UtiliPoint: How has your
career led to your appointment as CEO of SPL WorldGroup?
Harry Debes: To a great extent, my career
has tracked changes in the software industry.
In the late Seventies, software was largely the purview
of large, global computer companies. And I started at one
of the best, as a systems engineer and marketing representative
for IBM Canada.
In the eighties, successful computer companies began to
turn market control into market leverage. That left room
for value-added resellers, like the one I built—an
IBM VAR focused on manufacturing and enterprise software
for the AS400.
For the industry as a whole—and for me personally—VARs
were a conceptual springboard for enterprise software companies.
I spent 14 years at two of them, GEAC and J.D. Edwards.
It was a period in which my focus expanded from regional
to global.
Enterprise software will never crowd out the smaller software
companies focused on specialized business models like utilities.
At the same time, however, the sheer size of today's ERP
vendors dictates certain market realities.
To succeed, CIS companies must operate comfortably within
larger enterprise structures. Their own economies of scale
and customers' ROI require true products, not service-based
offerings. And they must achieve the size and financial
stability that assure their customers of their longevity
and ongoing commitment to product advances.
Could you elaborate on
the relationship between enterprise systems and CIS companies
like SPL?
Utilities' relationships with customers are far more complex
than those found in most other businesses. Utilities must
respond both to strict regulations and to customers dependent
on the lifeline services they provide. These unique obligations
lie at the root of the utility CIS.
Utilities perform other functions, however, that are common
to all companies. There's no need to reinvent the wheel
in standard enterprise areas like human resources, general
ledger, or common industrial processes.
Integrating the specialized CIS with larger enterprise
systems is not a wholly transparent process. One of SPL's
strengths is its robust set of integration tools and its
extensive experience in integrating its products with software
from every major enterprise vendor, including SAP. From
the user perspective, the results are seamless.
Another strength is our partnership with PeopleSoft. In
this instance, we've gone beyond standards-based integration
and built an entire version of our product using the PeopleTools®
tool set.
You have noted your J.D.
Edwards experience. What do you believe are the futures
of J.D. Edwards, PeopleSoft, SAP, and Oracle within the
utility industry?
Harry Debes: The J.D. Edwards/PeopleSoft
combination is very powerful. For the first time in many
years, there is a meaningful challenge to SAP's historic
leadership position in enterprise software. As utilities
consider their enterprise options, today's two major contenders
are far more evenly matched.
Oracle is, of course, a significant player in utilities
for their database and financial solutions and I don't foresee
that changing.
SPL's partnerships with PeopleSoft and Oracle (for their
database) give us excellent knowledge and position to expand
our markets and our footprint.
How do you envision growing
SPL WorldGroup?
Harry Debes: Organic growth is key. We'll
help current customers expand. We'll acquire new customers
as markets recover from the doldrums of the past two years.
We're expanding into new geographies, including the countries
that will join the EU in May.
We expect to leverage our relationship with PeopleSoft
into new business arenas and additional geographic regions.
We will focus on additional partnerships where we can have
shared, meaningful success objectives that provide incentives
for real cooperation.
Our Board has also given the go-ahead for expansion on
additional fronts. We will likely to use our strong cash
position to make one or more strategic acquisitions. You'll
likely hear more about that in the coming year.
Do you foresee more international
or North American growth in utility customer care?
Harry Debes: Long term, markets outside
North America will likely provide more opportunity, for
two reasons.
One, transitioning and deregulated utilities find that
legacy CIS damages their market position and narrows their
prospects. SPL's CorDaptix™ solution is highly competitive
in rapidly deregulating markets like the EU. It is a bridge
to the future that also meets utilities' requirements for
long-term competitive positioning.
A second growth opportunity lies in countries poised for
above-average rates of economic growth. That growth can't
happen without utility infrastructure, and utility revenue
is the obvious source of funds to pay for that infrastructure.
Underpinning revenue, or course, are flexible and responsive
customer care and billing systems like ours that include
such options as pre-pay.
Where to do you see SPL
in the next three to five years?
Harry Debes: SPL will be considerably
larger than it is today. Growth will help us serve our customers
cost-effectively and expand our product footprint. It benefits
all our stakeholders.
Beyond that, my goals are to strengthen and improve the
company as much as possible so that we will have multiple
options going forward. An IPO could be one of those options.
While that would depend in part on the market, I expect
the company will be positioned for such a move within two
to three years.
What trends and developments
do you see as key forces shaping your market environment?
Harry Debes: In North America, the key
utility issue is reliability. That creates opportunity for
SPL on two fronts.
First, there's a strong relationship between reliability
and certain CIS options like complex billing. It's essential
for “demand response”—the market-driven
replacement for interruptible rates that permits medium-size
and larger users to reduce demand on schedules that accommodate
specific market dynamics. States like New York are already
enhancing reliability through demand response. The U.S.
Federal Energy Regulatory Commission has become a strong
advocate.
SPL is well positioned for this development. We offer a
complex billing solution that can be implemented on a stand-alone
basis, as part of a larger billing system for commercial
and industrial customers, or as part of an entire CIS replacement.
There's a second relationship between CIS and reliability.
To the extent that reliability rests on physical infrastructure,
utilities must be able to pay for improvements and expansions.
Utilities need CIS systems that maximize the required revenue.
Utilities must minimize time from meter to bill and from
bill to payment. They must also enhance collections. Those
needs play directly to SPL product strengths—rapid
and efficient data and bill handling, multiple effective
options in credit and collections. And as with complex billing,
we can enhance our clients' C&C capabilities as an add-on
to the current system or as the start of a larger system
change.
Collections are also a major focus of markets outside North
America. Some Eastern European countries, for instance,
have remarkably low collection rates—at least by the
standards of Western Europe, Australia, and North America.
It's a legacy of historically unmetered utility services.
For the most part, though, outside North America, collection
issues are just one part of the larger need to accommodate
deregulation. That's our major focus as we work with clients
in the EU, Japan, and Australia.
Deregulation is an evolving concept. We've seen that in
the U.S. and Canada, too. And it creates market opportunities
for us by placing a high value on systems like ours that
can change in tandem with markets and customers.
Outsourcing has been
a buzz lately at utilities. Will you be entering that market?
Harry Debes: We already offer outsourcing
in conjunction with partners. That will continue. When customers
want to outsource, we are ready to do so.
The bigger issue is: do most utilities really want to outsource
CIS? Statistics can be misleading. A large percentage of
utilities have “some” CIS-related outsourcing.
But when you look behind the numbers, what you find is a
lot of “outsourced” printing and mailing.
Given current market conditions, we believe that continuing
to work with and through partners is the right short-term
approach. And we have excellent partnerships in this arena.
Longer term, we're listening to our customers and our markets,
and we'll be ready to respond as needed.
Energy legislation is
a continuing issue in the United States. Is it likely to
affect SPL?
Harry Debes: Utilities' positive responses
to reliability issues are to some extent reducing the pressure
for new energy legislation. And it's highly unlikely that
an energy bill would pass this close to a major election.
One area we continue to watch, however, is the Public Utility
Holding Company Act (PUHCA). Repeal would be a positive
spur to M&A activity in the utility sector. The resulting
larger utilities would significantly change the market.
Today, SPL competes with a number of companies whose systems
accommodate several hundred thousand customer accounts.
But only a few competitors offer true products like ours
that scale to many millions of customers. And even fewer
can handle multiple jurisdictions and expanding sets of
regulations with SPL's proven efficiency and low total cost
of ownership.
About Harry Debes, CEO of SPL WorldGroup
Harry Debes is President and CEO of SPL WorldGroup,
the customer care and billing leader for the worldwide energy
and services sector. Debes joined SPL in November 2003 from
J.D. Edwards (now a part of PeopleSoft), where he was senior
vice president of sales and services for the Americas. He
was previously with Canadian business performance software
vendor Geac, where he served as president of GES Americas
and as managing director of the company's Asia Pacific business.
Debes also served as vice president of marketing and R&D
for Jonas & Erickson, which was acquired by Geac in
1990. From 1979 to 1988, he was founder, CEO, and chairman
of Columbus Systems, an IBM MRP/ERP VAR. Prior to that,
he was a systems engineer and marketing representative for
IBM Canada. Debes holds a Bachelor's degree from University
of Toronto and an MBA in accounting and finance from McMaster
University.
