03 Oct The importance of strategic partnerships for Retailers in the Australian Energy market.
4 tips when choosing your partner.
In order to ensure a successful partnership, utilities should consider the following:
1. Examine what complementary skills and services each partner possesses and what the collaboration will be able to achieve
2. Look for common values and a shared vision
3. Clearly define the objectives, goals and purpose of the partnership
4. Check that any potential partner has the right framework to comply with industry regulations
The privatisation of energy utilities in the 1990s was brought about by the desire to deliver more cost-effective, customer-responsive services.
As digital disruption, a changing energy mix and customer-centric design take centre stage, strategic partnerships are becoming increasingly important as a way for Retailers to offer better services to consumers and fast track growth.
Having an ally on your side in the form of a strategic partner can also offer huge benefits on the operations side and for utilities, the opportunity to reduce costs and improve efficiency should make such collaborative efforts a no-brainer.
A strategic partnership allows organisations to combine skill sets and access a broader range of resources and expertise, resulting in reduced costs, improved profitability and increased agility. The use of external support can free up internal staff who are focused on growing the business, adding value on more productive activities, whilst ensuring a more efficient allocation of resources.
Channa Perera, Head of Retail Operations and Managed Services at Brave Energy Systems, said that utilities can gain a number of competitive advantages by forming strategic partnerships, including an enhanced product or knowledge base, lower and fixed cost-to-serve, and reduced risk through the future-proofing of software systems. Strategic partnerships leverage the strengths of both organisations and can be related to technology, operational efficiency, business strategy, market reach or competitive edge.
While strategic partnerships have always had their place in the business arena, the digital age is forcing organisations to rethink how they do business and structure operations. In light of this, several utilities have been embracing digital disruption by partnering with software and technology companies to optimise their operations and deliver more reliable and affordable services to their customers. Ergon Energy partnered with a Western Australian energy technology start-up to provide its customers with an integrated, digital energy management system to help households understand and manage their energy.
It’s win-win situation: the customers are empowered by knowledge and technology to manage and control their energy consumption, and Ergon creates new revenue streams for itself.
Another example of a strategic partnership for electricity retailers would be the outsourcing of certain billing and customer management functions, which can be a cost-efficient and effective way to achieve key business goals.
Brave’s Bravo Retail solution is an end-to-end billing system that also offers a suite of compliance related reports to cover retail licence obligations.
“Partnering with Brave means that our customers can focus on other areas of the business whilst we look after the day-to-day operations, and the long-term requirements, at a much lower cost than what you would pay to manage it internally,” Channa said. “Our Brave Managed Services division provides Australian utility companies with back of house solutions that are managed by a team of dedicated industry experts. They understand market conditions and ensure customers are compliant with regulations and protocols.”
Reducing risk by future-proofing compliance requirements
The Brave Managed Retail service offers a number of features and benefits for electricity retailers.
New customers are validated through a highly automated and scalable onboarding platform, while exiting customers are transferred according to a defined process. Any inaccuracies with customer data are corrected and retailers can be sure that all customers have met entry and exit requirements. All customers are invoiced based on an agreed bill frequency, with any unbilled customers immediately brought to the attention of management via the online dashboard. Meter data is reconciled daily and missing or invalid meter data corrected, guaranteeing that the retailer only pays for the correct amount of energy consumed by customers. Network invoices are also checked for accuracy and reconciled, ensuring the that the retailer only pays for the energy that was actually transported to consumers.
“Fewer operating errors and accurate billing means consumers are not only satisfied but they also develop a trust in the company, meaning they are far less likely to ‘shop around’,” Channa said.
“The knowledge of our software solution, combined with the ability to provide resource coverage, allows us to manage the risks associated with business-critical back office deliverables. Brave has significant experience delivering back office functions to Australian retailers including onboarding, transfers, billing and payment functions.”
Channa said that strategic partnerships can help prepare utilities for the future, but that knowing the industry and maintaining a scalable environment is key when it comes to future-proofing in an affordable way.
“We are talking about a highly regulated market governed by overarching bodies, so it is important that we stay involved in what the state and national regulators propose as future protocols that the market needs to comply with,” Channa said. “As they become clear and defined we need our software to comply. We are in a unique position to provide a service where we are nimble, can plan our software development lifecycle around the regulations and can respond quickly when we need to make changes.”
“Having centralised accountability is a long-term commitment from Brave to our customers.”