-
Ralph Finos, Ph.D. Industry Analyst Eric Woods Research
Director
Executive Summary: Electric Utility Billing and Customer
Information Systems Billing and CIS Software and Services for
Regulated and Deregulated Utilities: Global Market Analysis and
Forecasts
NOTE: This document is a free excerpt of a larger report. If you
are interested in purchasing the full report, please contact Pike
Research at [email protected].
Published 3Q 2012
RESEARCH REPORT
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Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
Consult ing is not a certif ied public accounting f irm and does
not provide audit, attest, or public accounting services.
1
Section 1 EXECUTIVE SUMMARY
1.1 The Transformation in Billing and CIS
In the past, customers came second as an area of concern for
most electric utilities, after the grid infrastructure itself. Many
utilities are now undergoing a cultural revolution in the way they
handle customer relationships. This is true for large U.S.
investor-owned utilities (IOUs) looking to develop new revenue
streams, European energy retailers working in a deregulated market,
and utilities in the developing world looking to improve revenue
collection and energy auditing. As a result, utilities are taking a
new look at their requirements for billing and customer information
systems (CIS).
Distributed energy, smart meters, deregulation, social media,
analytics, and growing customer technology sophistication and
expectations are transforming the focus of traditional billing and
CIS to a more customer-centric approach throughout the entire
customer lifecycle.
In particular, the deployment of advanced metering
infrastructure (AMI) is driving a revolution in utility customer
relationship management (CRM). In addition to the tidal wave of
usage data that smart meter deployments will generate for basic
meter-to-cash processes, AMI is enabling utilities to develop new
products and services, such as demand response (DR), electric
vehicles (EVs), prepaid metering, and home energy management (HEM).
This requires utilities to master the product development,
marketing, and customer relationship skills to ensure program and
competitive success. In turn, the billing and CIS systems
underpinning these business processes will have to step up to the
challenge.
Consumers have accelerating expectations of their product and
service providers for better communication, more flexible offerings
and choices, better service, and a higher quality of consumer
experience overall. These will appear in full force in the utility
industry in the latter part of Pike Researchs forecast period
(2015-2017), especially when retail electricity becomes more
prevalent and regulated utilities accelerate their conservation
efforts with customers. Examples of what is coming next can already
be seen in the retail, telecommunications service, and banking
industries. The billing and CIS challenge will be complex, but
industry leaders are already addressing it.
Another significant change factor driving billing and CIS change
will be customer and business process analytics. This technology
will play an important role in guiding utilities in product
development and market execution for the targeted offerings and
bundles that will have to be created to ensure customer engagement.
Today, confusion exists in the market about how and where to apply
analytics to business process problems and improving business
outcomes, and, therefore, the market is at a relatively low level
of maturity.
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2012 Navigant Consult ing, Inc. All rights reserved. Navigant
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2
1.2 Is Billing and CIS IT Technology up to the Challenge?
Given the technology and market changes already here or on the
visible horizon that include smart meters, DR, renewables, EVs, as
well as market forces like deregulation that will stress billing
and CIS, the question is whether the related business processes and
information technology (IT) systems are up to the challenge. Many
legacy billing and CIS are regarded as being technically unsuited
for the emerging smart grid requirements. The technical and
workforce skill risks are high and the investments required to meet
the emerging standards of performance will be considerable.
Interoperability is a high priority and the span of systems
involved, from AMI to meter-to-cash and from marketing and sales to
product development and customer service, will make this a
challenge. This sort of IT transformation is not unique to
utilities banking, insurance, transportation, and telecom are
experiencing similar IT challenges. However, the challenge to
utilities is the most daunting faced by any industry today.
1.3 What Are the Options for Utilities?
Utilities recognize that current legacy billing and CIS are
untenable for the long-term and they are developing replacement
strategies to avoid obsolescence. Billing and CIS replacement
strategies range from wholesale IT transformation, selection of a
managed service provider to outsource the function, alignment with
providers of integrated software suites like Oracle and SAP, and/or
more measured modular roadmaps for instituting billing and CIS
functionality to accommodate the new market realities. The latter
approach can range from aggressively upgrading key capabilities to
embracing cost avoidance by grafting on late life kickers and
extensions to legacy systems to avoid process disruption. However,
this may only delay the organizational/business operations
transformation that they will finally have to face.
Regardless of the strategy, utilities need to look at billing
and CIS transformation holistically and work with vendors who
understand the specific regulatory and government issues they face
and have an appreciation of the strategic business situation and
aspirations of the utility. Moreover, they should embrace notions
of interoperability and assume significant scale and scope
challenges to the billing and CIS architecture that they
provide.
1.4 What Should Vendors be Doing?
The billing and CIS market landscape is populated with a
diversity of suppliers. Billing and CIS software and services
market leadership is provided by Oracle, SAP, Accenture, and IBM,
but other software and services vendors (most with their own
approach and market strengths) are also important participants
including Infosys, Hansen, Convergys, PWC, SAIC, Itron, Aclara,
SAS, and others.
ERP software companies like Oracle and SAP offer integrated
software suites. Top consulting and systems integrators like
Accenture, IBM, or Infosys can provide solutions and help with
business and IT transformation. Smaller utilities may seek
utility-oriented billing and CIS utility industry specialists such
as Harris, Hansen, or Ferranti. MDM suppliers Itron and eMeter are
also providing some elements of billing and CIS centered around
meter data. Telco billing and
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3
CIS providers, such as Convergys, also have utility industry
offerings, which leverage their experience of handling complex
billing and customer service requirements.
Vendors are faced with providing complex solutions in a complex
landscape with significant diversity in their utility customers IT
maturity and skills. One size does not fit all, and the diversity
of utility types, goals, and the characteristics of their end
customer types requires customized approaches utilizing standard
components.
In many instances, vendors should expect to lead their customers
to the right path including long-term strategy planning, multi-year
technology implementation roadmaps, as well as recommending the
utility adopt business practices that align with best-in-class
software products to enable effective billing and CIS
execution.
This may take the form of standard application software from SAP
and Oracle, as well as serious attention to service-oriented
architecture (SOA) principles and methods when interfacing with
other smart grid technologies. It may also take the form of point
billing and CIS solutions that can deliver significant value, such
as bolt-ons to current legacy systems.
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Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
Consult ing is not a certif ied public accounting f irm and does
not provide audit, attest, or public accounting services.
4
1.5 Utility Billing and CIS Software and Services Market
Forecast
Many factors, including technology and regulatory facilitators
and barriers, grid deployment, and IT maturity, are playing out
across the world that relate to the growth potential for billing
and CIS. As a result, the electric utility billing and CIS software
and services market will grow from $2.3 billion in 2011 to $4.0
billion by 2017, at a CAGR of 9.5% annually, which will begin to
accelerate most noticeably in the latter part of the forecast
period.
Chart 1.1 Billing and CIS Software and Services Revenue by
Region, World Markets: 2011-2017
(Source: Pike Research)
North America is the leading region in terms of smart meter and
AMI technology maturity, which generally correlates with billing
and CIS modernization. However, the range of billing and CIS
modernization in North America is significant with areas like Texas
and some Canadian provinces focusing on their retail-related
challenges, while regulated vertical utilities like those in
California, are implementing CRM to promote demand-side measures to
increase energy conservation. Western Europe is the other leading
region with significant diversity in practice from the advanced
retail focus of the United Kingdom to the more modest efforts of
some of the large state monopolies and oligopolies on the
continent. Asia Pacific, Eastern Europe, and Latin America each
have their own opportunities, challenges, and success profiles. In
general, Pike Research expects deregulated utilities to the lead
the way with more advanced billing and CIS systems during the
decade.
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
2011 2012 2013 2014 2015 2016 2017
($ M
illio
ns)
North AmericaWestern EuropeEastern EuropeAsia Pacific excluding
ChinaChinaLatin AmericaMiddle East/Africa
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Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
Consult ing is not a certif ied public accounting f irm and does
not provide audit, attest, or public accounting services.
60
Section 8 TABLE OF CONTENTS
Section 1
...........................................................................................................................................................
1Executive Summary
..........................................................................................................................................
1
1.1 The Transformation in Billing and CIS
..................................................................................................
11.2 Is Billing and CIS IT Technology up to the Challenge?
..........................................................................
21.3 What Are the Options for Utilities?
.......................................................................................................
21.4 What Should Vendors be Doing?
.........................................................................................................
21.5 Utility Billing and CIS Software and Services Market Forecast
..............................................................
4
Section 2
...........................................................................................................................................................
5Market Issues
....................................................................................................................................................
5
2.1 Billing and CIS Overview
.....................................................................................................................
52.2 Billing & CIS Definition
........................................................................................................................
62.3 Billing and CIS Critical Success Factors
..............................................................................................
7
2.3.1 Billing Process (Meter-to-Cash)
.....................................................................................................
72.3.2 Robust Billing Platform
.................................................................................................................
82.3.3 Bill Delivery Methods
...................................................................................................................
102.3.4 Cost Efficiency
............................................................................................................................
10
2.4 CRM & CIS Definition and Trends
.......................................................................................................
112.5 Utility Market Factors Impacting Billing and CIS
..................................................................................
12
2.5.1 Deregulation and Billing and CIS
..................................................................................................
122.5.2 Conservation and Billing and CIS
.................................................................................................
132.5.3 Customer Competence and Billing and CIS
...................................................................................
132.5.4 Expectations of Better Products and Services
...............................................................................
14
2.6 Billing and CIS IT Systems Today
.......................................................................................................
14
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Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
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61
2.7 Next Steps for Utilities
.......................................................................................................................
152.7.1 IT Products/Solutions Roadmap
...................................................................................................
15
2.7.1.1 IT Transformation Projects
.......................................................................................................
162.7.1.2 Managed Services
...................................................................................................................
162.7.1.3 Suites
.....................................................................................................................................
172.7.1.4 Modular Point Upgrades
..........................................................................................................
18
2.8 Billing and CIS Market Segmentation
..................................................................................................
182.8.1 Regulated versus Deregulated Utilities
.........................................................................................
182.8.2 Large versus Small Utilities
..........................................................................................................
192.8.3 Residential Customer Types and Behavior
....................................................................................
20
2.9 Utility Billing and CIS Vendor Landscape
............................................................................................
212.9.1 Making the Right Vendor Choice
..................................................................................................
21
2.10 Regional Market Factors
....................................................................................................................
222.10.1 North America
.............................................................................................................................
222.10.2 Western Europe
...........................................................................................................................
23
2.10.2.1 United Kingdom
..................................................................................................................
232.10.2.2 Nordics
..............................................................................................................................
232.10.2.3 Germany
............................................................................................................................
24
2.10.3 Asia Pacific
.................................................................................................................................
242.10.4 Eastern Europe and the Middle East and Africa
.............................................................................
252.10.5 Latin America
..............................................................................................................................
25
Section 3
..........................................................................................................................................................
26Technology Issues
...........................................................................................................................................
26
3.1 Smart Grid Technology and Billing and CIS
.........................................................................................
263.1.1 The Impact of AMI and Related Technologies
...............................................................................
26
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62
3.1.2 Demand Response
......................................................................................................................
273.1.3 Electric Vehicles
..........................................................................................................................
273.1.4 Prepaid
.......................................................................................................................................
28
3.2 Customer Energy Management
..........................................................................................................
283.3 Smart CRM Social Networks, Self-service, and Multichannel
Technology .......................................... 28
3.3.1 Portals
........................................................................................................................................
293.3.2 Mobility
.......................................................................................................................................
293.3.3 Multi-channel
...............................................................................................................................
293.3.4 Social Media
...............................................................................................................................
30
3.4 Smart Grid Interoperability and Standards
..........................................................................................
303.5 Analytics and Big Data
.......................................................................................................................
30
3.5.1 AMI-related Analytics
...................................................................................................................
313.5.2 Customer and Business Process-Related Analytics
.......................................................................
32
3.5.2.1 Market Segmentation and Product Development
.......................................................................
323.5.2.2 Customer Retention
................................................................................................................
323.5.2.3 Business Process and Strategy Analytics
.................................................................................
333.5.2.4 Orchestration and Interaction
...................................................................................................
333.5.2.5 Market Campaign Planning and Evaluation
...............................................................................
33
Section 4
..........................................................................................................................................................
34Key Industry Players
........................................................................................................................................
34
4.1 Overview
...........................................................................................................................................
344.2 Accenture
..........................................................................................................................................
344.3 Aclara Software
.................................................................................................................................
354.4 Convergys IM
....................................................................................................................................
354.5 Hansen Technologies
........................................................................................................................
36
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Electric Utility Billing and Customer Information Systems
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Consult ing is not a certif ied public accounting f irm and does
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63
4.6 Hewlett Packard
................................................................................................................................
384.7 IBM
...................................................................................................................................................
384.8 Infosys
..............................................................................................................................................
394.9 Itron
..................................................................................................................................................
424.10 Oracle
...............................................................................................................................................
444.11 PricewaterhouseCoopers
...................................................................................................................
454.12 Science Applications International Corporation
...................................................................................
454.13 SAP
..................................................................................................................................................
464.14 SAS
..................................................................................................................................................
47
Section 5
..........................................................................................................................................................
49Market
Forecasts..............................................................................................................................................
49
5.1 Electric Utility Billing and CIS Market Definition
...................................................................................
495.2 Utility Billing and CIS Market Size and Forecast
..................................................................................
49
5.2.1 Software
.....................................................................................................................................
495.2.2 Billing and CIS Services
...............................................................................................................
515.2.3 Total Billing and CIS Software and Services
Spending...................................................................
525.2.4 Billing and CIS Software and Services Spending for
Regulated and Deregulated Electric Utilities .... 54
5.2.4.1 Regulated Electric Utility Market Drivers
...................................................................................
555.2.4.2 Deregulated Electric Utility Market Drivers
................................................................................
55
Section 6
..........................................................................................................................................................
56Company Directory
..........................................................................................................................................
56Section 7
..........................................................................................................................................................
58Acronym and Abbreviation List
.......................................................................................................................
58Section 8
..........................................................................................................................................................
60Table of Contents
.............................................................................................................................................
60
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Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
Consult ing is not a certif ied public accounting f irm and does
not provide audit, attest, or public accounting services.
64
Section 9
..........................................................................................................................................................
65Table of Charts and Figures
.............................................................................................................................
65Section 10
........................................................................................................................................................
67Scope of Study
.................................................................................................................................................
67Sources and Methodology
...............................................................................................................................
68Notes
................................................................................................................................................................
68
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Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
Consult ing is not a certif ied public accounting f irm and does
not provide audit, attest, or public accounting services.
65
Section 9 TABLE OF CHARTS AND FIGURES
Chart 1.1 Billing and CIS Software and Services Revenue by
Region, World Markets: 2011-2017 .................. 4
Chart 5.1 Billing and CIS Software Revenue by Region, World
Markets: 2011-2017 ....................................... 50
Chart 5.2 Billing and CIS Services Revenue by Region, World
Markets: 2011-2017 ....................................... 51
Chart 5.3 Billing and CIS Software and Services Revenue by
Region, World Markets: 2011-2017 .................. 52
Chart 5.4 Billing and CIS Software and Services Revenue by
Regulated and Deregulated, World Markets: 2011-2017
...................................................................................................................................
54
Figure 2.1 Typical Billing and Customer Service Functions
..............................................................................
6
Figure 2.2 Electric Utility Bill Sample
..............................................................................................................
9
Figure 2.3 Customer Relationship Management and Customer Sales
and Service Cycle .................................. 12
Figure 2.4 Customer Profiles and Energy Product and Service
Offering Adoption Factors ................................ 20
Figure 3.1 Examples of Customer Analytics Possibilities
................................................................................
32
Figure 4.1 Convergys Smart Utility Solutions
.................................................................................................
36
Figure 4.2 Hansen Technology Billing and CIS Offerings
................................................................................
37
Figure 4.3 IBM Smart Grid Enterprise Architecture
.........................................................................................
39
Figure 4.4 Infosys Utility Billing and CIS Offerings
.........................................................................................
40
Figure 4.5 Itron Enterprise Edition Platform
...................................................................................................
42
Figure 4.6 SAIC Smart Grid as a Service
...........................................................................................................
46
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2012 Navigant Consult ing, Inc. All rights reserved. Navigant
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66
Table 3.1 Complex Billing Options
...............................................................................................................
27
Table 5.1 Billing and CIS Software Revenue by Region, World
Markets: 2011-2017 ....................................... 50
Table 5.2 Billing and CIS Services Revenue by Region, World
Markets: 2011-2017 ....................................... 51
Table 5.3 Billing and CIS Software and Services Revenue by
Region, World Markets: 2011-2017 .................. 53
Table 5.4 Billing and CIS Software and Services Revenue by
Regulated and Deregulated, World Markets: 2011-2017
...................................................................................................................................
54
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Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
Consult ing is not a certif ied public accounting f irm and does
not provide audit, attest, or public accounting services.
67
Section 10 SCOPE OF STUDY
This report examines billing and CIS and related electric
utility software applications and services that are essential to
electric utility customer relationships and process success
overall. Such systems include:
Billing and M2C processes
Marketing and sales management systems
Portals and other methods of interacting with customers
The report covers the current state and readiness and forecasts
for the adoption of billing and CIS that can accommodate and
exploit smart grid technologies for the years 2011 through 2017 in
the regions of North America, Western Europe, Eastern Europe, Asia
Pacific (excluding China), China, Latin America, and the Middle
East/Africa. It segments the greater billing and CIS market into
spending in regulated versus deregulated markets. These forecasts
complement those in other Pike Research reports on specific
applications, such as the smart grid IT, MDM, smart grid data
analytics, and other market segments. Leading vendors are
highlighted, as well as the impact of smart grid regulatory,
analytics, portal, social media, and other IT technologies on the
use of billing and CIS by electric utilities.
This report does not address the technical details of the
applications and the enabling technologies discussed above. Rather,
it addresses the status of billing and CIS in use today and the
roadmaps and paths that are available to bring these systems into
alignment with smart grid capabilities and trends.
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Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
Consult ing is not a certif ied public accounting f irm and does
not provide audit, attest, or public accounting services.
68
SOURCES AND METHODOLOGY
Pike Researchs industry analysts utilize a variety of research
sources in preparing Research Reports. The key component of Pike
Researchs analysis is primary research gained from phone and
in-person interviews with industry leaders including executives,
engineers, and marketing professionals. Analysts are diligent in
ensuring that they speak with representatives from every part of
the value chain, including but not limited to technology companies,
utilities and other service providers, industry associations,
government agencies, and the investment community.
Additional analysis includes secondary research conducted by
Pike Researchs analysts and its staff of research assistants. Where
applicable, all secondary research sources are appropriately cited
within this report.
These primary and secondary research sources, combined with the
analysts industry expertise, are synthesized into the qualitative
and quantitative analysis presented in Pike Researchs reports.
Great care is taken in making sure that all analysis is
well-supported by facts, but where the facts are unknown and
assumptions must be made, analysts document their assumptions and
are prepared to explain their methodology, both within the body of
a report and in direct conversations with clients.
Pike Research, a part of the Navigant Consulting, Inc. Energy
Practice, is a market research group whose goal is to present an
objective, unbiased view of market opportunities within its
coverage areas. Pike Research is not beholden to any special
interests and is thus able to offer clear, actionable advice to
help clients succeed in the industry, unfettered by technology
hype, political agendas, or emotional factors that are inherent in
cleantech markets.
NOTES CAGR refers to compound average annual growth rate, using
the formula:
CAGR = (End Year Value Start Year Value)(1/steps) 1.
CAGRs presented in the tables are for the entire timeframe in
the title. Where data for fewer years are given, the CAGR is for
the range presented. Where relevant, CAGRs for shorter timeframes
may be given as well.
Figures are based on the best estimates available at the time of
calculation. Annual revenues, shipments, and sales are based on
end-of-year figures unless otherwise noted. All values are
expressed in year 2012 U.S. dollars unless otherwise noted.
Percentages may not add up to 100 due to rounding.
-
Electric Utility Billing and Customer Information Systems
2012 Navigant Consult ing, Inc. All rights reserved. Navigant
Consult ing is not a certif ied public accounting f irm and does
not provide audit, attest, or public accounting services.
69
Published 3Q 2012
2012 Navigant Consulting, Inc. 1320 Pearl Street, Suite 300
Boulder, CO 80302 USA Tel: +1.303.997.7609
http://www.navigant.com/pikeresearch
This publication is provided by Pike Research, a part of the
Navigant Consulting, Inc. Energy Practice (Navigant). This
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Notwithstanding the foregoing, Navigant makes no claim to any
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disclaims, any liability for any loss or damage caused by errors or
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