Over the past several months UtiliPoint® International
has visited face-to-face with more than a dozen thought
leading, utility customer service executives. As part of
our ongoing research query to both identify the needs of
utilities regarding customer information and customer management
and to understand what technology helps to solve utilities'
most pressing problems, we have sought to understand the
plurality of thought about the best leverage for customer
information systems (CIS) and customer relationship management
(CRM) applications.
Although the utilities market is far from being univocal
or aligned in common thinking about CIS and CRM leverage,
there seems to be a broad based agreement among utility
executives and line-of-business managers that better CRM
analytics and improved CRM/CIS data leverage are of key
importance.
By definition, CRM analytics comprises all programming
that analyzes data about an organization's customers and
presents this data in such a way that better and quicker
decisions can be made. In many industries, as websites have
created a new and often faster and more convenient way to
interact with customers the opportunity and the data collected
about customers has become more apparent, a number of software
companies have emerged into the market offering software/service
products that do advanced customer data analysis.
Customer analytics applications and services can provide
utilities with useful customer segmentation, groupings,
message personalization capability, event monitoring, what-if
scenario modeling, and even predictive modeling—particularly
predictive modeling showing customer propensity to buy additional
products or services. The benefits of CRM/customer analytics
as often cited by vendors are naturally appealing. Vendors
claim that through the use of their products/services utilities
will have better and more productive customer relations,
be in a better position to “up-sell” and “match”
service offerings with customer needs in and develop more
competitive pricing.
Despite the appeal, potential—and candidly, the hyperbole—of
the impact of customer analytics, in the energy and utility
industries there are more than a few challenges engendered
in CRM analytics applications and analytical services in
the energy and utility markets. One of the major challenges
is how to integrate the analytical software with existing
legacy systems as well as with other new information technology
systems. Do utilities really want to buy marketing engagements
with a technology/service vendor? Another huge challenge
for utilities in seeking to leverage CRM analytics is that
utilities really do have an obligation to their customers,
shareholders, and to the overall efficiency of their organization
to leverage the data they have to the greatest effect. Do
analytics provide the best value for dollars spent? UtiliPoint®
does not see a strong value correlation.
CRM and customer care are very important dimensions of
utility operations, but CRM/customer analytics are only
one type of analytical intelligence. UtiliPoint® and
other credible industry research shows that corporate performance
management, probability analysis, supply chain analytics,
and activity based costing opportunity are all more importantly
and likely deserve more investment than CRM analytics as
they yield higher return on investment.
Source: Information Week, Gartner Group, May 3, 2004 and
UtiliPoint® International, February 25, 2005; Note:
This graphic represents views from across industries and
do not wholly reflect views in the energy and utility industry.
This is not to say that CRM or CRM/customer analytics are
is unimportant. In fact, CRM analytic efforts at utilities
and energy companies have illustrated for example, that
broadly speaking, utilities tend to focus either on behavioral
or attitudinal data that they collect from customers, but
have real difficulty combining the two. As a consequence,
utility organizations might understand what their customers
do or how they feel, but do not have a clear understanding
of how transactional and relational data can be used together
to define both or what some academics have called “the
total customer relationship."
Utilities know from our past advice, among other things,
that they must continue to invest in their customer facing
systems and to improve customer service. The challenge is
in identifying what investments and technologies and service
are worth utility and energy executive attention. It is
this author's opinion that technologies and services that
are purely analytical and proscriptive, in terms of what
utilities should do differently with regard to “customer
targeting” and “customer up-sell” are
probably not good near term investments.
As a concrete example, this author would point to technology
and service suppliers like Boston based Fortelligent, Inc.,
that have little industry domain expertise and whose focus
is on marketing analytics and other narrowly defined, campaign-based
analytics. Where is the value for utilities today? In the
future for companies operating in highly competitive environments
where service providers vie for customers across geographies
and multiple commodities such campaign or market facing
analytics might be useful, but the reality is that most
utilities already have access to the data and information
they need to campaign. What most utilities lack is bandwidth,
capability, and business drivers to implement such a campaign.
This author and analyst is growing weary of hyperbole.
In the utility industry there is a clear need for excellent
CRM solutions and auxiliary systems. UtiliPoint® believes
that there is a renewed and important place for traditional
CRM applications providers such as Siebel and truly innovative
application technology vendors and service suppliers like
EnvoyWorldWide to fill the gaps and mend the missing links
in CRM infrastructure and leverage.
Customer relationship management and the actual relationship
with customers remains an incredibly important aspect of
utility operations—not to mention the source of the
bulk of utility revenue. UtiliPoint® is in the process
of evaluating customer relationship management, analytic,
and business intelligence technology and will be speaking
much more about these technologies and their benefits as
well as calling out hyperbole. There is a difference between
technologies and the value they provide and UtiliPoint®
will not be shy about articulating the difference in value
between vendor offerings. Seriously, will the real value
adding technology providers for utilities please stand up?
