by Gordon Brown
The utilities marketplace has undergone considerable transformation in recent years, with changing regulations, cost pressures and technologies placing greater pressure on industry players than ever before.
When it comes to contending with these challenges, defining a structured and modular IT strategy can play a key role in helping utilities maintain a strategic advantage as their business grows. From an outside perspective, it may appear a straightforward task to move to an integrated solution made up of IT components and software packages that support international and localised requirements.
The reality, however, is that navigating the demands of dynamic local markets can present a considerable challenge for technology vendors. Taking a one-size-fits-all approach often comes at the price of significant implementation cost and customisation effort: a lesson that many customers have learned the hard way.
For example, look at the challenges of industry interaction and the associated data exchange. Managing data-flows with other companies is one of the key requirements for any utilities provider that operates in a complex deregulated market. The UK has been a graveyard for many projects where vendors have failed to understand the complexities of the market and underestimated the challenge of tailoring solutions to fit local requirements. This has led to significant overruns in cost and timescales for many UK utility IT projects, for example in the context of the implementation of Customer Management, Billing and Asset Management solutions. Higher than anticipated ownership costs have arisen and in some cases solutions have lacked the flexibility to keep pace with change.
The issue is not just limited to the UK – vendors now need to cater for increasingly complicated local scenarios in the Nordics, Germany and Australia, as markets undergo significant restructuring and reform. Smart meter roll-outs, growing merger and acquisition activity and industry restructuring are all contributing to increasing separation of roles in the energy value chain, and creating the need for new or updated industry-agreed processes and data exchanges.
With the rate of industry change showing no signs of slowing down, how can vendors work with utilities to ensure that they can keep pace?
In order to address the pressures of individual markets, localisation must feature as an integral part of any end-to-end solution. With a technology partner who understands the ins and outs of the local market – and whose products feature built-in support for localised conditions – utilities can better equip themselves to weather industry challenges and seize new opportunities.
Having vendor support through complex change cycles is valuable to the business because it helps to accommodate change and provide flexibility. With the right support, utilities can continue to adapt their internal, “private” business processes while maintaining compliance with complex and changing “public” processes.
Over the long term, industry players also need to work together to develop standardised processes and practices that help to tackle complexity within and across markets. New initiatives have been launched, such as ebIX – the European Forum for Energy Business Information eXchange – of which AMT-SYBEX is an active member. The aim is to address common issues by bringing countries together to harmonise industry standards and requirements.
With pressure on utilities continuing to grow, technology vendors cannot afford to underestimate the importance of local knowledge when it comes to meeting the challenges of a dynamic market. To find success, companies need solutions that combine proven support for today’s local requirements and the flexibility to meet future requirements as the industry continues to evolve.