Retail choice might have reduced retail electricity prices if it allowed customers to escape stranded costs, but that didn’t happen.
Customer Care: Microsoft Moves In
Systems heavyweight broadens its industry footprint.
With utilities anticipating heavy rate increases in the near future, they can ill afford to alienate their customers. At the very least, they need to equip themselves to face an upsurge in customer queries and billing questions, as ratepayers come to grips with the new reality.
“Utilities are rethinking their customer-care strategies,” says Rob Milstead, director for the energy and utilities practice of consultancy Sapient, in a recent white paper.
They are “seeking the best, fastest path to value, balancing investment costs against potential revenue gain … for both the individual customer and the entire customer base.
According to Milstead, “utilities that think strategically about how to build loyalty and maximize investment will outpace competitors who focus only on operational efficiency.”
The big question, however, is whether to upgrade the old system, or to start fresh with a new one.
On one hand, the cost of replacing existing customer systems can be exorbitant—running between $30 million and $100 million, according to industry experts. That can discourage utilities from making wholesale changes in software or vendor applications.
“The bottom line is that there’s only a few replacements a year with the larger utilities,” notes Jon Arnold, global utilities industry director at Microsoft. “A system replacement requires a utility to justify the replacement expense, and making that business case can be very difficult.
“There’s [also] a huge amount of risk. Any hiccups, and it’s huge exposure and a problem with your customer base and the public utility commissions as well.”
Nevertheless, it can prove just as difficult to upgrade a legacy system, as Arnold readily concedes:
“A utility certainly isn’t a greenfield environment. You’ve got all this stuff—IBM, Oracle, Microsoft, SAP, People Soft—and the challenge, if you talk to any utility CIO, is integration.”
The race to provide utilities with customer-care systems has long been dominated by the big boys of customer relationship management, like SAP and Oracle/SPL. But muscling into the same space is the 300-pound gorilla, Microsoft. Its Microsoft Customer Care Framework (CCF) pushes the company further into utility customer service. The company is expected to announce its first utility CCF customers in July, after introducing CCF to the utility sector last year.
“In a nutshell,” notes Arnold, “it doesn’t replace SAP, Oracle, or homegrown CIS systems.”
Rather, as he explains further, it allows a utility to modernize the call-center environment, through new business functionality, including IVR, intelligent queuing, Web 2.0 self-serve options and notifications. Arnold stresses that CCF at the same time will “help reduce call times, help reduce training, help reduce CSR turnover, and meet new business and regulatory requirements without the expense of ripping and replacing, which is also very high-risk.
“A lot of the CCF solutions don’t replace what you’ve got. They make what you’ve got better.”
Microsoft’s CCF allows adaptability and integration that eases the flow of data, and makes life a bit easier for customer-service personnel. For example, unified agent desktop consolidates calls from billing, CRM,