Online Customer Self-Service Transforming Utilities Industry According to Study

NEW YORKà‚–With deregulation proceeding rapidly in 20 states, brick-and-mortar utilities are looking for ways to efficiently utilize the Internet by getting their customer-service operations online, according to Cap Gemini Ernst & Young U.S. LLC (CGE&Y). Formerly Ernst & Young Consulting Services, which was rated by Forrester as one of the top two eBusiness strategy consultants, CGE&Y recently conducted a public Website survey of 90 utility companies.

The survey identified eBusiness trends in eInformation and eCommerce and, in general, found that the utility industry is expanding its eBusiness capabilities, particularly with regard to customer interactions. For example, new service application is offered by 41 percent of the utilities surveyed, up from 29 percent at the end of 1999, and eBill Presentment and Payment (EBPP) is offered by one-half of the utility companies, also up from 29 percent in December 1999.

“The eBusiness trends and practices in the utility industry are vast,” said Thomas Yacko, CGE&Y vice president. “Some functions identified serve to increase business efficiency and productivity, while others deliver opportunities for growth. Utility companies, often burdened by the high cost of the recent implementation of Enterprise Resource Planning (ERP) and deregulation, have typically been late adopters, but they understand that eBusiness functions truly add value by developing new markets, lowering costs, reducing capital investments, and enhancing time-based competition.”

Of the two stages evaluated, eInformation, characterized by providing one-way information, experienced the most activity since the third quarter of 1999, with significant change coming from the ability to send customized e-news via e-mail (up 540 percent), conduct customer surveys (up 667 percent) and provide news clippings (up 124 percent). The survey also found utility companies to be slow adopters of electronic coupons and Webcasting. Florida Power & Light, Arizona Public Service and Commonwealth Edison are examples of companies that have increased their eBusiness capabilities since the third quarter of 1999.

The eCommerce stage is characterized simply by the exchange of transactions with constituents. This allows customers to do more than merely place requests for service. For example, they may be able to get real-time pricing and quote information, confirm service requests, and pay for purchases online.

“The eCommerce stage means a whole new level of responsiveness to customers and other stakeholders,” said Yacko. “It also presents the opportunity to share information with suppliers and offers collaborative purchasing as an option.”

The most significant changes in eCommerce, since the third quarter of 1999, have been in customer self-service, specifically ordering products (up 286 percent), requesting duplicate bills (up 227 percent) and receiving online pricing and quotes (up 184 percent). In addition, several new utilities’ eProcurement trading exchanges surfaced with the intent to capture the cost and process efficiencies of electronic procurement. New entries, such as essential.com, houstonstreet.com and energy.com, added significant eCommerce functionality to their Websites.

CGE&Y has centered its consulting practice on serving eBusinesses, focusing on global vertical markets. The firm has been conducting periodic surveys of industry Websites to assess the impact of the Internet on market capitalization, shareholder return and overall functionality.

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