In past U-Blogs, I’ve commented that, while the utility industry is evolving in many ways, a large number of back-office and operational processes remain unchanged from a generation ago, despite how key functions like billing and customer care work today versus the past. The very fact that consumers are now “customers” and not simply ratepayers calls for an entirely different approach. One way to catch up: collaborate.
Given the pace of change, utilities could benefit from some of the same strategic sourcing options used in other industries in transition, such as telecommunications and banking. The “make-versus-buy” decision does not automatically mean in-house versus outsourcing, but rather a host of possible strategic partnerships that can rapidly help close gaps in skills or resources for critical but noncore business functions.
And those adjectives are themselves important—“critical but noncore”—that means that it could be back or front office, internal or customer facing. Business functions that are candidates for sourcing partnerships including metering, order-to-cash and multiple processes in customer care, from inbound/outbound call center management and outage notification to data analytics that enable energy service providers to better target their consumer offerings.
We all know that Accenture is one such option; e.g., we process 180 million utility bills a year. I won’t belabor that in an industry blog, and you can learn more about that here
if you like. I will say that when utilities need to flexibly scale resources and leverage technology and people to manage a shifting market landscape, sourcing partnerships and industry collaboration (i.e., shared services centers) can play a very helpful role.
Regardless of what path you take, increased digitalization from the smart grid will give utilities more ways to serve consumers, but with a corresponding shift in the required technologies and skills. For example, as our reference guide
shows, in the case of “meter data-based billing exceptions … utilities will also need to develop technologies and processes to manage the new exceptions.”
Now multiply that need across the organization. Accordingly, utilities would be well-served to formally identify and assess their various “build, buy or ally” options; e.g., it is common in some industries, like telco and banking, to have a chief sourcing officer for just that purpose.
Tell us what sourcing options your utility is considering and why.