Regulatory “go ahead” for cloud capitalization could transform utility CIS

By Will Adams, Senior Industry Analyst –

For me, a major takeaway from last week’s Western Energy Institute conference – the Spring Corporate + Customer Symposium in San Diego – was the need to derive much greater customer value and insights from technology platforms. And it got me thinking about a previous blog about how utilities can best accomplish this goal.

In a previous Chartwell blog, my colleague Rebecca Harris had outlined the implications for utilities to “earn a return on cloud-based software” in part by enabling better data transparency, clarity and analytics from SaaS providers. But what kind of cloud-based SaaS could allow utilities to better serve customers and operate the modern grid?

Well, a customer information system (CIS) could be the most pragmatic start. A CIS is one of the most important and significant investments in technology a utility can make in the meter-to-cash cycle and is central to billing, payment, customer care and contact center operations. However, replacing or upgrading a CIS can be an extremely expensive and daunting project for utilities and can take anywhere from 12-24 months, a time-frame that makes it notoriously challenging to stay within budget.

In addition, one of the largest barriers to providing for a dynamic, robust and data-driven customer experience in the utility industry is the significant lack of data access, reporting and analytics, frustrating remnants of old, legacy CIS. Per Chartwell’s report, CIS/CRM Implementations in the Age of the Customer, 51% of utilities have a CIS that’s more than 10 years old and more than 60% are planning to implement a new CIS within the next five years.

Many of these issues are due to the need for physical, premise-based servers and hardware mainframes, which require costly IT resources for regular maintenance and system management. Normally, physical assets and on-site solutions have been perceived as having higher levels of network security and better data privacy as well as more-controlled access with the ability to interface with existing internal systems such as AMI, WFM, EAM and others. But some companies, especially smaller utilities and municipals with relatively limited budgets, have given more consideration to cloud-based CIS over the past few years as the need to provide a robust and dynamic customer experience has taken on a greater level of importance.

But progress remains slow for utilities as the industry has been among the slowest to adopt cloud-based SaaS offerings, but a few have taken the plunge with Union Gas being one of the early adopters. However, per VertexOne (which runs on SAP’s platform), utilities can already expense software licenses, implementation and upgrade costs or everything but hardware costs (which only account for about 3% of the five-year TCO for a new CIS). Indeed, regulatory support and NARUC’s recommendation could provide the necessary impetus to more closely evaluate the benefits of capex for cloud-based utility systems, and especially a new CIS. In addition, per West Monroe, there are a few considerations for cloud-based CIS implementations: New user policies to ensure proper data privacy both in the storage of data and the transfer of data within the cloud system and during the transition between systems. Additional security for all inter-system communications as well as user access controls to make sure data and security policies are upheld.

If you are interested in learning more about how other utilities are approaching cloud-based customer solutions and CIS implementations, join Chartwell’s Customer Experience Research Council by emailing Tim Herrick at therrick@chartwellinc.com.

This entry was posted in Blog. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>