The capital pressures squeezing utilities today need to be offset by stronger alignment among the four critical dimensions of capital planning: strategic, regulatory, financial, and managerial....
Rethinking Revenue Assurance
Reducing leakage to improve the bottom line.
and demand that providers execute both a Proof of Concept (PoC) and a Proof of Value (PoV) that prove technical feasibility ( i.e., relative to working with operational data, capturing and working with the actual logic that governs order-to-cash, etc.), and produce indicative results that directly inform the business case. Using a PoC/PoV approach, utilities can validate the benefits of a rigorous process analytic capability without taking on the risk that these tools and practices would not fit or produce in the order-to-cash environment ( see Figure 2 ).
The financial pressure on margins might abate, but are not likely to stop altogether. As a result, utility companies are actively engaged in a range of activities with the goals of reducing the effects of weak demand, a higher uncertainty in energy costs, increased capital costs, and stagnant rate cases. Among these efforts, a rigorous revenue-assurance capability is likely to produce the greatest immediate and long-term return, as it can produce 1 to 2 points of revenue recovery through a single, unified investment. Further, the PoC/PoV approach enables utilities to pursue the revenue opportunity using a sensible, efficient, low-risk method that is available now. More important, it provides a low-risk opportunity to reduce and possibly even reverse margin loss, while protecting current operations. It also reduces any risk associated with the business model shift that will be required with the expansion of smart metering and the implementation of the smart grid.