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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "SCIENTECH IssueAlert" <IssueAlert@scientech.com< X-To: X-cc: X-bcc: X-Folder: \Mark_Haedicke_Jun2001\Notes Folders\Notes inbox X-Origin: Haedicke-M X-FileName: mhaedic.nsf Today's IssueAlert Sponsors: [IMAGE] Ensure your company's success even in the uncertainty of today's competitive energy markets. Visit Itron at the CIS Conference and learn how to choose the best tools for complex billing and rate management; data management and exchange; and Internet based data presentment and publishing. Itron solutions are successfully operating direct access markets throughout North America. To learn more, visit us at www.itron.com [IMAGE] Are you looking to invest in, attract investors for, provide services to or understand the business and technology dynamics of the hottest companies emerging in the energy sector? Attend the Energy Venture Fair, June 25 & 26, 2001, in Boston, MA and hear CEOs from 75 hot energy companies present their business plans. Complete event description available at www.energyventurefair.com or call Nannette Mooney at (818) 888-4445, ext. 11. [IMAGE] "Global Power & Western U.S. Coal: Domino Factors at Play in Today's Energy Markets" is the theme of the 2001 Spring Pacific Coal Forum (Coal Forum'2001) to be hosted by the Western Coal Council, June 4-6, 2001 in Park City, Utah. Keynote Speakers include: Honorable Mike Leavitt, Governor, State of Utah; Hitoshi Tagawa, Tokyo Electric Power Company; Eng. Jesus Buentello, Comision Federal de Electricidad; Malcolm Thomas, Kennecott Energy Company; Manfred Raschke, International Strategic Information Services (ISIS). Contact Janet Gellici at (303) 431-1456 or info@westcoal.org www.westerncoalcouncil.org. [IMAGE] [IMAGE] May 16, 2001 25th Annual CIS Conference Begins in Albuquerque; Complex IT Issues to Be Addressed By Will McNamara Director, Electric Industry Analysis [IMAGE]The 25th annual CIS Conference began today in Albuquerque, N.M. For the next three days, I will be attending sessions and workshops at the conference, interviewing key leaders of billing software and customer care management companies, and gathering information about the new trends in technology and IT systems that changes in the energy industry are demanding. Through the conference, I will write each morning's IssueAlert from the conference floor, so that if you are not physically at the conference, you can still participate through "virtual attendance." I am particularly looking forward to the keynote presentation scheduled to be delivered on May 17 by former President George Bush. Coincidentally, the former president will speak on the same day that his son, current President George W. Bush, unveils his long-awaited energy plan. This should make for some interesting dialogue, which I will be sure to pass along. Some of you who are not directly involved in CIS (customer information systems) may question the importance of this rapidly changing part of the energy industry. So let me provide a brief overview of how CIS serves as the foundation for much of "next-generation" business transactions in the evolving energy industry, which also will indicate the kinds of issues that will be addressed at this week's conference. Although customer care, meter reading and billing have always been fundamental parts of a utility's operation, deregulation has drastically changed the rules of the game. First, we have witnessed an influx of new energy providers (which has raised the competitive bar considerably) and companies that seek to manage what was once under the exclusive domain of the regulated utility (meter reading, billing systems, remittance processing, etc.). In addition, the business model of the traditional utility has changed dramatically over the last 10 years or so. Many utilities have become more horizontally integrated, meaning that they have established multiple entities to handle the unbundled services that they provide in new markets. Not surprisingly, the information systems that were employed under a regulated model are now rather insufficient to accommodate the needs of a deregulated market. Yet, at the same time, utilities often do not know how to replace their existing data systems (or have the time to do so). Nevertheless, an essential element to the utility's or energy company's growth is a comprehensive billing software and customer management system. Customers often demand online energy usage and billing data that is available on a 24/7 basis. In addition, deregulation has allowed utilities and energy companies that previously operated in a narrow service territory to expand into new regions. As these utilities and companies enter different markets, they seek to eliminate various automated and manual processes required by vertically integrated systems that were required by legacy systems. This can result in a real cost savings for an energy company as it can eliminate back office functions such as taking calls for final reads and address changes, all of which can be handled directly by the customer through online software that is available from many competing companies. Much of the software that is now available is capable of handling many functions required by retailers, from enrollment and registration to billing to settlement and load forecasting. The challenges that exist within the CIS space are many. An energy company basically has two options with regard to billing / customer care / customer relationship management (CRM). The first option is for the energy company to purchase the billing software directly from a software provider and manage its own billing needs. The second option is to completely outsource the entire billing / customer care services to a company that will manage the entire service. I have seen some reports indicating that up to 80 percent of deployments of systems for customer relationship management fail. Thus, any decision that an energy company makes with regard to its CIS network constitutes a critical (and expensive) strategic step. In addition, the capability of an outsourced billing provider to handle the complex billing needs of a utility is still a concern. Enlogix is the largest application service provider with over 3 million end customers in production today. Orcom is the second largest, with over 1 million "live" customers. Peace Software and IBM Global Solutions just announced a deal to provide full customer management services for Xcel Energy's 3.5 million customers, which represents the largest contract of its kind to date. As the market for outsourced customer management in the utility industry is still rather nascent, there are lingering concerns about how effectively utility customers will be migrated to a new software system. Further, the variances between commercial and industrial (C&I) and residential billing are also a concern. Therefore, these two classes of customers typically are billed by different systems. There are other challenges that the CIS industry faces, including: California and other states are causing legislative and regulatory bodies to reconsider deregulation, which is providing uncertainty around the requirements and timing for such systems. Multi-jurisdictional utilities are being faced with decisions on how to provide customer care that is regulated (and rate-recoverable) in one state, while being competitive (and not recoverable) in another state. Public utility commissions are imposing code-of-conduct rules that disallow the sharing of information across the various parts of the utility business (in this case, wires and retail). This causes further complexity on how to bill these various customers. The new deregulated world requires new functionality such as load profiling at the residential level, load forecasting, wholesale-to-retail contracting, and settlements that did not exist in the regulated world. The CIS conference will offer the venue for stakeholders in this market to exchange information and engage in a dialogue on these and other challenges. Various workshops will take place, focusing on call center operations, outsourcing versus Web-based CIS systems, short- and long-term billing strategies, interfacing CRM and CIS, meter reading advances, and a technology forecast for the industry. In addition, more than 100 vendors are expected to provide overviews of their service offerings at the conference. The billing / customer care market is arguably one of the most competitive and complex businesses to have emerged from electric deregulation. Yet, it is certain that this market will only become more complex and competitive as deregulation continues to unfold in the United States and internationally. Hopefully, this week's CIS conference will provide valuable insights into the direction in which this fundamental part of the energy industry is headed. TOMORROW: Overview of former President Bush's Keynote Address at the CIS conference (and its potential correlation with President George W. Bush's expected energy plan). An archive list of previous IssueAlerts is available at www.scientech.com [IMAGE] The most comprehensive, up-to-date map of the North American Power System by RDI/FT Energy is now available from SCIENTECH. Reach thousands of utility analysts and decision makers every day. Your company can schedule a sponsorship of IssueAlert by contacting Nancy Spring via e-mail or calling (505)244-7613. Advertising opportunities are also available on our website. SCIENTECH is pleased to provide you with your free, daily IssueAlert. Let us know if we can help you with in-depth analyses or any other SCIENTECH information products. If you would like to refer a colleague to receive our free, daily IssueAlerts, please reply to this email and include their full name and email address or register directly on our site. If you no longer wish to receive this daily email, send a message to IssueAlert, and include the word "delete" in the subject line. SCIENTECH's IssueAlerts(SM) are compiled based on the independent analysis of SCIENTECH consultants. The opinions expressed in SCIENTECH's IssueAlerts are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. SCIENTECH's sole purpose in publishing its IssueAlerts is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues. Copyright 2001. SCIENTECH, Inc. All rights reserved.
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