A STAR is Born: UtiliPoint's Vendor Evaluation and Analysis

Houston, May 01 2008

Capital investments in technology and technology services are some of the most important kinds of investments utilities will make.

To find the right solution, utilities and energy companies need a source of reliable and consistent data—information that facilitates the comparison of one technology or service package with another in order to identify the differences that matter most to them. Moreover, since most utilities choose a core technology or solution only once or twice in a generation, there is not much opportunity to keep apace of ongoing technology advancement. Instead, utilities and energy companies often need accurate and detailed insight about technology purchases in a context that is immediately relevant and applicable.

UtiliPoint STAR is the evolution in technology and service analysis in the energy and utility industry. For the past four years, UtiliPoint's Technology Vendor Analysis Matrix (TVAM) has been the preeminent tool for the Customer Information System (CIS) and Meter-to-Cash (M-to-C) Business Process Outsourcing (BPO) pre-selection. UtiliPoint's TVAM has helped many utilities accelerate technology and business decision making and dozens more gain critical insight into the utility customer service marketplace.

Continuing the TVAM legacy with STAR, UtiliPoint is once again seeking to raise the bar on market intelligence and the discussion about critical services and technologies driving the industry. STAR analysis is a refinement of the core TVAM method, - broadened to take into account ever-changing technology, and the dynamic improvement in the delivery of professional services to utilities. Like its predecessor, UtiliPoint's STARSM analysis and evaluation is a true evolution in the marketplace informing and guiding the crucible decisions of the industry now and in the future.

STAR Insight
At the upcoming CS Week Conference in San Antonio, Texas, UtiliPoint will be speaking about our STAR evaluation of the utility Customer Information System (CIS) market. Our STAR research shows that the CIS market is undergoing rapid change. During the past two years, virtually every vendor and service provider has had an equity impact, be that an acquisition, a sale, a merger, or otherwise. This change has introduced uncertainty in the market for the buyer. Hence, STAR places a stronger emphasis on financial health. While not the only criteria when determining the future of the vendor or service provider, financial health can add an aspect to the buying decision that can be a valuable criteria in the long-term health of the company.

Hand-in-hand with the financial health of a technology provider is the strategic plan of the company. If the service provider has financial health but is not in tune with the future of the utility and energy industry and its client's needs, then it will struggle to win business while the competition passes it by. STAR evaluation shows that having a dedicated focus on the utility and energy industries with an associated strategic plan and the ability to execute that plan will be major drivers for technology vendor success.

Many CIS providers in the industry today have some level of market share in the utility sector. A larger market share should equate to better knowledge of the industry and should lead to better strategic plans. UtiliPoint has found, however, that market share alone does not necessarily mean a better strategic plan. Many CIS vendors have at one point or another gained "momentum" and signed many customers. For some, that period of momentum resulted in a better solution for the customer. For others, it resulted in issues, be it integration, go-live, or functionality addressability after the sale. UtiliPoint STAR evaluation of market share and momentum analyzes whether the momentum is creating value for buyers or issues for buyers.

In recent years, utilities selecting a CIS have complained to UtiliPoint that much effort is being put into a features and functions check-list. As a result is many providers in the market present only those features and functions requested of the buyer. Hence, in STAR, UtiliPoint eschews the use of standard functionality checklist and emphasizes new functionality being requested of utilities and energy companies. Integration has also been criticized in the CIS market as the key remaining element of CIS implementation that has not improved over the years. While CIS vendors and service providers have made great strides in configurability and reducing costs, integration remains as a high-priced deal-killer that costs the same as it did 10-20 years ago. The promise of SOA and "plug-and-play" technologies have not yet materialized. STAR evaluation shows that integration will continue be a major factor in CIS deployment not only at implementation, but also the ease of integrating new functionality as the market progresses.

STAR in the Constellation of UtiliPoint Services
UtiliPoint has made a commitment to our clients and to the utility industry to provide the most objective and timely information, insight, and advice available. We developed and use STAR as a component of our value-added service to our clients in order to help them make critical business decisions in a timely manner and with the best insight available. In addition to client service we use STAR to educate and empower both service suppliers and utilities with insight and perspective not elsewhere available with the goal improving the efficiency and productivity of our industry.

UtiliPoint International, Inc. is unique among utility and energy industry consultancies in the fact that we draw upon both our expertise and primary research to assist clients in making decisions about what technologies to evaluate, purchase, and deploy. In today's business environment, utilities are compelled by owners, regulators and ratepayers to demonstrate effective management practices and cost-efficient, quality operations. STARSM analysis and evaluation facilitates utility assessment of technology and professional services they may wish to contract or purchase.

Ends --

By Ethan L. Cohen, Senior Director, Utility and Energy Technology