IssueAlert Emerging Technologies ~ February, 2005

At the beginning of this month, consulting, technology services and outsourcing company Accenture and Irvine, CA-based NWP Services Corp. (NWP) signed a 10-year outsourcing contract for information technology, applications management and development services.

This outsourcing agreement with NWP is the latest in a growing list of outsourcing deals anticipated by UtiliPoint® this year and next. Generally, the proof in the pudding of outsourcing is in the eating—and like several other utilities, NWP, the largest utility management and resident billing services provider to the U.S. multifamily housing industry, is able to cut its costs through the transfer of software development and software maintenance, customer care, and billing information to an outsourcer, in this case Accenture.

As part of this deal, Accenture has agreed to purchase the Open-cIS billing and customer care application developed by NWP's Santa Ana, CA-based subsidiary Open-c Solutions. Open-c Solutions had previously signed a three-year deal with NWP to provide select billing and customer cares services for the company. As of the time of the acquisition, NWP used the Open-cIS to bill individual apartment residents in multi-tenant housing units for utilities, thereby enabling property owners to better recover utility costs and manage development overhead.

In the new agreement, Accenture will take over ongoing Open-c software maintenance, new development and technology support responsibilities for the Open-cIS system. Accenture further gains a foothold for serving NWP's existing customers that are billed on Open-cIS, which include the customers of Washington Gas, Washington Gas Energy Services and Wisconsin Public Service.

Over the past several years, NWP developed Open-c and the Open-cIS application with an advanced software architecture and data model to allow companies to configure Open-cIS to meet their specific needs (whether they are a utility, a marketer, a billing service bureau, or a hybrid company) and to ease the complexity and reduce the cost of building and maintaining billing and customer information systems.

Specifically, the Open-cIS application is notable for its ability to provide true multi-company, multi-receivable, and multi-jurisdiction billing functionality. Built upon a flexible and scalable three-tiered platform and including integrated browser technology the open, well-documented Component Object Model (COM) architecture easily integrates with other NWP applications.

The strengths of the Open-cIS application are a clear advantage to outsourcing services provider Accenture in serving its newest customer. Open-cIS, however, also presents a challenge for the company as it has not received market acceptance beyond its parent-fed incubation environment. In the utility municipal and mid-market space, UtiliPoint® has seen other cutting-edge technology providers like Innoprise gain the increasing confidence of its customers and the market, signing up both new and additional deals, and migrating new functionality to its application. Especially in the municipal and mid-market, UtiliPoint research shows that there is strong opportunity for new players and new platforms.

UtiliPoint® has not learned from Accenture whether the company intends to use the Open-cIS application as a platform for other outsourcing deals. According to UtiliPoint® research and calculation, Accenture likely has more than $350 million per year in revenue from utility IT, business process management and business process outsourcing. So far, the company has not announced any specific strategy of a move toward concentrating outsourcing service on any particular platform or set of platforms. However, in the dynamic and quickly maturing market game of winning utility outsourcing customers and keeping them happy, it will be interesting to see what is next for Accenture and the other leading players in the North American utility outsourcing market.