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Has increased competition in the energy sector benefited customers?

Energy & Utilities

A sector once known for its predictability has become much more dynamic and demanding. Deregulation has created intense pressure on utility companies to cut costs and find new opportunities for growth. They can now choose from an array of strategies and operating models.

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Whatever approach they take, success depends on putting in place the right processes and supporting technologies to drive out costs and create an agile and responsive organisation.

Among the challenges utility companies face is pressure from new entrants extending their brands into the sector. Prices are volatile as political and economic factors begin to take effect on supply. A sector which once had a strong national flavour is has taken on an increasingly international air: nine of the 14 British regional electricity supply companies created by privatisation in 1990 are now owned by just three large continental utilities. And it’s a sector where the initial upheavals of privatisation have been gradually settled by increasing regulation.

Whether the market is weak or strong, utilities should look for opportunities to improve their performance. Some of the areas utilities must consider include:

• managing risk, whether trading for utility supply or identifying and managing poor-paying customers;
• building a more diverse, yet complementary, product portfolio;
• taking advantage of new communication channels, such as the internet for e-billing, to improve customer service while reducing costs; and
• streamlining back-office operations and using techniques such as offshoring or outsourcing and shared services to reduce costs.

We help our clients in the energy and utilities sector choose and implement the right programmes to deliver lasting value. We work with them to assess their current operations and identify opportunities to reduce costs, increase agility or enhance service levels: redesigning processes, consolidating or virtualising technology platforms, or implementing new IT architectures. We help them set up shared service centres to eliminate duplication and create economies of scale. We can ensure their organisation is in the right shape for successful outsourcing or offshoring. And we help them create an end-to-end view of services so that they can identify opportunities for new sources of revenue. Our proven approach to change management enables us to deliver significant improvements in performance for our clients.