A monthly billing cycle results in exposures of up to 60 days’ settlement. Participant default is likely, and the potential loss from such an event is significant. Spot-market clearing can solve...
CIS: The new Profit Machine
on integration with EAM (, Indus). To support energy companies' quests for operational excellence, CIS products will need to go beyond current integration strategies (, user exits, API, enterprise application integration) and create an integration infrastructure that will support composite application environments capable of integrating business processes by using a combination of native and external functions invoked as Web services (, SAP NetWeaver, Siebel Universal Application Network).
CIS Trends: A Snapshot
According to Harry Debes, CEO of SPL, the need for CIS systems is driven by:
- Need for cost efficiencies in all markets (this is the main driver in the United States)
- Regulatory compliance in all markets
- Competitive market requirements-the ability to differentiate from competitors with products and services (e.g., ability to offer product and services tailored to the individual business in the C&I market; the ability to make attractive offers to retail customers and service them efficiently)
Companies are looking for these types of solutions:
- True product - a commitment to development processes, commitment to upgrade, commitment to support, commitment to staying with current tech trends
- Low cost over a 5-10 year period
- Fast implementation (often 3 months)
- Low risk
- Ability to maximize existing investments, hence frequent requirement for "fixes" (or component solutions)
Changes compared with two years ago include:
- Increased focus on cost efficiencies rather than innovation, particularly in the United States, where deregulation has mostly come to a halt
- More practical approaches to system requirements
- A requirement for cheaper, faster project
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Scaling down: With North American Tier 1 markets virtually at a standstill, vendors (of both products and solutions) are starting to scale down and pursue municipal and non-energy utility opportunities. Although both markets 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