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CIS: The new Profit Machine

How IT can allow utilities to invest in customers-and even improve returns-without breaking the bank.
Fortnightly Magazine - May 2004

ability to gather information from disparate systems. "If you call in with a complaint, now in the modern CIS systems they can bring the service modules, outage information, and talk to the customer and say, 'I know you are out and we anticipate it will be another two hours,' instead of saying, 'We have no idea when the lights will come back on.'"

Craven also points to a revenue-efficiency component. He says that time-to-cash is very critical and has a number of factors: satisfaction that the bill is accurate and timely, and how the customer is looked at by the utility-the credit management issue. This is a "sore spot" for the utilities, he says.

Charles Goodman, vice president of strategic business development at Indus Utility Services, explains that CIS replacement by itself focuses on technology improvements, call center efficiencies, or improved customer service. He calls for spending on flexible technology and open architecture to allow utilities to run the business the way they need to, using one call center versus many, and centralized versus decentralized customer service. He predicts a return on investment within five years.

Goodman touts optimization of the service delivery supply chain, which is where companies can achieve attractive ROI. He also calls for integration of asset management, plus CIS and workforce management to enable business optimization. He projects one- to two-year returns on investment with a holistic service delivery management (SDM) model. But he cautions that the rate of ROI may be affected by the commitment of the organization to update its manner of operating and to capitalize on the opportunities made available, rather than merely to implement a new system to do the same functions.

Your Competitors: Who's Spending?

Exactly what market segments are spending on CIS? At the moment, it is the water utilities, municipal utilities, and cooperatives, while investor-owned utilities have been biding their time. According to Stefan Wolf, manager of field services at SAP, deregulation in the IOU market a couple of years ago drove some of the CIS investment, but that was really not a significant driver for the water market. Water utilities did not have a need at that time, but now their systems are aging, which explains their current investment. Johnston agrees that water utilities are motivated by the need to catch up. "I think the water segment hasn't spent money for so long that their systems were antiquated, and they were missing out on a lot of the basics-some of the current applications we take for granted," he argues. Specifically, he points to lack of the seamless interface to the meter read, AMR equipment, customer self-service, and Internet.

Johnston also notes that even the municipal and cooperative utility markets have been investing in CIS in the past 18 months.

Jerrier finds that demand for CIS is also coming from regulated markets, the municipal market, and some corollary markets like sub-metering.

Wolf says SAP is willing to spend money to improve what utilities already have in-house. He says utilities want "to build on top of the solution that they have, not