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Distributed energy, smart meters, deregulation, social media, analytics and growing customer technology sophistication and expectations are transforming the focus of traditional billing and customer information systems (CIS) to a more customer-centric approach throughout the entire customer lifecycle, according to a report from Pike Research.

The firm, a part of Navigant's Energy Practice, forecasts that the global electric utility billing and CIS software and services market will grow from $2.3 billion in 2011 to $4 billion by 2017, expanding at a compound annual growth rate of 9.5%.

In particular, the deployment of advanced metering infrastructure (AMI) is driving this revolution in utility customer relationship management (CRM). In addition to the tidal wave of usage data that smart meter deployments will generate for basic meter-to-cash processes, AMI is enabling utilities to develop new products and services, such as demand response (DR), electric vehicles (EVs), prepaid metering and home energy management (HEM).

This requires utilities to master the product development, marketing and customer relationship skills to ensure program and competitive success. In turn, the billing and CIS systems underpinning these business processes will have to step up to the challenge, according to the report.

Many legacy billing and CIS are regarded as being technically unsuited for emerging smart grid requirements. The technical and workforce skill risks are high, and the investments required to meet the emerging standards of performance will be considerable. Also, interoperability is a high priority, and the span of systems involved - from AMI to meter-to-cash and from marketing and sales to product development and customer service - will make this a challenge.

Many utilities do recognize that legacy billing and CIS are untenable for the long term, and they are developing replacement strategies to avoid obsolescence. Billing and CIS replacement strategies range from wholesale IT transformation, selection of a managed service provider to outsource the function, alignment with providers of integrated software suites like Oracle and SAP, and/or more measured modular roadmaps for instituting billing and CIS functionality to accommodate new market realities.

The latter approach can range from aggressively upgrading key capabilities to embracing cost avoidance by grafting on late life kickers and extensions to legacy systems to avoid process disruption. However, this may only delay the organizational/business operations transformation that they will finally have to face.

Regardless of the strategy, utilities need to look at billing and CIS transformation holistically and work with vendors who understand the specific regulatory and government issues they face and have an appreciation of the strategic business situation and aspirations of the utility.

The billing and CIS market landscape is populated with a diversity of suppliers. Billing and CIS software and services market leadership is provided by Oracle, SAP, Accenture and IBM, but other software and services vendors (most with their own approach and market strengths) are also important participants, including Infosys, Hansen, Convergys, PWC, SAIC, Itron, Aclara, SAS and others.

Software companies like Oracle and SAP offer integrated suites. Consulting and systems integrators such as Accenture, IBM or Infosys can provide solutions and help with business and IT transformation. Smaller utilities may seek utility-oriented billing and CIS utility industry specialists such as Harris, Hansen or Ferranti. Meter data management system suppliers Itron and eMeter are also providing some elements of billing and CIS centered around meter data. Billing and CIS providers such as Convergys also have utility industry offerings that leverage their experience of handling complex billing and customer service requirements.

Of course, vendors are faced with providing complex solutions in a complex landscape with significant diversity in their utility customers' IT maturity and skills. One size does not fit all, and the diversity of utility types, goals and the characteristics of their end customer types requires customized approaches utilizing standard components. In many instances, vendors should expect to lead their customers to the right path, including long-term strategy planning and multi-year technology implementation roadmaps.

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