Market Focus: Energy/Utilities -- Empowered Consumers Are Ready to Flip the Switch

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For virtually anyone who has needed gas for their car, oil to heat their homes, or electricity to run appliances and keep the lights on, it’s painfully clear that energy costs have been skyrocketing in the United States. Instead of grinning and bearing the gaping hole in their wallets, though, customers—growing accustomed to having more control in other purchasing areas—are now trying to both figuratively and literally take power back into their own hands.

“High energy costs are forcing consumers to scrutinize and become more aware of their energy consumption,” explains Zarco Sumic, a vice president and distinguished analyst focusing on the energy-and-utilities space for industry research firm Gartner. “This is creating a phenomenon known as energy consumerization.”

Sumic says that providers in this area have had complete control over deployment technologies such as transformers, the types of high voltage lines, and installation. Now, though, customers are beginning to do with energy and utilities what they did with their information technology—getting their own. “Consumers are now installing their own energy sources such as solar power, wind turbines, fuel cells, and others,” he says.

Sumic says the industry isn’t quite ready to support consumers going it alone, either. “This changes the entire picture now,” he explains. “The actual delivery infrastructure is really not built to support the [energy consumerization] model.” He goes on to explain that as far as delivery infrastructure goes, most providers are still decades behind. “The network, grid, and information haven’t really changed significantly from the time of Thomas Edison and Nikola Tesla,” he adds.

Michael Gerrasch, director for energy and utilities at Germany-based Software AG, a global provider of business infrastructure software, says he recognizes the winds of change in the form of alternative energy. He says the more-pressing trend, though, is the consumer-level demand for more control over exercising and monitoring existing energy consumption.

“We’re seeing more progressive [developments] when we start talking about items like ‘smart metering,’ which really gets into some more proactive versus reactive types of customer interactions,” he says, specifically noting the smart meters in California that can extract detailed information on individual energy consumption and usage.

This can come in handy, especially since users are sometimes charged more depending on the time of day. For example, using a washing machine and dryer will cost individuals more at noon than it would at 7 p.m. “The whole concept is about making customers aware of what they’re using, how much, and when—and letting them proactively manage billing based on the time-of-use metric,” Gerrasch says.

So what does this mean in terms of CRM? Taking on a complete view of the customer in order to proactively meet each one’s growing needs, according to Sumic. “Traditionally, CRM was a significant area of investment because utilities needed to beef up their traditional [customer information] systems, especially in billing and customer service,” he says. “Now these systems need to take the holistic view of the customer and manage the processes [including] acquisition, retention, and time management.”

Gerrasch stresses that being proactive involves more than billing and monitoring. Beefing up mobile workforce management—efficiently dispatching utility workers to correct any service problems—is key to catering to today’s energy consumer. “Essentially the customer wants the power on 24/7,” he says. Some utilities, Gerrasch says, are doing more with portals that help deliver on service-level agreements while serving as an application framework to create a seamless experience.

“In the old days, you had a guy in a truck and he might have a laptop and have to log on to five or six different applications to figure out where the customer is, [the] geography, service order, directions, and priority,” he recalls. “So [our company] is doing a great deal in integrating those applications so field service representatives on the road only have to log on to one screen that has access to all the information necessary. This way, you’re saving time and optimizing the experience for both the worker and customer.”

Customers are not getting any less demanding, in this market or elsewhere, and Sumic says we can expect energy companies to have to work to keep up with expectations. “Utilities will continue to look at ways to optimize their performance and reduce cost,” he says.

SIDEBAR: Top 2 Vendors in Energy/Utilities                  Source: Gartner

  • SAP
  • Oracle Utilities

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