The double edged sword of E-Business for Utilities
22 June 2000
European utilities operating in deregulated markets recognise that they must embrace eBusiness as a strategic business tool, according to a pan-European survey by Cap Gemini Ernst & Young, one of the largest management and IT consulting firms in the world.Sixty-seven per cent of the utilities surveyed agreed that eBusiness would provide opportunities for cost savings. However, the same percentage of
interviewees said that eBusiness would also increase the likelihood of new entrants to the sector.
Cap Gemini Ernst & Young surveyed senior executives from 24 major European energy companies. These utilities serve more than 130 million customers. Fifty executives were interviewed between January and March this year.
The research found that utility companies operating in more liberalised European energy markets have progressed their eBusiness strategies beyond
those operating in countries at an early stage of deregulation.
The research investigated:
· how utilities expect eBusiness to affect their industry;
· how they can best exploit eBusiness opportunities;
· what eBusiness tools are already in place for customers and suppliers.
The research found that most utilities, regardless of geographic location, have started to use web-enabled services in order to offer their customers a variety of value-added services, for example energy savings calculators and metering information.
The
more advanced utilities are developing strategies for offering a bundle
of services to customers, for example electricity, gas, telecoms and
cable TV subscriptions via joint partnerships and ventures.
The research showed that the utilities in deregulated markets are
prioritising customer care and value added services via extranets
to their larger, industrial customers. For example, customers are
being offered consumption information, information on contracts, portfolio
management and
also simulation opportunities for future energy demand.
Lennart Gustafsson, Business Development Consultant, Energy &
Utilities Global Sector Unit of Cap Gemini Ernst & Young, and
project director of the
research, said: “The first years of being on the Internet were experimental
for many utilities. Now some of the larger European companies have
introduced more co-ordinated approaches and more ambitious strategies
for their eBusinesses”.
“They have started to develop services to better serve larger customers
and to find e-procurement solutions in order to become more cost effective.
Customer relationship management (CRM) systems are seen as essential
to analyse customer information, gain better access to the customer
and extract knowledge that could predict customers’ likely behaviour.”
A similar survey carried out in the US analysed industry sources,
the websites of 65 utilities and the views of senior executives at
electric and
gas companies. The survey found that nearly half of the companies
surveyed take a proactive approach to eBusiness; the rest are reacting
to
competitors’ moves. A majority of the respondents viewed eBusiness
as a way to improve efficiency, but not as a vehicle for business
growth, in contrast to UK, Scandinavian or German firms who regard
eBusiness as a strategic business tool.
Notes
to Editor:
Cap Gemini Ernst & Young is one of the largest management and
IT consulting firms in the world. The company offers management and
IT consulting services, systems integration, and technology development,
design and outsourcing capabilities on a global scale to help traditional
businesses and “dot companies” continue to explore growth strategies
in the new economy. The newly formed organization employs more than
57,000 people worldwide and reports global revenues of 7.7 billion
euros (1999 pro forma).
The Cap Gemini Ernst & Young Energy & Utilities Global Sector Unit serves the business consulting and information technology needs of many of the
world’s largest players of this industry.
For more information: www.capgemini.com/utilities
For further information, please contact us:
Florence Mairal Corporate Press Office
Cap Gemini Ernst & Young Tel: +33 (1) 47 54 50 91
Philippe Coquet Energy & Utilities Global Sector Unit
Cap Gemini Ernst & Young Tel: +46 87 04 55 46
Lenart Gustafsson Energy & Utilities Global Sector Unit
Cap Gemini Ernst & Young Tel: +46 8 704 47 84
In the UK:
Michelle Perkins Press Office UK
Cap Gemini Ernst & Young Tel: +44 870 904 5688 (direct)
or via Harrison Cowley, our PR consultancy
Louise Cumber Tel: +44 (171) 404 6777
Caroline Feltham Tel: +44 (171) 404 6777
If you prefer to communicate electronically, you can visit our UK Website
(www.capgemini.co.uk) and email us at louisec@harrisoncowley.com or
michelle.perkins@capgemini.co.uk.
