One of the main challenges energy companies face is monetising smart meter investments by capitalising on the business potential of a smart energy user. Making the billing processes in line with smart meter functionalities to raise customer satisfaction level will be a first step to accelerate return on investments. As Europe prepares to meet smart meter deployment timelines in coming years, Frost & Sullivan expects energy utilities accelerated interest in information and communication technologies (ICT) to enable data management and analytics, cloud computing, billing, rating and other customer facing systems, and cyber security solutions.
New analysis from Frost & Sullivan (ipcommunications.frost.com), Billing Challenges of Smart Metering, analyses common billing challenges and highlights how ICT overcomes these obstacles to accelerate return on smart meter investments. The greatest smart metering challenges faced by utility companies include managing the high investment, coping with the data explosion, developing a vision for how to monetise the high investment, transforming internal workflows and shifting towards more customer-centric approach.
"In addition to lacking a clear vision of monetising their smart meter investments, most energy companies also work within an unfavourable business framework focusing on cost-effectiveness instead of energy efficiency, and unattractive division of costs and benefits between them and end users," says Frost & Sullivan Industry Analyst Dorota Oviedo. "The common view around monetisation of smart meter investments is wrapped around the vision of a smart energy society. Energy companies, through better understanding of customers’ consumption and potential supply of energy, can provide greater customer centric services and improved customer care."
Monetising the smart meter investments is about introducing new services to customers, intrinsically linked to new tariffs. Utility companies must apply granular tariffs to newly defined customer segments. A billing framework built around a centralised rating engine enables personalised tariffs.
Energy companies may need to invest in upgrading their legacy billing systems in order to reap the maximum benefits from their smart metering investment. Real-time rating is essential to dynamic network management and revenue assurance up and downstream. Back-end solutions must be future-proof, scalable and reliable, because the legal requirements are prone to changing.
Further, utilities have to cooperate with authorities and lobby on regulatory changes to accelerate required business model changes. They should design tailored deployment strategies based on the balance between costs and benefits. Organisation-wide priorities and strategies must also be defined to smoothly navigate the complexities of smart grid implementation.
"Utilities must develop plans to engage consumers in a discussion on mutual benefits of smart grid and energy conservation," highlights Oviedo. "High quality, proactive customer service, education, and communication with consumers are crucial to successful smart metering rollouts."
If you are interested in more information about this study, please send an email with your contact details to Joanna Lewandowska, Corporate Communications, at joanna.lewandowska[.]frost.com.
Billing Challenges of Smart Metering (9845-63) is a part of the Market Insights - ICT subscription, which also includes research such as Energy/Utilities-ICT Market Model, Service: The Changing Regulatory Landscape: Impact on ICT Opportunities in Utilities, Service: ICT Enablers for Smart Energy Demand, Critical Infrastructure Protection - Solutions for Oil & Gas, Electricity and Water, among others. These Market Insights are part of Frost & Sullivan Growth Partnership Service.
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