The race for energy innovation
The New Zealand energy industry has for many years retained its reputation as a leading innovator on the global energy stage. In fact, we had one of the first competitive energy markets in the world. New energy retailers fought for customers, while lines companies provided integral energy distribution networks and services without a direct relationship with customers on their regional networks. It was now all about the network assets rather than the customer.Now some 20 years on, lines companies have evolved. You could say they’ve come full circle. Lines companies are reshaping and reinventing themselves to deliver new Smart Grid technologies designed to keep the lights on in our homes and encourage us to use electricity responsibly. Some are working towards selling new products and services to customers, such as broadband, while also offering incentives to customers to conserve energy during periods of high demand. The necessity of CRM applications within lines companies has quickly become a reality.To most lines companies, Asset Management and Geospatial Information Systems have taken precedence over CRM systems and while this is still probably the case, CRM has certainly closed the gap. Lines companies are now looking to CRM systems to support a new level of engagement with customers, to become actively involved in the customer’s energy experience, a role traditionally undertaken by energy retailers using large CRM applications.Understanding customer behaviours and engaging with them using a CRM application provides immediate benefits to lines companies – just ask The Lines Company in Te Kuiti, recently awarded the Lines Company of the Year at the 2010 Deloitte energy awards. Using an integrated CRM system, they have established a direct relationship with customers to support demand-based pricing for lines charges, targeting owners of properties most responsible for increasing peak period demand on its network. The payback, a tidy $8-15 million over 15 years, is enough, they say, to fund two years of network renewal work.Lines companies have also recognised that CRM applications can be used to significantly improve service levels, with innovative customer communications such as outage notifications automated via the appropriate customer specified channel, including SMS, voicemail, email and even Social Media. And in conjunction with the current government broadband initiative and smart metering deployments nationwide, such enterprise CRM tools are likely to facilitate the introduction of a variety of new products and services from lines companies – not limited to tailored, dynamic pricing signals for different customer segments. Imagine getting a text message offering you savings for conserving energy in your home during peak times!Are the CIOs of our lines companies fearful of deploying CRM? If they are, they’re not showing any signs of it. A number of the larger lines companies have used CRM applications for years as the foundation of their customer communications programmes. A growing number of CIOs are now recognising the added value CRM brings to the organisation that relies on understanding the behaviours of its customers – especially as they tackle smart metering technologies that depend on customer education and active communication to ensure acceptance and a suitable return on investment.For those CIOs of lines companies that are not yet on board with CRM, our best advice is to take the time to learn from other utilities that have faced similar business and technology challenges. Take the time to pick your vendor, get referrals and references, and ensure that your shortlisted vendors know your business and industry as well as they know CRM systems. Six strategies for CRM project success While the benefits of CRM project success can be significant, the costs of failure for energy utilities in particular can also be significant. You only have to Google ‘CRM failures’ to see where companies have hit the front pages for all the wrong reasons. Fearful of hitting the front page or not, there are some key project lessons a CIO or management team should consider when deploying a major customer facing solution such as CRM.
- Simplify your business. Deploying CRM is not a just a software implementation, it is a business transformation process. Be clear on your CRM objectives and take the opportunity to simplify your utility business before innovating.
- Appoint a CRM Project Champion. Find a passionate visionary with the ability to sustain support from senior management and involve them in the project where necessary.
- Build a strong CRM project team and empower them. Allocate highly competent and motivated individuals from IT and relevant business functions. CRM transformation is not solely an IT initiative. Choose your project manager with care and empower your team with the tools and resources to make decisions quickly and execute accordingly.
- Promote a culture of partnership with your CRM vendor. Vendor experience and knowledge of your business and industry are critical. Think of the vendor as a partner committed to the project as much as you are. Neither party can deliver on their own.
- Do the hard stuff first. Don’t leave data conversion and interface configurations towards the end of the CRM project. Evaluate requirements and begin trial data conversions from the outset to ensure the go-live is a non-event.
- Invest in quality training. Lack of investment in training slows the uptake and acceptance of the new CRM system and business processes. Don’t just train users to navigate the CRM system, consider the business processes behind it. Always include a lead trainer in the transformation project
