IssueAlert Emerging Technologies ~ December, 2003

The Billing System
Historically, utilities have focused resources on constructing, maintaining, enhancing and operating the infrastructure required to provide end use customers with access to the commodity (e.g. electric, gas, water, sewer) and subsequent creation of a revenue stream. The utility created various service functions in order to interact with the end use customer for purposes of: servicing infrastructure at the delivery point; reading the meter to record consumption; generating a bill for service; processing payments; resolving disputes and exceptions, and collecting past due money.

These utility service functions ultimately worked to insure the revenue stream would be continuous in support of utility operations. The primary software application responsible for supporting these activities has been known for 40 years as “the billing system”. The billing system primarily focuses on supporting the transactional needs of each utility service function (e.g. process a payment, read a meter, inquire into an account, and collect money). Most discussions center around the meter, or the premise, or the payment with little information or consideration for the customer who sits on the other side of the transaction.

Customers quickly become frustrated when dealing with a utility, as most utilities have structured business operations to meet the needs of the utility rather than the customers they serve. Each customer interaction is treated as an individual transaction with little information sharing across service groups.

Billing systems typically have been developed and customized to a rigid set of utility specific business rules, validations, and data requirements. Changes require the involvement of Information Technology (IT) resources which typically result in time consuming and expensive modifications.

This type of billing system environment has been in place since the late 1960's and continues today in many utilities across the nation.

CIS—Regulated Distribution Utility
In the early 1980's, the term Customer Information System or CIS became very popular. It represented the utility industry's evolution from a meter, premise, and account focus, to a customer oriented environment as presented below in Diagram 2: Regulated Distribution.

Within this environment, staff are expected to embrace and delight the customer with exceptional levels of service exceeding anything the customer has come to expect of the utility. The core business cycle of interaction, service, usage, bill, payment, revenue, and collection remains unchanged. However, the utility now views the customer as a single entity rather than a series of unrelated transactions or accounts. A CIS enables the utility to move to a customer centric environment with robust processing and information content flowing around the customer while still retaining all of the essential billing system capabilities.

CIS—Unregulated Distribution Utility
As retail markets open, distribution utilities are driven to unbundle their business (i.e. generation, transmission, distribution, metering, etc) and are restricted in what services they may or may not offer to their customers.

To operate within a deregulated environment a distribution utility must alter its business cycle. Since rules vary across markets a distribution utility may continue billing in one market while in another market the distribution utility no longer bills the customer. Diagram 3: Unregulated Distribution, presents a business cycle scenario.

In this example, the distribution utility may continue to receive customer calls and dispatch service crews to address outages, meter work, and service work related to the distribution system. The utility may continue to read meters with responsibility for providing customer consumption and commodity-based information through a defined market interface to appropriate third parties such as marketers, independent system operators, etc.

Although the distribution utility may not physically produce the bill or process the payment, it still needs to calculated charges and provide to the marketer for inclusion on the customers bill.

The marketer or energy service provider functions as a retailer selling the commodity to end use customers. The distribution company continues to maintain the infrastructure "pipes and wires" and is responsible for physical delivery of the commodity to the marketer's end use customer. Unencumbered by the utility infrastructure, the retailer focuses on the end use customer as presented in Diagram 4: Retail Energy Company.

The retailer's business cycle may require it to function as the primary contact point for the customer, produce the customers bill, process the payment, and collect past due money. It is required to manage the commodity and communicate to the market using the defined market interface. However, the biggest difference in the retailers business cycle is the need to analyze customer data and reposition the company's marketing campaigns and offerings to target appropriate end use customers. To capture this information and provide better customer service, the retailer may operate a Customer Relationship Management (CRM) system which is used to log information during the customer interaction.

A CIS Transition Model
Movement from one business model to another requires significant change across the organization. In many instances a new CIS becomes the focus of change while other areas are ignored.

A strong CIS transition model provides a no-nonsense approach to migrating from a billing environment to a new customer information system. Regardless of your utility type and market position it is important to recognize your customer life-cycle and to successfully position your people, systems, process, and structure to provide customers with exceptional levels of service.

Greg Galluzzi is the President and Senior Consultant with TMG Consulting based in Austin, Texas. Greg has 25 years of information technology and consulting experience across 300 CIS projects. Greg can be reached at gregg@tmgconsutling.com.

©2003, UtiliPoint International, Inc. All rights reserved. This article is protected by United States copyright and other intellectual property laws and may not be reproduced, rewritten, distributed, redisseminated, transmitted, displayed, published or broadcast, directly or indirectly, in any medium without the prior written permission of UtiliPoint, Inc.