If you’ve followed Flux for a while, you’ll know we often talk about what’s happening in the energy sector as it relates to digital transformation and technology. And sometimes we reference the conversations we have with energy sellers and our technology partners.
There’s a range of organisations we are aligned with that consult, partner, and enable us as we traverse the evolving landscape of energy technology. These include Capgemini, Salesforce, Transformable, and Cloobees. Their perspectives, knowledge, and insights are incredibly valuable, so we thought we’d share some insights from these energy tech experts on the four biggest challenges energy sellers face today.
Customers are driving change, but old billing tech is in the way
Our partners all agree that one of the most pressing challenges for energy sellers is being prepared and equipped for change. Where the energy product constructs and pricing models were predominantly wholesale-driven (as indeed were many other sectors), there are other factors driving change including customer expectations, regulatory and environmental changes, which are creating a shift towards a more market-led approach.
Being market-led is about customer centricity - placing the needs of the customer, and in the case of energy, the environment, at the heart of the business. While energy sellers are in various stages of digital transformation, for many there is a significant technology hurdle in their path - legacy billing software.
As Mark Hilmer, Founder and Managing Director at Transformable has observed, “Billing software is one of the key components of an energy seller’s tech stack and it should provide the flexibility and accuracy required to move forward. But legacy billing software was designed around yesterday’s energy sector and is not equipped to easily support clean energy solutions.”
Energy sellers that do not modernise their billing systems will be left behind
Mark also noted that as the energy transition accelerates, flexibility is becoming mandatory. Yet many energy sellers have not changed and are struggling to provide products that can incentivise customers to reduce their carbon footprints.
“In Australia there have been reports of energy sellers exiting the market because they didn't have the cash flow to operate, and that’s because they could not offer the products and flexible tariffs that customers are increasingly looking for like solar, battery, and VPP. Retailers that cannot address these challenges will be left behind.”
Emma Chan, Partner and Global Head of Delivery at Cloobees (UK) had similar thoughts. “Energy sellers need to be able to adapt to customer needs rapidly and move away from the strict billing structures that have traditionally been in place, and instead support things like multi-party billing and renewable energy products.”
Energy billing systems should enable a consistent customer experience
It’s not uncommon for energy sellers to have various components to their billing systems that are based on specific commodities or non-commodity services - some will be utilising legacy billing software alongside spreadsheets and in-house built applications. As Mark Thompson, Solution Director from Capgemini observed, “This fragmented billing experience makes it very difficult to deliver consistent customer experience across all the different products and services. When customers need to call, they want to deal with one agent who is working in one system and can resolve all their enquires, not be passed around to different teams”.
Greg Slako, Senior Director, Solution Engineering at Salesforce had similar thoughts - “If products can’t be billed then they can’t be delivered, which results in disillusioned customers, missed commercial opportunities, and ultimately loss of market share”.
Billing software must enable, not hinder opportunities
New energy propositions are coming to market all the time, and energy sellers must be able to respond quickly. But if legacy software is unable to handle complex calculations and billing requirements without elongated configuration timeframes, then this is a significant issue. Greg elaborated on this point, “Energy sellers are dealing with things like multiple price points and import and export consumption curves within a single billing period, which means they need billing software that is adaptable and can handle this level of complexity”.
From our perspective, the opportunities for revenue for energy sellers are growing both in scale and complexity. Solutions like PPA and behind-the-meter are more complicated, and simply not able to be managed by legacy billing software. In the current energy landscape, even maintaining BAU billing is becoming time consuming and frustrating for energy buyers and sellers, which is resulting in outsourcing and higher costs due to increased human labour needs. Energy sellers are being forced to direct resources to fixing failing legacy technology, which diverts expenditure and effort away from the real opportunities and creates a roadblock to new revenue streams.
There’s a solution to these challenges - modern billing software
The answer to these challenges, of course, is modern billing software that has been designed around the energy needs of today AND tomorrow. Billing software that is not built around a specific construct, but instead harnesses incoming energy data to analyse and slice it in unlimited ways. Modern architecture that is configurable, flexible, and most importantly, prepares energy sellers for change - whatever that may look like.
If you’re interested in finding out more about Flux’s next generation energy billing software and how we can support your business in the energy transition, speak to one of our energy experts today.
