If You’re Looking for a New Retail Energy Billing System – Consider Getting Your Own Pond

By John Bastian

So, it’s time for a new billing and CIS solution. Should you buy a commercial off-the-shelf (COTS) billing system – which might perpetuate some of the same problems you’re facing now – or build a custom solution that perfectly meets your needs? It’s a recurring question in plenty of complex, high-tech industries, and retail energy providers are no exception.

While purchasing a mature COTS system can ensure market and rate expertise, these products tend to be expensive.  And, because you don’t own the source code, you can’t customize it without significant expense. To make matters worse, if you’re “just another fish in their big pond,” customization time can be unpredictable.

The other option is to develop your own custom solution from scratch. The clear benefit is that you’ll (eventually) get a solution that perfectly meets your needs. The expense can still be prohibitive, however, and the time to market becomes significant. You can typically count on a minimum of 18 to 24 months to design, build and test a custom product, as well as another 6 to 12 months to make the product “mature” once it’s gone live.

So, what do you do? Are these your only two options. Certainly not. A third option exists, that is not often mentioned, and just might be the “best of both worlds.” But how do you put it into play?

  1. First, leverage a mature, market tested software platform with more robust capabilities than your current system. Initially, it may not have the market coverage you’re looking for. But, assuming a flexible, services-oriented architecture, you can easily extend its capabilities to meet specific market or business needs.
  2. Second, secure an implementation and development partner who has deep market expertise across all relevant ISOs, LDCs and commodities, and who can use that expertise to create the additional features you need. Larger REPs might have this capability in-house, but most will require a trusted third-party services organization.
  3. Third, be open to a new ownership model. Would you consider source code ownership for example? If so, then you can have the keys to the car AND the ability to drive it wherever you want. Further, you can achieve the same level of customization as an in-house build, but in about half the time and with a far more compelling ROI. Once the product is implemented and customized, you won’t have to rely on an outside vendor. No longer are you a fish in a bog pond, you now have your own pond!

What are some of the other benefits of this hybrid approach?

  • Control – You will have complete control over the solution design and features.
  • Ownership – With a product suite that grows along with your company, you gain the ability to control your future.
  • Proven Products – You don’t have to start from scratch. Plenty of products have been tested in the deregulated market, and many include robust features such as Prepay and Postpay Billing, Broker Modules, Mobile Apps, Web Portals, Enrollment Portals and Payment products.
  • Customization – Begin with proven products as your baseline, and then enhance them over time to suit your changing needs.
  • ROI – You can realize a significant reduction in ongoing “vendor-related” operations cost.
  • Quickly React to Changing Markets – A hybrid approach allows you to work with a flexible, scalable technology that can be customized on the fly – and at your schedule, not the vendor’s.

John Bastian is CEO of SmartGridCIS