With the introduction of smart metering, the German energy market will be facing a radical shakeup. Smart meters provide detailed data about consumption and use. This data can be refined and sent to customers using output management software – and can thus put utility companies on track to more sales and greater profits.
Starting next year, utility companies in Germany will be required to provide electronic meters for electricity and gas. From 2010, the devices will be compulsory in all new buildings and in buildings that have been completely modernized. By 2020, 80% of all German households should be equipped with smart meters.
Protecting the environment
Behind this move is the German government’s climate change package II, which aims to increase energy efficiency and promote renewable energy. Currently, utility companies are trying out the new technology in projects such as the E-Energy beacon project funded by the German Federal Ministry of Economics and Technology. In six model regions, the parties involved are testing smart grid infrastructures in which the energy supply system is digitized and optimized.
Smart metering – the details
Techies call the new point-of-delivery systems required for smart metering “advanced metering infrastructure” (AMI). This infrastructure provides an architecture for process-oriented, bidirectional data exchange between the points of delivery and the ERP systems. The main components are solutions from the SAP for Utilities portfolio, including IS-U, IDEX-GE, SAP Energy Data Management for Utilities, and SAP NetWeaver Business Warehouse, supplemented with numerous partner solutions for the power industry.
The smart meters are connected to the AMI in test installations, in some cases with intermediate concentrators. Using these, they communicate with the meter data unification and synchronization system (MDUS), which consolidates and aggregates the meter data, and exchanges it with other systems.
The multi-compatible power network has a wide variety of uses. Customers can, for example, monitor their current energy consumption while they are away from home using their BlackBerry or iPhone. In addition, commands can be sent to the home network to, for instance, activate profiles for energy-saving during vacation periods. Other applications can be hooked up to the MDUS system on the energy company’s side – for example, for dynamic pricing depending on demand and the current energy market prices. StreamServe output management software has eight certificates for all relevant SAP interfaces for sending data or exchanging documents. This means it can be easily integrated with SAP systems.
Many utility companies are still skeptical about smart metering. As well as having to swap the old analog meters for new digital ones – and having to set up the necessary infrastructure for this – they will face increased printing costs. Instead of receiving their consumption data and energy bills once a year, private customers will receive them once a month. But the extra work and costs will be worth the effort. Once a conventional meter has been replaced by a smart one, the data acquired can be used for a wealth of new services.
According to Stephan Vanberg, vice president for sales and services at StreamServe Central Europe, this is where most of the potential of an output management solution lies. “The extra costs generated by more frequent billing can be significantly reduced. If you have to send twelve bills a year instead of one, you need solutions that can send an electronic or a paper bill depending on what the customer wants – and that can also optimize your printing processes.” Both measures bring with them significant cost savings.
But what is much more interesting is the option of managing customer relationships as an ongoing process. With frequent billing, smart metering gives companies the chance to hold on to customers long term. An energy company can, for example, offer new services or make recommendations when it sends a bill. Options range from individual tips for saving energy or optimizing energy management using energy portals, to introducing new electro-mobility systems and informing customers about where they can recharge their e-cars.
Improved customer relationships
Unlike advertising materials, billing documents are read by customers – sometimes even more than once. And they are filed away. This gives energy companies the chance to address their customers regularly, individually, and in a targeted way. What’s more, the probability of successful cross-selling and up-selling increases, while products and services can be better matched with customer requirements. And it is a good way to halt the defection of many customers – because there is a growing trend among electricity customers to change provider. Today’s consumers are interested in factors such a price, simple price structures, clear invoices, and good service.
With the help of output management solutions, power companies can retain their customers for longer. An invoice based on current meter readings also enables direct conclusions to be drawn about consumption patterns and allows energy companies to point out ingrained habits in energy use – and then help customers change them for the better. That’s why it makes sense to inform customers about special tariffs and price packages at this point.
But whether an energy company takes the opportunity to improve its sales approach also depends on how simply it can create billing and marketing documents and get them sent to customers. For example, Mainover, one of the largest German regional utility companies with headquarters in Frankfurt am Main, feels ideally equipped to meet the new challenges presented by the smart metering legislation. It uses solutions from the output specialist StreamService, based in nearby Bad Homburg, to create the eight million documents that it sends to its customers every year. Software programs such as StreamServe Persuasion and Composition Center ensure that the RDI (raw data interface) data from the SAP system is not only read and incorporated into forms, but it is also attractively laid out – in line with corporate branding – and can be printed fast and cost-effectively.
Once monthly billing becomes reality, the marketing team will easily be able to use a Web browser to create documents for individual or mass mailing, and then select the appropriate output channel. “All this means the interplay of smart metering and output management will become a driver for additional growth as the economy is picking up again,” says Vanberg, convinced that energy companies will have much potential to tap in the near future.