When it Comes to Evaluating Retail Energy Billing Systems – Consider Getting Your Own Pond
So, it’s time for a new billing and CIS solution. Should you buy a commercial off-the-shelf (COTS) billing system – which might perpetuate some of the same problems you’re facing now – or build a custom solution that perfectly meets your needs? It’s a recurring question in plenty of complex, high-tech industries, and retail energy providers are no exception.
While purchasing a mature COTS system can ensure market and rate expertise, these products tend to be expensive. And, because you don’t actually own the source code, you can’t customize it without significant expense. To make matters worse, if you’re “just another fish in their big pond,” timing can be unpredictable.
Alternatively, you can develop a custom solution from scratch. The clear benefit to this option is that you’ll (eventually) get a solution that perfectly meets your needs. The expense can still be prohibitive, however, and the time to market becomes significant. You can typically count on a minimum of 18 to 24 months to design, build and test a custom product, as well as another 6 to 12 months to make the product “mature” once it’s gone live.
But buying and customizing are not necessarily your only two options. A third option exists, that is not often mentioned, and it just might be your “best of both worlds” approach.
- To put this option into play, you begin by leveraging a mature, market tested software platform with more robust capabilities than your current system. Although initially, it may not have the market coverage you’re looking for, assuming it offers a flexible, services-oriented architecture you can easily extend its capabilities to meet specific market or business needs.
- The second key component of this plan is to find an implementation and development partner – one who has deep market expertise across all relevant ISOs, LDCs and commodities – and who can use that expertise to create the additional features you need. Larger REPs might have this capability in-house, but many will be looking for a trusted IT services organization who can partner with their personnel to make the implementation sizzle.
- A third key component is the ownership model. Would you consider source code ownership instead of a traditional licensing model? If so, then you essentially have the keys to the car AND the ability to drive it wherever you want. To top things off, you achieve the same level of customization as an in-house build, but in in half the time and with a far more compelling ROI. Once the product is implemented and customized, you won’t have to rely on an outside vendor. The end result, you have your own pond!
What are some of the other benefits of this hybrid approach?
Control
You will have complete control over the solution design and features.
Ownership
With a product suite that grows along with your company, you gain the ability to control your future.
Proven Products
You don’t have to start from scratch as you would with a custom-built solution. Plenty of products have been tested in the deregulated market, and many include robust features such as Prepay and Postpay Billing, Broker Modules, Mobile Apps, Web Portals, Enrollment Portals and Payment products.
Customization
Begin with proven products as your baseline, and then enhance them over time to suit your changing needs.
ROI
You can realize a significant reduction in ongoing “vendor-related” operations cost.
Quickly React to Changing Markets
With the convergence and evolution of deregulation, and smart metering technologies, consumers are more demanding than ever. At the same time, new regulations and changing market demands make it difficult to stick with a billing system that isn’t highly flexible. A hybrid approach allows you to work with a flexible, scalable technology that can be customized on the fly – and at your schedule, not the vendor’s – to meet changing market rules and regulations.
Summary
Fortunately for REPs, a hybrid approach offers the best qualities of both customized and off-the-shelf solutions, but without the downsides. They can get the lower costs, reliability and customer support of a pre-packaged software, along with the customization benefits of an in-house solution. This combination allows REPs to set themselves apart from their competition by satisfying their customers’ needs in the near term – but also responding quickly and cost-effectively to market changes in the future.
