How to evolve smart grid roll-outs into a smart customer experience

How to evolve smart grid roll-outs into a
smart customer experience
Why centralized pricing and billing, dynamic customer communication
and multichannel payment
’ create true business value for smart metering without revamping a utility’s CIS infrastructure.
The utility industry is on the verge of technological change with
new technologies, new domains and new business models being
introduced around smart metering and smart grid roll-outs. In
addition regulatory, environmental and commercial factors have
created a significant shift in focus in a once-monopolistic utility industry. Market deregulation and growing competition is one of the
challenging factors for utilities that drive the adoption towards
a more transparent and customer-centric approach to improve
customer intimacy.
Author: Olaf Vieselmann
The introduction of smart metering and smar
grid technology is one of the most disruptive
changes to the utility industry. Utilities need to
think beyond just providing energy to their customers. New technologies and infrastructures
create opportunities to offer new products that
change the way customers use services and
interact with their utility companies. Providing
tangible, visible, and direct benefits to consumers is key to exploiting new areas of business
and operational efficiencies that are dependent
upon customer intimacy.
Contrary to the past approach of “siloed” software solutions and applications, utilities today
are starting to look for future-proof best of
breed solutions to solve pain points with their
smart grid implementations and prepare for future areas of business, e.g. in Smart Homes,
e-Mobility and renewables.
Limiting the risk – Learning from other industries
Scalability is imperative in a growing ecosystem
that is strongly influenced by today’s digital economy. Telecom is a perfect example of how an
industry can grow from a few thousands of early adapting customers to multi millions of end
customers demanding everything to be on their
fingertips when they need it. So leveraging the
experiences of other verticals is a must to prepare for growing and changing business needs.
This is even more important as customers today expect ways to manage things similarly across different areas of their digital life. Looking
at the past decades in telecommunication, the
challenges to this industry were quite similar to
what utilities are facing today.
Engage with customers in
Utilize the smart grid data
Create flexible tariffs and
Prepaid and hybrid offers –
new segments
Transparency and enhanced
Managing the 3G / LTE
data networks
Competition on offers and
Prepaid offers with
centralized charging
Different industries –
similar opportunities
The move in telecom to software defined networks using virtualization technologies and the
cloud is a great example of how an industry develops and increases efficiency by moving into
an IT based future. It is a tremendous shift in
paradigm for utilities to grow into a more IT
driven architecture that consolidates and virtualizes systems and infrastructure but also
a must to find fast, flexible, and efficient ways
of addressing continuous changing business
smart metering
budget control
customer engagement
smart payment
revenue assurance
smart grid
new tariffs
What does this mean for the utilities billing environment? Imagine every mobile user would
have his own decentralized rating and billing on
his mobile especially when running on prepaid the telecommunication business would never
be able to grow by multi millions of subscribers
each year following this approach. Fraud rates
would skyrocket if all charging related parameters were “on device”.
So the question is if a highly distributed AMI
infrastructure with decentralized meter based
intelligence is a future proof approach to cope
with growing complexity in a smart grid.
Lean smart metering with centralized pricing and billing
Upgrading or replacing existing customer information systems are long term investments
and business critical projects incorporating
technological and financial risks. Industries
such as telecommunication have proven successfully that a “best of breed” strategy can
help to limit the risks and efforts.
Implementing a smart rating and flexible pricing engine, closely integrated with customer
communication channels, helps to boost the
business agility without renewing the whole
billing and CIS landscape. There is no need to
decide on hardware technology today that will
sit on customer side for decades. Managing all
intelligence centrally means to keep one system up to date instead of thousands or millions
of meters installed on site and being delivered
by various vendors.
Real-time pricing
Dynamic rate plans
Thin Smart Meters
New tariffs
Vendor agnostic
Bundles and promotions
Prepaid, Postpaid, Hybrid
Real-time notifications
Adding a flexible vending and payment infrastructure closes the loop at the important sales touch points. Especially for prepaid scenarios, add on solutions require only a limited
number of interfaces and interaction points to
the existing infrastructure and keep event driven processing separated from the established
billing and backend environment. A deeper integration of systems remains an optional future
Business validation is key! Utility companies
need to validate if new concepts of e.g. energy
pricing will meet customer needs and expectations before rolling out meters and systems
at large scale. Pilots and field tests need to
prove the business cases, check technological
aspects and help to evaluate compliance to legal
and regulatory conditions. Nevertheless, pilotrelated costs and efforts easily exceed budgets
and available resources. That’s why innovative
and efficient architectures need to be considered to streamline efforts and keep a pilot set up
lean. Hosting of systems and managed services
are established IT solutions to reduce the total
cost of ownership. Following an IT based centralized architecture will prepare utility companies
for the efficient use of this technology in pilots
and start-up phases as well as in a full scale system operation.
Adding billing capabilities to new business models
The utility industry is traditionally a hardware
driven business characterized by long investment cycles for generation sites and network
infrastructure. Well proven technology decisions have to limit the risk that comes with huge
investments in these areas. Future proof architectures and systems are an imperative to
this. In a centralized system design for smart
metering using a thin meter infrastructure, the
business model is no longer a question of hardware and meters. Launching a prepaid energy
offering, for example, is simply a new type of
payment model the customer can select. No
need to send out workforce to change meters,
no additional hardware investment – just assigning a new tariff in the billing and the customer migration is done. It becomes a question
of minutes in a centralized billing infrastructure
that is designed around an IT based pricing and
“Prepaid becomes a
true payment option
with budget control
instead of a penalty for
bad dept customers.
A new level of flexibility can be achieved when
keeping tariffs, configurations and pricing centralized and close to the IT back office. Customers expect changes to their products and
services to be applied instantly and maybe with
the option to go back after a period of trial.
Being able to offer this kind of customer orientation fuels acceptance of new offers and
cross-promotions of add-on services. Selecting
the customer, changing his payment settings
to prepaid – “save and close” - and a former
postpaid customer becomes prepaid without
touching the field.
Next to the customer experience side of flexible
tariffs, this opens up new options for utilities to
introduce an enhanced revenue collection and
to reduce bad debt. All tariffs available for postpaid customers can be continued in a prepaid
service. This is an additional and essential element in changing the market perception of prepaid energy. Prepaid becomes a true payment
option with budget control instead of a penalty
for bad debt customers. All this based on a lean
thin meter infrastructure that limits investment
and improves the return on invest.
Engaging with customers in time
Utilities are urgently looking for a valid business case when rolling out the smart grid and
AMI infrastructure. Often pushed by regulatory
bodies, smart metering is rolled out and the
related infrastructure is build up. In the end, interval metering data is aggregated and shown
once a month to end customers.
The true potential an intelligent smart grid can
deliver goes far beyond this. Closing the loop to
customers delivers the ground for budget control, more dynamic tariffs, and new services,
bundles and promotions. Showing customers
actual and timely data is a must to get connected. To create positive energy experience consumption data and cost transparency must be
linked to the customer behavior. Being instantly informed via mobile devices, a web portal or
a home display is what attracts people’s attention.
The customer’s interest will decrease when
tons of kWh meter reads are shown in portals, detailed charts are created without putting this into context and making it meaningful
to the customer:
It is about talking the customers’ language!
The question is how utility companies can
transform their current technology driven organization into a customer centric business
that is able to meet customers’ expectations.
Customers need to see the benefits. But is a
small statistic on my bill which has been sent
to me weeks after the usage took place a real
benefit? Customers need relevant and understandable information instantly delivered that
gives them the opportunity to react. Energy
is not as appealing as Facebook or Twitter. In
order to target customers, instant information enhanced by recommendations and predictions are essential.
On top of this, engagement with customers is
not a one way street. It is not only about informing, providing information or notifications.
A two way communication with customers is
giving them the possibility to interact. React to
changing tariffs, special promotions or low balance warnings in case they are in a prepaid
model. It is about the possibility of opting in,
choosing a tariff or refilling a prepaid account
– it is about selling and vending.
Full support of vending via several channels is
a must for closing the loop of billing, engagement and the ability to interact successfully.
Benefits of an advanced utility billing
Tariff flexibility – prepaid, postpaid and dynamic tariff plans
Utilizing multichannel payment – making prepaid energy a real alternative
Customer interaction – based on timely, relevant and context related information
Cost Savings
Utilize the smart grid data with instant event processing
Utilizing smart metering infrastructure and create added value
Future proof
Customer engagement – multichannel and on time
Evolve from AMI to smart customer engagement
Close loop to create an end to end application view – without touching the CIS
Less risk
Centralized architectures – utilize the installed meter base
Deploying an adjunct solution – no need to replace CIS
Talking the customers’ language – cost, days, benefits and added value
For 20+ years, Orga Systems’ portfolio of real time products and consulting services has been designed for living
in a connected world. Scalable architecture, outstanding
performance, lowest rating latency and consequent customer-centricity ensure reliable access to any kind of cross
vertical NG services for 400+M subscribers in Africa,
Americas, Asia and Europe. Worldwide 40+ telecommunications providers, energy suppliers, car manufacturers,
automotive and logistics companies rely on Orga Systems
and achieve reduced OPEX, real time-to-market, shorttermed ROI as well as beneficial access to new value chains
and profitable M2M revenue streams.
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