Energy and Utilities

How can utilities outsourcing help your business grow?

Energy and utility industries, including electricity generation and oil and gas drilling, are facing steep challenges after COVID. These challenges include capacity shortage across the value chain, higher prices of refined products, and pressure to comply with regulations.

Utilities are one of the most asset-intensive industries. The companies are finding it challenging to deliver security and stability and improve shareholder value.

This article will explain how utility business process outsourcing helps businesses overcome the enormous challenges they face.


Challenges of the utility industry

From extensive research and development to a highly-skilled workforce, the utility industry has numerous challenges to cope within its core business –

  1. Improving customer retention.
  2. Cross-selling and investments in finding opportunities in emerging markets.
  3. Possible loss of knowledge with the ageing workforce that exits due to retirement.
  4. Continuous need to optimise processes and increase efficiency.
  5. Extreme decentralisation, multiple business units, and a complex structure.
  6. High G&A costs.
  7. Lack of skilled manpower in the given geographical region.
  8. Continuous modernisation of electricity grids requires massive investment.

A leading professional services firm has recently found that energy and utilities businesses are finding it challenging to acquire capital, as the requirement is large, and the investors are cautious.

New market players have high fixed costs of infrastructure and regulatory approvals. They need time and money to build the brand and gain customers’ trust.


Cut-throat competition

The power is in the hands of the buyer, and there is little that one utility company can do to differentiate its product from that of another. Buyers seek better prices and contract terms. Customer service is the only differentiating factor that remains to play with.


Focus on higher efficiency

Utility companies must increase their revenues without pushing retail prices upwards. The only way to do this is through higher operational efficiency. They spend about 60 per cent of their revenue on operating costs, most of which are human resources.

This includes the staff in back-office operations such as IT, finance, accounting, and HR. Utility businesses find it hard to find the right talent to manage these verticals in-house. Outsourcing these functions to a third party allows utility companies to focus on their core business and its challenges.


Grow your utility business with third-party outsourcing

According to research, the utility sector outsourced services worth $25 billion to industry-specific service providers. Third-party BPM partners offer a suite of tailored solutions for the utility industry through a global delivery model.

Outsourcing the non-core processes allows utility businesses to achieve operational excellence, streamline processes, and rationalise their back-office. Outsourcing also gives you access to top-notch talent globally. Other benefits of outsourcing are –

  1. Let go of the overheads and free your senior staff for strategic planning and execution.
  2. Get better end-to-end visibility for faster decision-making.
  3. Reduce the total cost of ownership.
  4. Focus on adding new technologies, expanding capacity, and upgrading ageing facilities.
  5. There is no need to recruit, onboard, train, and manage employees for non-core areas.
  6. A smaller in-house workforce reduces the CAPEX and OPEX.
  7. Design new products and services to gain and retain customers.

Outsourcing can get you the same or better service in the non-core areas at a lower cost. The value proposition of outsourcing is not just limited to increased efficiency but also long-term value addition to your business.


Common processes to outsource

The energy and utilities sector can outsource the following processes to lower their expenses and achieve better results.

  1. Master data management (MDM).
  2. Flex-staffing.
  3. Engineering documentation.
  4. Supplier performance analytics.
  5. Advanced metering infrastructure (AMI).
  6. Data validation, new product support, and meter data analytics.
  7. Finance and accounts.
  8. Sourcing and procurement.
  9. Human resources.
  10. Customer services through chat, email, or telephone.

For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.


How can Infosys BPM help?

Seamlessly outsource your master data management, staffing, supplier enablement, and engineering documentation.

Take the example of a leading telecom service provider in the UK, which reduced the cost of its business operations by outsourcing the transactional activities in the finance directorate. These activities include Accounts Payable (AP), Accounts Receivable (AR), Procurement, Reporting, Credit Referral, Fraud, Billing and Commissions, Data Management, Interconnect and Roaming settlement, Fixed Assets, and Revenue Accounting.

Read more about how non-core process outsourcing can grow your utility business.


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