Market liberalisation is the single major trend driving the implementation of e-business projects in the Western European utility sector, according to IDC's new report, 'e-Business In Utilities: Best Practices in e-Procurement and Customer-Facing Systems'.
The report shows that, while many differences remain between those countries with long traditions of deregulation and those without, utilities throughout Western Europe show a significant propensity for investing in IT projects that meet short-term objectives and guarantee a quantifiable return on investment (ROI).
European utilities are developing e-business strategies driven by the need to adapt to market competition, and the degree of market opening is directly related to the sophistication of the utility organisations' information technology. Utility companies operating in the more liberalised European energy markets (such as the UK, Germany and the Nordics) have progressed their e-business strategies beyond those operating in countries at an early stage of deregulation.
IDC expects organisations in the utility sector to gradually increase their interest in IT solutions that enhance their relations with both suppliers (such as e-procurement) and customers (their customer facing systems).
According to IDC, e-procurement is generally limited to the purchase of indirect goods and services through online catalogues. There is a growing trend, however, toward the use of more sophisticated procurement solutions that are integrated with back-end systems.
In terms of customer-facing systems, although investments by utilities are still generally behind those seen in other industries (such as finance and communications), there has been strong activity in the creation of web sites aimed at clients, with the objective of establishing an extra communication and customer care channel. However, utilities are still lagging behind other industries in the adoption of solutions that support integrated CRM strategies.
One key issue that emerges from the case studies included in the report is the integration of legacy systems with newly implemented e-procurement or customer-facing applications. One of the prerequisites for the effective implementation of e-business is the availability of an IT platform that is well integrated and up to date.
The report focuses on significant case studies of utilities that have implemented e-procurement and customer-facing solutions in support of their business strategies. The main benefits and issues faced by those companies when developing their IT projects are identified and analysed in detail.