SUMMARY 1
Catalyst 1
Ovum view 1
Key messages 2
From poor business processes and supporting technology through to CIS migrations, billing in utilities can have a huge impact on customer satisfaction 2
AMI's inherent complexity will be the most important future driver for CIS investment 2
Utilities are likely to focus their future CIS investments on process enablement; they ignore customer satisfaction management at their peril 2
Investment in presentment technologies requires further investment in CRM 3
Current gaps in CIS technology create opportunities for new vendors 3
Recommendations for utilities 3
Recommendations for vendors 3
Table of Contents 4
MARKET CONTEXT: THE PROBLEMS UTILITIES' CUSTOMERS HAVE WITH BILLING ARE CAUSED BY A COMBINATION OF PEOPLE, PROCESSES AND TECHNOLOGY 5
The billing of both residential and C&I customers is a problem area for utilities 5
Utilities are not good at providing customer service, and this costs them money 5
Billing is the principal cause of residential customer complaints across the world 6
Estimation and clarity are the principal causes of customer complaints 8
C&I customers' causes of complaints are more complex than residential 9
Estimation is still an issue for MEUs 10
Utilities' corporate culture, business processes, staff and technology are all to blame for causing customer dissatisfaction with the billing process 11
Residential customers are let down by poor processes and badly trained staff 11
C&I customers are being failed by the inability of current CIS technology to report complex billing data 13
The replacement of utility billing systems can have a devastating impact on customer satisfaction 14
European regulation is leading the way in improving customer satisfaction with utility billing 15
BUSINESS FOCUS: CIS REPLACEMENTS ONLY HAPPEN WHEN ABSOLUTELY NEEDED; AMI WILL BE THE BIGGEST FUTURE DRIVER OF CIS UPGRADES 16
Most utilities will avoid CIS replacements if they can 16
Historic CIS upgrades were spurred by liberalization, mergers and aging technology 17
Market liberalization has been a major catalyst for CIS upgrades 17
Where residential market liberalization has occurred, so have CIS upgrades 17
Market liberalization has seen recent investments in C&I billing 18
Multiple acquisitions can make legacy CISs too unwieldy to manage 18
Ancient legacy CISs lack the functional requirements of today's utilities 19
AMI's inherent complexity will be the most important driver for CIS investment in the future 19
CRM systems will have to be adapted to cope with changed or new business processes 20
The complexity AMI introduces to billing will require radical amendments of existing billing engines 22
On its own, AMI is unlikely to improve customer satisfaction, and may make it worse 22
While smart meters remove the need for bill estimation ... 22
... utilities should not expect a fall in residential customer complaints in the short term 23
In the long term, residential complaints will shift focus to the clarity of bills 23
TECHNOLOGY FOCUS: THE IMPORTANCE OF BILLING PRESENTMENT SHOULD NOT BE OVERLOOKED WHEN MANAGING CUSTOMER SATISFACTION 24
Utilities are likely to focus their CIS investments on process enablement 24
Bill presentment technologies are essential to managing customer satisfaction 25
Current billing systems are unable to cope with current C&I contract complexity 25
AMI creates a billing landscape where issues for C&I and residential customers will be similar 26
Tackling complexity through better presentment for both C&I and residential customers will be the battleground of the future 27
The requirement for more flexible, agile and insightful presentment for C&I continues to go unfulfilled 28
Both non-AMI and AMI residential billing will benefit from more advanced bill presentment 28
Investment in presentment technologies require further investment in CRM 29
Current gaps in CIS technology create opportunities for new vendors 30
RECOMMENDATIONS 31
Recommendations for utilities 31
Remember the customer 31
Billing and CRM inaccuracies impact cost-to-serve, so minimize disputes and manage them well when they do arise 31
Different CIS strategies all come with different risks attached 31
In a true AMI world, a legacy CIS is unlikely to work; retaining at least part of a legacy CIS in an AMI deployment will impact performance elsewhere 32
Utilities, vendors and systems integrators can learn from past migrations 33
Complexity of the new processes will likely cause some utilities to be flexible over ownership 34
Recommendations for vendors 35
Size of utility is a big factor in vendor selection 35
The different structure and regulation of utility markets create different requirements 35
Market liberalization and AMI will not occur across all markets 35
The drivers for AMI deployment will impact the related CIS investments utilities have to make 36
Alternative views 36
APPENDIX 37
Ask the analyst 37
Definitions 37
Further reading 37
Methodology 37
Disclaimer 38
List of Figures
Figure 1: The quality of billing and complaints-handling processes in the contact center affects cost-to-serve 6
Figure 2: Billing is the principal cause of customer complaints around the world 7
Figure 3: Billing inaccuracies are the biggest cause of complaint among UK residential consumers in 2010 8
Figure 4: 40% of MEUs in the UK report an average or worse experience with their billing 9
Figure 5: Billing accuracy is a key requirement of major energy users in the UK 10
Figure 6: Accuracy and clarity are the areas where most MEUs want to see an improvement 11
Figure 7: There are a number of processes that contribute to residential billing complaints 12
Figure 8: British Gas recorded a huge spike in complaints during its billing migration 15
Figure 9: Liberalized markets require additional processes in the residential retail environment 17
Figure 10: AMI functionalities introduce complexity to existing processes and add completely new ones 19
Figure 11: A large number of core processes are impacted by AMI 20
Figure 12: AMI will change the basic processes of the contact center 21
Figure 13: Market liberalization and AMI affect different processes within a utility's retail operations 24
Figure 14: Ovum expects further investments in technology along the meter-to-cash value chain 25
Figure 15: There are many similarities between future residential and current C&I billing complexities 27
Figure 16: All the major players in a CIS migration must contribute to the success of CIS migrations 33
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