UtiliPoint® International recently completed a report
that analyzes the North American utility customer care industry.
The report is based on primary research gleaned from our
fourth annual survey of North American utilities that resulted
in responses from over 300 utilities. The survey respondents
consisted primarily of managers or directors of billing
and customer care at North American utilities and were completed
in the spring.
While the survey covered several aspects of customer service
in the utility industry, one area of particular focus was
that of customer information systems (CIS). The results
of the study indicate that since the survey's inception
in 2002 the number of utilities that have been in the market
for a new CIS has grown significantly. This year 16.7% of
respondents indicated that they are in the market for a
new CIS. While this year represents the largest saturation
that the survey has ever seen for CIS, it also was the slowest
amount of growth that we have seen.
In this analyst's opinion, the 16.7% saturation represents
a “ceiling” of for the true saturation that
will occur over the next year. There are several reasons
for this. First, the time table for the decision making
process is quite lengthy. In our recently concluded survey,
approximately two-thirds of utilities indicated that the
time frame for the decision making process would take over
nine months, and 39% of these utilities indicated that the
time frame would take over a year.
Secondly, while a utility may be in the market for a CIS
today, developments such as new budgetary constraints and
executive changes can easily put a halt to these plans.
As a case in point, while last year 16% of respondents
indicated that they were in the market for a CIS, at the
end of the year only fifteen CIS deals were completed for
utilities serving over 75,000 customers.
With these caveats in place, let's take a look at where
the growth is in the CIS market.
Where is the Growth
While growth is coming from all of the regions
of the U.S., Southern respondents did report a slight decline
from the previous year. Of all the regions, Canada has a
higher percentage of utilities that are in the market for
a new CIS, and the Midwestern U.S. has the lowest percentage.
Even so, all regions reported double-digit growth.
Looking at the information by commodity type shows that
water utilities have the highest percentage of utilities
in the market for a new CIS with over 21%. Gas utilities
had the lowest percentage of utilities in the market for
a new CIS with less than 10%.
Looking at the information by company type reveals that
all of the growth over last year is coming from co-operative
utilities, but they are still adopting at a slower rate
than the other utility types.
This marks the third consecutive year that municipal utilities
had the highest percentage of respondents that are currently
in the market for a new CIS. In North America municipals
have been often overlooked by an industry that focuses attention
on the activities of investor-owned utilities.
Municipal utilities are truly unique both in the range
of sizes they come in and in the diversity of the services
they provide their customers. 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 cooperatives.
UtiliPoint® International sees the municipal CIS market
as being more robust in the municipal space because of this
extreme pressure to control cost.
The survey, along with the many conversations that UtiliPoint®
has had with both our utility and non-utility clients, indicates
that the CIS marketplace is improving and that the market
continues to change at a very rapid pace. Look for this
year to be a deciding one for many CIS vendors in the area
of utility customer care.
