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Deregulation spurs innovation - Greater utility and focus on customer care with KM systems

This article appears in the issue November 1998 [Volume 7, Issue 12]

Facing deregulation in their industries, power and telephone companies are streamlining billing and payment processes, and using knowledge management software to replace inefficient paper-based or legacy systems.

"With deregulation, companies are realizing their protected revenue streams are no longer protected," said Brian Wick, senior marketing manager at Documentum (www.documentum.com). "Now the focus is on customer care and cost of operations, as competitive power suppliers war for territories."

Deregulation isn't the only impetus for updating an inefficient paper-based system, said Larry Carter, imaging system project manager at Virginia Power and Light (Richmond, VA). "We wanted to get the advantages of electronic processes rather than having to track invoices," he said.

When Virginia Power started investigating an electronic workflow system in 1995, Carter was using a ruler to measure the stacks of invoices on people's desks, trying to get a grip on the company's outstanding bills. Paper invoices were floating willy-nilly around the power company's 50 offices, taking days or weeks to get to the right desk, and even longer to get processed, approved and paid.

So in January 1996, Virginia Power deployed Universal Systems' (www.usiva .com) Documetrix Invoice Manager software. Working with imaged invoices provided the company with an electronic trail on each account, so managers could immediately tell what was paid, when and by whom.

The NT-based server software allowed Virginia Power to get rid of a million pages of invoices and ditch a microfilm operation required by federal regulators to archive records. Virginia Power cut operating costs in its accounts payable department by more than 40%, Carter estimated, and the software paid for itself within two years.

In July 1997, local utility Portland General Electric (Portland, OR) merged with international power wholesaler Enron (Houston), and the two companies have been getting acquainted through their respective intranets.

"We've done some proof of concept work with the Enron intranet, primarily sharing reference documents, but we haven't wired ourselves together yet," said Bob van Calcar, senior analyst for management systems at Portland General Electric. "Ideally, we want to be able to share information across large geographic areas."

Portland General Electric is using a FileNet (www.filenet.com) document imaging system to scan in bills and invoices, allowing it to chuck the paper-based documents, and to share some information with the gigantic Enron, such as who works in which departments. That may be the first stop, van Calcar suggested, before the two companies start working together in the global energy market.

Let 'em rip

Years ahead of utilities on the deregulation path, telecommunications companies have begun to feel the effects of competition, and are experiencing some growing pains. One early contender is Sprint PCS, which is marketing its wireless phone service to business and retail customers nationwide, and using Goldmine's (www.goldminesw.com) contact management suite to link its distributed sales force to the home office. So far, it's been tough getting salespeople to buy into using the software, even though it is a timesaver, making weekly reports as easy as clicking a button.

"Typical of any sales force, it is not easy. We don't hire salespeople to be computer whizzes; we hire them to sell. It's an eternal battle," said John Spector, manager of systems support group at Sprint PCS in Kansas City, MO.

At $400 a seat, Goldmine's contact management tools are not cheap, but return on investment is rapid, the company said. Sprint PCS is using the software to get new recruits up and running in offices nationwide, starting them off with a database of leads and resources. And the software keeps satellite offices in touch with changes in the home office.

"It's really time management. It provides a way of distributing information, the latest pricing lists, company documents, contracts, all that stuff," Spector said.

Solving problems

The biggest pickle for telecommunications companies lies in updating legacy systems. Old and undocumented COBOL code, used to build automated billing systems in the eighties, is hampering the ability of large teleco companies to compete with promotional deals from their more nimble competitors.

"The core expertise of telecommunications companies, other than wiring and maintenance infrastructure, is billing," said Gerry Murray, director of Knowledge Technologies at International Data (www.idc.com). "Because telecommunications companies cannot offer new services before incorporating them into the billing systems, they have a huge challenge on their hands to upgrade the systems."

Major telecos could not match, for example, MCI's (Jackson, MS) Friends and Families promotional campaign, Murray said, because their billing systems could not be configured to calculate different rates for some phone numbers.

"Generally, the bigger the RBOC (regional Bell operating company), the bigger the problem," he said.

The large telecommunications operators are deploying document management software like FileNet as a workaround for those old and inflexible systems, providing electronic documentation for the code and facilitating changes by automating calls to multiple databases, said Bob Rust a 28-year veteran of Bell South who now operates a consulting firm in Atlanta.


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