driven. No matter how far and fast your markets are evolving, the essential principle of successful customer management will always remain the same. Let your customers tell you how they want to relate to you, and how you can best manage their interactions. If you're not yet sure what type of relationships your customers really want, now is a very good