Leveraging the SaaS revolution

It’s no secret that energy retailers need to transform their businesses to remain competitive in an ever-changing market. As well as focusing on how they – and their customers – transition to net-zero, retailers are also becoming more lean and agile, transforming their business models to move away from traditional commodity sales to product and service-led models: think boiler repairs, green home energy generation technology and Electric Vehicle (EV) solutions.

Energy retailers across the global market are using Software as a Service (SaaS) cloud billing and CRM platforms as a springboard to revolutionise their business. Transitioning to these cloud-native platforms presents an opportunity to upgrade business-critical systems and transform the customer experience and cash positions of retail businesses.

Energy retailers in the UK are leading the way with SaaS-led transformation. Five out of the six largest UK retailers have embarked on this transformation, not just by choice but necessity. The UK is also home to some of the market-leading SaaS vendors who are now expanding into global markets.

Transforming the customer experience

Energy retailers – and consequently their customers – are facing unprecedented levels of change in the face of volatile market conditions and large-scale industry transformations. In the UK, recent industry changes such as Faster More Reliable Switching (FMRS) and Market-wide Half Hourly Settlement (MHHS) are just two examples, both of which are aimed at increasing transparency and giving customers more control over their energy usage. Historically, big regulatory changes such as this would require energy suppliers to do bespoke customisation to non-cloud-based systems which is both time consuming and costly. Switching to a SaaS provider allows retailers to bring these changes to market more quickly and cheaply, whilst providing them with the opportunity to go one step further by building technology solutions which achieve improved customer service levels. This is a vital contributor to enabling energy retailers to survive in an environment that is currently dominated by the energy crisis and stagnated energy market.

SaaS billing platforms also provide easy, real-time access to customer data and insights, which allow energy retailers to understand key metrics. In turn, this enables them to provide more personalised, persuasive service offerings to customers. In the UK, for example, we are witnessing a large increase in flexibility schemes offered by energy retailers, where customers can choose to shift their energy usage to periods when the price is lower to save (and even earn!) money. The recent introduction of the Demand Flexibility Service (DFS) – which provides retailers with the opportunity to reward customers who reduce their energy usage during times of peak demand – is an example of how energy retailers could leverage SaaS platforms which can collect and process raw data into actionable insights and turn them into scaled, personalised products.

In a rapidly evolving market landscape, which is increasingly focused on the shift to net-zero, some energy retailers are no longer focusing solely on energy supply as their main value proposition; instead, they are diversifying the range of products and services they offer customers. Some retailers, like British Gas, are focusing their efforts on the installation of energy appliances like EV chargers, storage batteries or heat pumps^[1]. Others, like Utility Warehouse, are creating bundled service offerings, combining energy tariffs with broadband^[2]. SaaS platforms are particularly helpful in such cases, providing retailers with a simple way to deliver new products and propositions into the market and to attribute a range of products and services to a single customer account.

Consolidating the cash position

Energy retailers must maintain a focus on cash flow, continually evolving the business model to reduce cost-to-serve to mitigate the rising price of energy across the UK. In the UK, the regulator continues to implement cost-focused regulation at short notice. This means suppliers need to adapt to survive. SaaS billing platforms are a key enabler for this.

The balance between cost-to-serve and the quality of the customer experience is more important than ever. Energy retailers look to find that perfect balance between delivering high-quality service to customers and having a low cost-to-serve. By having an agile technology platform, the cost-to-serve can be reduced. Energy poverty (due to unprecedented price increases) will also make bad debt management a critical topic.

Having the right billing and CRM system enables instant access to data, a transition to new, more digital methods of customer service (i.e., chatbot or web chat), and increased efficiencies through agent ability to manage multiple customer queries simultaneously: all of which contribute to a reduced cost-to-serve, as well as more efficient service for customers.

Time to transition

As we can see, SaaS-enabled transformation is key to the success – survival, even – of energy retailers. Not only does it enable better service for customers, but it also presents an opportunity to completely re-imagine business ways of working and overall strategic goals.

At Capgemini, we have extensive experience in helping both SaaS providers and energy retailers to make this transformation a success. If you want to find out more information about how we can help, please contact us.

You can find out more information on the benefits of SaaS-enabled transformation, including our thoughts on how it can shift the workplace culture, in our recent article published in Capgemini’s World Energy Markets Observatory (WEMO) report.

^[1] https://www.britishgas.co.uk/smart-home/greener-homes.html

^[2]https://welcome.uw.co.uk/energy/?gclid=Cj0KCQjwla-hBhD7ARIsAM9tQKsU4FSBjDdrhEjfM6yK-5FOGBSEVOH2qJOAytGDj2ePOByZNoIg69oaAqAHEALw_wcB