November, 2010

UtiliPoint recently completed analysis of the state of the market for Customer Information and Billing Systems (CIS). This is our eighth annual survey and analysis and we found some interesting trends developing this year. The state of the economy still has an effect on the marketplace, with only 11.5 percent of survey respondents indicating they are in the market for a new CIS. Secondly, smart meter deployment, jump-started by stimulus spending may increase CIS sales or at least sales of CIS add-ons over the next two-to-five years.

In the spring and summer of 2010, UtiliPoint made over 2,000 calls that resulted in over 200 completed surveys. Managers or directors of billing or customer service at North American utilities were the target audience of the survey. UtiliPoint surveyed utilities of all sizes (Figure 1) and types including co-operative utilities, competitive retailers, investor-owned utilities, municipal utilities, Canadian Crown corporations, and others.

CIS remains a highly fragmented marketplace. The largest market segment continues to be the category “other” (27 percent market share) followed by legacy/in-house systems (22 percent). Despite this, a handful of vendors (added together) have a market share equivalent to legacy/in-house systems.

There appeared to be a small increase in the number of installations in 2009, possibly due to purchasing decisions made before the effects of the recession were felt. This was true across all sizes of utilities. However, the survey results indicate few installations in 2010 due to fewer purchasing decisions made in 2009.

So, what are the determining factors for purchasing a new CIS? Although the survey demonstrated that no single factor stands out, functionality and ease of use were the two most important purchase determination factors, followed by price. Co-operatives seem to be the happiest with their current systems, with 43 percent indicating satisfaction with their current solution. This market segment is also interesting because most respondents do not have legacy systems.

As part of the survey, UtiliPoint examined utilities' attitudes towards outsourcing. We found that utilities believe that two primary opportunities exist to reduce costs through operational outsourcing of meter reading and billing & payments. This should not be surprising given that smart grid deployments across the globe have accelerated since our last report in 2009. Corresponding to operational outsourcing preferences, two functions are primarily outsourced: electronic bill presentment & payment (EBPP) and bill printing.

In summary, the CIS replacement market opportunity has declined since the high growth rate last experienced in the period 1995-2005. This appears primarily due to the standstill of deregulation and the economic recession. The industry may, however, have two positive factors to look forward to over the next year. One is that the recession appears to be ending and coupled with a return to potential growth, utilities may begin to loosen the capital purse strings. Secondly, smart meter deployment, jump-started by stimulus spending may increase CIS sales or at least sales of CIS add-ons over the next two-to-five years.

Our ninth annual survey will be conducted again in the spring and summer of 2011 to see how the industry reacts to these market forces. If you are interested in learning more about the 2010 results please contact UtiliPoint at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

By Mark Burlingame, Senior Director