When it comes to providing top-notch customer care at a
municipal utility, the requirements differ from that of
an investor-owned utility or even a cooperative utility.
Many municipal utilities serve multiple commodities and
services. These can include but are not limited to electric,
gas, water, wastewater, solid waste, storm drainage, cable,
Internet, and telecommunications.
In North America municipals are the oft-overlooked utilities
that provide more than 43 million customers with reliable
service. These unglamorous but vital organizations are under-appreciated
by a too-often star-struck industry that assumes thought
leadership, innovation and complexity rest with the large,
investor-owned utilities that are episodically either the
gleam of Wall Street's eye or the bane of the utility world's
existence.
Municipal utilities, unlike investor-owned utilities, are
unique both in the range of sizes they come in and in the
diversity of the services they provide their customers.
On the biggest end of the scale, municipals like Los Angeles
Department of Power & Water and Santa Monica Utility
District behave organizationally like their publicly-traded
brethren. But for the rest of the municipal market that
are made up of utilities like City of Reading, Massachusetts
and Doña Anna County, New Mexico, the conventional
definitions of utility service provider are anything but
conventional.
By definition, municipal utilities are utility service
providers that are organized as functions of town, city,
county, and district government. In most jurisdictions,
the municipal utility is the largest and most capital-intensive
government function and the most visible authority and business
in the local area. Municipal utility governance and structure,
although tuned for the service provider business, often
reflects the kind of thrift characteristic of governmental
organizations. Likewise, municipal utility organizations
and budgets are far smaller, more directed and less flexible
than those of investor-owned utilities and even cooperatives.
Municipal Information Technology Maturity
While technology is not a silver bullet instantaneously
capable of turning municipal utility managers into “super-executives”
capable of hurdling all of the troubles facing the municipal
utility enterprise, the rational selection and deployment
of IT is key to solving many municipal utility operational
and business challenges. IT, especially when viewed as a
strategic, integrated part of operating a utility business
can be powerful enabler providing opportunity for utility
managers to concentrate more directly on achieving business
goals and utility personnel to completing work faster, more
efficiently and to greater result for customers.
In fact, within the municipal utilities market, UtiliPoint
international has observed that IT is increasingly playing
a more strategic role in municipal utility managers' efforts
to understand and rationalize business process, create operations
efficiency and increase corporate business process, information,
and knowledge transparency.
A Difference With a Distinction
As previously mentioned, many municipal utilities
are further differentiated in that they often are service
providers for multiple commodities, e.g. gas, electricity
and water, and it is common that municipal utilities also
provide solid waste, wastewater, cable, telephony and Internet
service. In the back office, many municipalities are responsible
for handling both data and business processes for other
organizations in the municipal enterprise. Notably, municipal
utilities create and distribute bills for numerous city
departments and are responsible for the operations and maintenance
budgets and activities for important city services such
as fire, police and fleet maintenance.
Technology suppliers and vendors to the municipal utilities
have long understood that the technological functionality,
business development and sales process for the municipal
utility market is more complex than the pairing of business
need and software solution. For customer information systems
in particular, cost-benefit analysis, more art than science
anyway in the municipal utility market, must encompass an
overall understanding of budget constraint and capability
beyond the utility-customer relationship. In fact, CIS for
the municipal utility is really just one point of the constellation
of core capabilities that include financial administration,
regulatory compliance and asset planning that vendors must
make sure are comprised in their wares to this market.
Municipal utilities also differ from others in the utility
market in that technology adoption and integration are seen
as a necessary and important component of overall organizational
and operational capability. For municipal utilities, the
right technology is often a question of the guaranteed ability-to-serve,
while for most investor-owned utilities, the operational
benefits of superior technology are seen as a way to reduce
the cost-to-serve. This is not to say that CIS selection
is more or less important for any particular segment of
the utility market, but rather, to indicate that for municipal
utilities, mistakes from poor CIS selection and implementation
may have greater impact.
That said, CIS technology suppliers and vendors that target
the municipal utility tend to place far greater emphasis
on technology and integration partnerships than their peers
serving IOUs and cooperative marketplaces. Some of the more
successful CIS providers in the municipal marketplace have
adopted strategies that de-emphasize the politics and the
market power aspects of partnership in favor of true technological
and integration superiority that give municipal utilities
both the product and the flexibility that they require.
From the macro perspective, UtiliPoint research shows that
while in the next few years there will be several large
investor-owned utility CIS projects, municipal technology
replacements and upgrades will likely provide richer hunting
grounds for well-positioned technology vendors.
UtiliPoint conducts research on the North American utility
market every year. This year the water utilities that serve
over 50,000 customers that participated in UtiliPoint research
included:
| Avondale Water & Sanitation |
EPCOR (Canada) |
| District (CO) |
Fairfax Water (VA) |
| City of Anaheim |
Gainesville Regional Utilities |
| City of Dallas, TX |
Greenville Utilities (NC) |
| City of Denver |
Lafayette Utilities System |
| City of Hesperia, CA |
Lakehaven Utility District (WA) |
| City of Pasadena, CA |
Miami-Dade County (FL) |
| City of San Jose, CA |
Palm Beach County, FL |
| City of Saskatoon (Canada) |
Santee Cooper |
| City of Vancouver, WA |
Snohomish Public Utility District No. 1 |
| City Utilities of Springfield, Mo. |
Suburban Water Systems (CA) |
| County of Sacramento, CA |
Turlock Irrigation District (CA) |
| East Bay Municipal District (EBMUD) |
|
The survey found that municipal utilities are in-line with
others in the industry on bad debt. In fact, 91 percent
of water utilities in North America write-off less than
2 percent of their billings.
Furthermore, UtiliPoint International sees the municipal
CIS market as being more robust in the municipal space because
of the extreme pressure to control cost. In fact this pressure
has spurred the growth of such notable trends as the growth
of CIS and related business process outsourcing across the
industry. UtiliPoint research shows that 43 percent of municipal
utilities have either outsourced or are planning to outsource
an aspect of the customer care function, indicating that
outsourcing is becoming an option for municipal utilities.
When water utilities are asked what function of customer
care they would likely outsource over the next two years,
bill print, credit & collections, and bill remittance
rank high on the list. Only 8 percent of water utilities
entertain outsourcing the actual CIS. What the water utility
may outsource and where the cost savings lie do not always
correlate however. The same water utilities answered that
the cost savings lie in overhead/allocations (always a favorite
for utilities of any type), meter readings, and billing
& payments.
Armed with this data, UtiliPoint is completing a first-of-its-kind
ranking of municipal technology vendors and utility industry
outsourcers that serve the utility market. Vendors and service
providers included in this analysis are:
| Vendors |
Service Providers |
Innoprise
|
Accenture |
| AMX International |
Alliance Data Systems |
| Harris-NorthStar |
First Data Resources |
| Harris-Cayenta |
IBM |
| SAP |
Delinea |
| Conversant |
Capgemini Energy |
| DST |
Vertex |
| Hansen |
NISC |
| Indus |
SEDC |
| Utility Solutions |
Viterra Energy Services |
| PeopleSoft (SPL) |
|
| Systems & Software |
|
| AUS |
|
| Cogsdale |
|
These vendors and service providers are rated on a variety
of elements, the major being:
