Change in Australian Energy Markets

Protection from Change in Australian Energy Markets

Document Type: White paper
Version: 1.0
Date of Issue: November 24, 2017
Author: Andrew Bannon

Key Points

  • Deliver industry change projects faster and using less resource
  • Remove the need and expense for localised core enterprise systems
  • Protect your CRM and billing systems from industry change
  • Provide an end to end view across Smart and Traditional Metered processes
  • Minimise the impact of system upgrades
  • Free up time to focus on optimal customer processes rather than industry compliance

Summary

The Australian energy market is undergoing a significant amount of industry led business and technical change. Many of these changes are significant and have had a huge impact on business processes and the systems that underpin them.

In this paper, we explore the idea of protecting players in the market such as energy retailers, metering services providers and network providers from these costly and frequent industry changes. At K2Fly, we know there is a better way to cope with industry change that involves protecting your core enterprise systems such as billing, CRM and asset management.

We know the energy industry and we understand the difficulties faced by participants in the Australian energy market when it comes to managing industry change. K2Fly can protect participants from these changes whether its market competition, new industry roles and processes, large scale smart metering rollouts, Power of Choice, de-regulated markets, expansion into new States, Territories and commodities, or readiness for future change to come.

Introduction

The Background

With the current industry challenges and high levels of change in the energy retail market such as the Power of Choice (PoC), de-regulation, changes effecting core back office systems, non-unified management of multiple head end systems, State differences in rules and regulations, smart metering rollouts, 5-minute data intervals and retailer switching, the business processes at the heart of the Australian energy industry are undergoing significant transformation.

In some cases, the extent of these changes will mean that additional supporting systems will be required to not only hold the new data that is available, but also to manage the end to end processes (e.g. remotely updating meters). Depending on the design undertaken by market participants, many of these changes will impact not only the core business systems such as CRM and billing but also the day-to-day operations of the business and all the supporting systems.

For example, most energy retailers in Australia today use ‘utility specific’ billing systems, and as such these systems hold and maintain a great deal of the data used to manage the processes that are subject to change by these industry initiatives. With increased competition in the Australian market driven by de-regulated markets and no sign of a decrease in the level of industry change, many energy organisations have significant costs and challenges spread across the IT landscape in keeping these systems in line with the latest requirements.

Given Australia’s multiple States and Territories their regulatory nuances, pace of change and market differences, the history of the Australian energy sector has engineered sophisticated complexities into the participants operating processes which may span multiple States and commodities. While maintaining compliance with the latest regulations they also need to develop and implement their own internal business strategy. With all of this in mind, how can organisations minimise the impact of ongoing change as the industry evolves?

Simplify the Problem

Looking ahead we can see that political, environmental, regulatory and competitive forces will continue to drive a high rate of change.

K2Fly has first-hand experience of how industry changes can impact the front, back and middle office. We can see that in many cases customer service advisors are limited by their ability to analyse a customer issue due to the complexity of industry processes, and the domain knowledge required to resolve what would be in many other geographies and industries, a straight forward issue.

Encapsulate the Industry Layer

At K2Fly we believe in making industry processes work more efficiently and have used our own experience and our AMT-Sybex partner’s experience to create a process and data management framework that offers support for the industry requirements, out of the box, yet still provides the flexibility required to readily accommodate ongoing change.

Our Marketflow® solution works independently of other core systems and allows organisations to focus on delivering the best service for customers. The solution introduces a dedicated Industry Process Management layer (IPM) into the application environment. This IPM layer is responsible for managing the complexities of the market processes and any variations in process from State to State and commodity to commodity. This approach provides a level of protection to core business operations and IT systems from the many mandated changes that are required in the Australian energy sector.

This solution processes industry data, along with both file and service based data exchanges between all industry participants, and provides support for the industry mandated processes that overarch these exchanges.

Our solution is provided as a product based solution which ensures that it evolves in line with the future industry changes.

As well as the Marketflow product, K2Fly can also provide additional business and IT services that wrap around the industry layer to ensure you meet your commercial and regulatory requirements.

Delivering Real Business Value

Using IPM delivers benefits to our customers including;

  1.  Simplified Integration

IPM removes the need for a spider’s web of integration core business systems and the various industry data exchange solutions in place today. IPM manages the E2E industry process without frequent interaction with the core systems. Status information and exceptions are passed back to the core system as required.

  1.  Improve industry process tracking

Tracking industry processes is crucial for an energy retailer for a number of reasons;

  • to ensure that the processes are implemented and executed as efficiently as possible
  • to help manage industry agents against commercial SLAs
  • for external regulatory reporting against industry wide performance KPIs.
  1.  Less customisation and protection from future change

Having Marketflow operate as a separate layer within the architecture enables a move away from building costly enhancements to other core systems and allows a more “out of the box” approach for billing and CRM implementations. This approach also makes the process of future system upgrades to these systems more straightforward.

The desire to move forward with changes driven by business strategy or new technology has often historically been hampered by the focus and resources that must be applied to significant industry change projects.

Using a product based solution for future industry change cycles offers faster implementation times and lower cost and risk in the implementation of the necessary changes within the IT landscape. It also allows more time and resources for innovation and transformation to continue within the retail business based on other strategic drivers such as channel shifting, digital innovation and home services whilst being confident in a long-term platform that will support your interaction and compliance with the wider industry.

Making the Business Case

Protecting your Business and Saving Money 

We’ve presented our view based on our knowledge of this industry and of course our understanding of our client’s business requirements.

In summary, taking this approach reduces the cost of implementing industry change in other systems (billing and CRM) which we know is costly and disruptive due to the number of users involved in processes around these systems and the inherent cost/risk associated with customising these platforms.

With the amount of industry change taking place now and in the future, and the likelihood of CRM and billing system upgrades, this is an ideal time to consider moving to an IPM approach.

Business Efficiency

IPM will save time and resource, allowing you to focus on innovation and transformation within your business. Having the data together in one place enables significant value to be driven across both smart metering and traditional metered aspects of industry processes. This also enables an end-to-end process view that ensures efficiency is measured, and any process failures are tracked, facilitating rapid responses to any process and data issues that may arise. 

About K2Fly

K2Fly delivers advisory, and implementation services focusing on the digital transformation of Electricity, Water and Gas organisations.

An accredited partner of AMT-Sybex, K2Fly offers proven, bench-marked and scaleable solutions that meet the challenges brought about by changes to the utilities sector.

K2Fly brings AMT-Sybex’s Affinity Suite Products to the Australian Market including;

Marketflow® which is a powerful utility industry process and data flow management solution for major utility organisations operating in de-regulated markets. Marketflow® is proven in the UK energy market where it manages the data flows of British Gas, EDF Energy, RWE npower, Scottish and Southern Energy and Iberdrola. It is also deployed by Thames Water and Northumbrian Water.

Meterflow® meets the huge demands for data processing performance brought about through interval data from multiple smart meter head end systems across multiple States and commodities and enables smooth interaction with business processes in de-regulated energy markets. Meterflow is benchmarked by both IBM and Oracle for up to 100 million meters without requiring large investment in new hardware and completed end to end processing of 10 million meter points in 36 minutes on a single server.

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