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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

have similar functional requirements (e.g., revenue, customer, and order management), significant differences in business drivers, technical infrastructures, and product implementation models-combined with complex governance in the mid-tier and public power markets-will force vendors to reassess their current go-to-market strategies.

In addition to extending preconfigured products to address specific CRM public-power market needs and multiservice billing requirements, vendors must focus on lowering total cost of ownership by providing delivery/implementation templates, hiding architectural complexity, and simplifying product maintenance support and operation requirements. An increased number of vendors in mid-tier markets will exert additional pressure on incumbent vendors, forcing consolidation and raising vendor viability concerns.

Componentization: To alleviate customers' buying reluctance and make their solutions more affordable, vendors continue to tout CIS product componentization, which can enable phased implementation or offer an ability to extend the lifetime of legacy systems by addressing main deficiencies (e.g., complex billing, credit collection, call center productivity). Marketed by vendors as the new modular approach, componentization is achieved by partially configuring and packaging a portion of the existing product, rather than re-architecting/modularizing products by breaking them into pieces that can collaborate in a composite application environment using service-oriented architecture.

When considering current offerings, users need to be aware of the shortcomings of pseudo-componentized solutions, such as complex integration issues, the difficulty of disabling legacy products' functionality, and increased product life-cycle costs.

Outsourcing: High costs and complex IT infrastructure continue to make customer care and billing frequent outsourcing candidates by energy companies focused on operational excellence. Despite the existence of numerous external service providers, low product maturity and tenuous financial models continue to be key reasons for low acceptance of externally sourced CIS solutions. Alliance Data Systems, the largest outsourcing provider in the customer care and billing space in energy, has reached leadership status via acquisitions rather than organic growth, and subsequently has numerous CIS platforms (e.g., Indus Banner, Excelergy, ConsumerLinx, Peace, Soluziona).

The new business transformation outsourcing (BTO) model touted by major IT service providers (e.g., Accenture, IBM BSC) introduces a new value proposition by taking a holistic view of the entire business process, including process improvement. However, its complexity, high risk, and long-term proposition make BTO applicable only to relatively mature energy organizations, making companies that most need it the least viable candidates. Wipro is a leading outsourcing and offshore development vendor that has infused its energy domain expertise by acquiring the AMS energy practice. Wipro offers a wide spectrum of outsourcing options for customer care and billing, ranging from operation of the sunset product to full BTO.

Process integration: To achieve operational efficacy after harvesting the low-hanging fruit of cost reduction in customer care and billing, CIS products will need to integrate the complex business processes that cross the borders of several enterprise applications (, CRM, ERP, EAM). Depending on the market, vendors are focusing on business process integration that requires incorporation of the functions within the enterprise CRM systems (, Excelergy/Siebel CustomerPoint) and commodity management environments. In a regulated segment, to support the needs of energy companies that manage both customers and distribution assets, the focus is