'Smart' outsourcing - a game changer for utilities

Benefits of M2C process

There is a pressing need for utilities to overcome the inherent operational issues due to a legacy culture combined with manual procedures, inefficient processes and outdated technology in order to leave behind the tag of a digitally conservative industry, which can be achieved by reducing operational costs, augmenting customer retention, optimising load management, enhancing meter data management and meeting regulatory demands.

Furthermore, of late, on one hand, utility providers are facing a stiff competition from new entrants as a result of market deregulation worldwide, while on the other, they are struggling to retain their customer base. All said, utilities seem to embrace the digital with smart-grid and processes like meter-to-cash, which is a significant process for utility companies to realise revenue generated from the down-stream value chain as well as connect with end-user directly. If done effectively, M2C also entails a fall on the overall cost-to-serve per customer by proactively communicating with customers by addressing and solving their complaints, and thereby improving the price competitiveness.

However, utilities are being challenged with capital intensive investments in upgrading to smart-grid/metering infrastructures and consumer-centric revenue models, for instance, net-metering and time-of-use pricing that could significantly drive revenues down as consumption shifts to off-peak periods. Hence, utilities cannot ignore the efficiency if they adopt the M2C process.  For the companies, M2C brings a bouquet of benefits as depicted in the figure.

In September 2009, the European Union ratified a “Third Energy Package,” which aims to see every European electricity meter smart by 2022. Deployment of smart meters involve huge infrastructure cost as it brings in many elementary modifications to the M2C operations and managing the operations with cost efficiency may not be an easy task for utility companies by themselves, which is where the external service providers fit in. Managing the cut-over from traditional to smart meters, dealing with new network technologies, the diminished role of field services, and the upgrades required to meter data management systems (MDMS) are just some of the key obstacles that this industry needs to overcome while implementing smart meter systems. This would mean that instead of monthly or quarterly readings, consumers can have real-time access to data accurate up to an hour, which present a new challenge in the form of a vast amount of information and how a utility should leverage the data for meaningful business intelligence purposes.

Utility industry have found outsourcing as one of their solutions wherein the service providers let utility companies use their own technology platforms that allows M2C process to be delivered by utility companies without any upfront capital expenditure. Some of the M2C functions that are being included on the smart metering wave range from pre-implementation advisory to post-implementation services such as smart analytics offerings. According to the Everest Group, M2C business BPO has been projected to reach nearly USD 70 billion from 50 billion globally, nevertheless, the current penetration remains insignificant. Moreover, outsourcing firms can help in standardisation of processes that result in overall enhanced performance of utilities.

Author: Debaleena Debnath
Debaleena is a digital media consultant @ speradigital.
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