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OVERVIEW OF CUSTOMER BILL DELIVERY SOLUTIONS AT 2005 CIS CONFERENCE
(2005-05-20)
This is my annual update on the state of Customer Bill Delivery Solutions at the CIS Conference. This was the 29th year that the CIS Conference was held. Over 1,200 attendees enjoyed the mid-May “warm” weather of Phoenix Arizona. CIS is the acronym for Customer Information System, which is the mission critical system for handling customer care and billing within the electric, gas, and water/wastewater utilities. Following the theme of the conference “Expanding Excellence” the attendees were able to increase their understanding of solutions and options available to help them shape the future of CIS within their respective companies.
Nearly one third of the 104 companies exhibiting at this year’s conference were focused on helping utility companies address their customer bill delivery requirements. These companies’ products and services:
- covered the various electronic bill delivery and payment collection solutions that encompass electronic presentment & automated payment,
- serviced both national and regional markets for bill print outsourcing solutions, or
- were leading providers of document composition/bill formatting solutions.
As utility companies continue to search for strategies that help them reduce their operating costs while increasing their customer service levels, continued evaluation of their customer bill delivery solutions cannot be overlooked.
Customer bill delivery is a critical component in a utility company’s customer care strategy and a significant customer touch point in the collection of revenue as part of the “meter to cash” processing cycle. The sessions at the CIS Conference provided thoughtful information on many areas in the “meter to cash” processing cycle for utility companies to consider as they continue to develop and enhance their customer care strategies.
Electronic Presentment & Automated Payments
Electronic Presentment and Automated Payments (EP&AP) represents the overall strategy of using the various bill delivery and payment collection solutions that are now available via the Internet. The various solutions that I include in EP&AP are:
- Electronic Bill Presentment & Payment (EBPP) – This solution is the process in which the customer enrolls in the EBPP service offered by their utility company. The Biller (utility company) will send an e-mail notification to inform the customer their current bill is ready to view and pay. The customer then will access the utility company’s website, probably through a hotlink in the e-mail, sign on, and view their bill. The customer can pay the bill at that time, schedule a payment date, or re-access the utility company’s website at a later time to pay their bill.
- Payment Only – This solution includes electronic payments originated from the utility company’s website or payments sent from the numerous Consumer Service Providers (CSPs). The CSPs are the various portals that offer their customers bill payment options within their Internet service offerings. Included in this category are payments originated from banks or financial institutions that are providing bill payment services. The customer is required to identify the vendors they want to pay, enter amounts to be paid, and the due date or payment date for these transactions.
- Bills Distributed in a Secure E-mail Message – This solution is sometimes referred to as “push e-mails.” Under this option, after the customer enrolls in this service offered by their utility company, bills are delivered via a secure e-mail from the utility company to their customers. The customer may make their payment by utilizing the secure payment function provided within the e-mail.
- Payment Option within Interactive Voice Response (IVR) or Speech Recognition Systems – This solution includes payments originated as the result of the customer calling the utility company and selecting an option provided by the utility company’s IVR or Speech Recognition System. IVR and Speech Recognition Systems are typically thought of as being solutions within the Customer Self Care strategy of a utility company. However, in my opinion, they should also be included under EP&AP since they deliver the technology to provide the customer with additional choices for making their payments.
Several educational sessions were presented at this conference that addressed EP&AP topics covering (1) Developing a Business Case for Offering EBPP Services, (2) Promoting Customer Adoption of Online Bill Pay…As You Promote Your Community, and (3) Bill Payment Options: The Use of Technology to Solve Customer Service Problems at a Lower Cost. In addition, there were educational sessions on Improving Customer Service Through Speech Enabled Self-Service Call Center Automation and What’s New in Web Self Service.
The interest in EP&AP strategies is confirmed by recently completed survey that was conducted by UtiliPoint® International, Inc. This survey is referred to as the North American Utility Customer Care Analysis of 2005. In discussions with Christopher Perdue, Senior Director, Market Research at UtiliPoint, I learned that 47% of North American utilities currently offer EBPP, which is up from 34% identified in UtiliPoint’s 2004 Survey. However, Christopher further explained when he looks at segments such as customers served; of the utilities that serve over 1 million customers, over 94% currently offer EBPP as an option for their customers.
One of the biggest challenges the utility companies face is the adoption of EP&AP options. This is also evident in the UtiliPoint’s Survey. Mr. Perdue explained that the survey showed of the utilities that have implemented EBPP, over 50% of the companies indicated that less than 4% of their eligible customers were utilizing this option. However, nearly 20% of the companies indicated 4 to 6% adoption by their customers, just over 15% of the companies indicated 6 to 10% adoption by their customers, and 12% of the companies indicated they had over 10% adoption by their customers of their EBPP offering. In my opinion, utilities will need to continue to build on their strategy of offering more than one, if not most of the solutions I identified earlier in this article to give their customers EP&AP choices. Having a “one size fits all” strategy and only offering limited EP&AP options I expect will hinder the customer’s adoption of EP&AP.
EP&AP solutions will continue to be an important element within the utility companies’ strategy to better serve their customers.
What I found interesting in the General Sessions at the conference presented by Lynne Lancaster of BridgeWorks on the topic of Bridging The Talent Gap In A Multigenerational World were the statistics she provided related to Who are the Generations? Lynne defined the Generations as:
- Traditionalists – born prior to 1946 with a population of 75 million,
- Baby Boomers – born between 1946 and 1964 with a population of 80 million,
- Generation Xers – born between 1965 and 1981 with a population of 46 million,
- Millennials – born between 1982 and 2000 with a population of 76 million.
As I listened to Lynne’s enlightening and upbeat presentation where she was exploring the challenges of communicating between the generations within today’s corporations, my consultant mind could not help but lead me to think of the “Generations” impact on the business cases for the EP&AP solutions.
The customers most likely to use the Internet tend to be more in the Generation Xers and Millennials categories. Especially the Millennials that are just starting to come of age in using utility provided services for their apartments, condos, and houses. This generation of 76 million people will drive the adoption of EP&AP options for the future. I am confident in this projection as I have experienced with my own two children that are in college and fall into the Millennials category. Both use the Internet to monitor and pay their bills when the option is available to them and they write very few paper checks during the year.
This projected growth in adoption provides a great upside to any business case that is addressing EP&AP strategies. However, I suggest that utility companies should continue to be realistically prudent in their projections on the adoption rate for their EP&AP offerings for the near term.
Bill Print Outsourcing
It seems whenever the word “outsourcing” is mentioned related to any of the elements in the “meter to cash” processing cycle, it is usually followed by the question -- is this element core to the utility company? I expect that you will get equally split answers between “yes” and “no” as you talk with people across the utility industry about this topic.
Based on the consulting work I have been engaged in over the last couple of years with several utility companies when they evaluated outsourcing, and conversations I have had with many utility companies on this subject, I find a nearly equal mix between the utility companies that stay in-house and others that outsource their bill printing. This mix is further confirmed by UtiliPoint International’s North American Utility Customer Care Analysis of 2005. Christopher Perdue stated that the respondents to this survey indicated that 52% are outsourcing or plan to outsource their bill printing. This is up from 28% that was recorded for the same question in 2004’s survey. Interestingly, Christopher pointed out that the results from the survey varied slightly across the segments that were based on the number of customers a utility company serves and still supported the nearly equal mix of utility companies that are or plan to outsource their bill printing verses the plan to continue to handle this processing in-house.
In my opinion this is an area that is a candidate to be evaluated every three to four years. While there is not a simple quick answer to determine if a utility company should outsource or stay in-house, conducting an evaluation that considers both operational efficiencies and processing costs will position the utility company to determine what is the appropriate direction for them.
As an observation, I have had the opportunity to conduct several Best Practices Analysis for Utility Bill Printing Operations over the last year and have found the benchmark information from this study to be of significant value to the participating utility companies as they established both their short- and long-term planning.
Just as any outsourcing service requires, the utility company and their vendor need to take the time upfront to set expectations for service levels and develop communication channels that will lead to a successful processing partnership.
Document Composition/Bill Formatting
Document Composition solutions help the utility companies focus on the content of the bill verses having to be concerned with the technical requirement to print the bill. In the world of two-up and/or duplex printing, taking advantage of the document composition software facilitates both the implementation of a new billing document and the ongoing maintenance of this important customer communications tool.
Using document composition solutions allows the utility company to focus on personalizing the bill to the customer’s specific situation or data. Improving the readability of the bill and creating marketing opportunities for new or expanded services can easily be addressed resulting in increased customer satisfaction, additional revenues, and reduced operating costs for the utility company.
Since document composition solutions were first introduced to the utility industry at the 1992 CIS Conference, a vast majority of utility companies have taken advantage of this type of solution.
Whether the billing documents are composed in-house or by an outsource printing vendor, document composition solutions will provide significant value to the utility companies.
Summary
The venue for Customer Bill Delivery at the CIS Conference has grown to position this conference as an important resource for utility companies to learn more about the bill printing and Internet billing options available for their evaluation. This also is evident by the growth in attendance of the vendors that provide the various customer bill delivery solutions to help the utility companies handle this critical customer communication and revenue generation process.
Electronic Presentment and Automated Payment solutions have a bright future; however, the requirement to print bills will be around for many years.
As utility companies look to enhance their customer self-service options, this will be an opportune time for them to evaluate their EP&AP strategy. Having a consistent theme and intuitive easy-of-use methodology across all of the utility company’s web-based offerings will lead to greater customer satisfaction that will drive up adoption and reduced overall customer support costs. Along with this strategy will be the need to provide the customers with choices on how they can receive their information and pay their bills.
If you would like to learn more about the various Customer Bill Delivery products and solutions that were presented at the 2005 CIS Conference please visit: www.cisconference.org select Conference 29, next click on Exhibitors or contact the CIS Conference at 903-893-3214.
Looking ahead, the 2006 CIS Conference will be held from May 2 to 5 at the Gaylord Texan near DFW.TX.
Acknowledgements
I would like to thank the following individuals and companies for providing critical information and guidance for this report.
Christopher Perdue and UtiliPoint International, Inc. -- UtiliPoint® International, Inc. is a leader in providing market research, consulting, and analyst services specific to the utility and energy industry. To learn more about UtiliPoint, please visit: www.utilipoint.com or contact Christopher Perdue at 850-499-8727.
Lynne Lancaster and BridgeWorks LLC – BridgeWorks is the home of professionals dedicated to solving generational puzzles in the workplace and marketplace. To learn more about BridgeWorks, please visit: www.generations.com or call Lynne Lancaster at 888-519-1187. Lynne is the author of “When Generations Collide: Who They Are. Why They Clash. How to Solve the Generational Puzzle at Work” (HarperBusiness 2002).
About the Author
Jim Jossie is owner and principal of James J. Jossie Consulting LLC a firm that specializes in helping companies make informed decisions on their Customer Bill Delivery Strategies, namely bill printing, bill print outsourcing, and Internet billing projects. In addition, Jim has teamed with Madison Advisors to conduct a Best Practices Analysis for Utility Bill Print Operations. To learn more about the services Jim provides, please visit: www.jossieconsulting.com or contact Jim at 262-242-3190.
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