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Outsourcing in the Utilities and Energy Sector

Oct 4, 2017 10:14:00 AM

by Josh Boxer

IT sourcing advisory

According to recent industry reports, the annual contract value (ACV) for outsourcing engagements within the utility industry jumped 24 percent since 2014, outpacing the next closest industry by more than double. While outsourcing offers a number of strategic and operational benefits to enterprises of all sizes and industries, the increasing need for utility companies to find the proper balance of operation, cost, and resource allocation has caused many organizations to turn to IT outsourcing as the solution.

For the CIOs and IT leaders of utility companies in particular, a primary focus area has been, and will continue to be in regards to effectively supporting core business needs while addressing unique industry-specific challenges. Many of today’s utility companies have come to realize that as previous generations move closer towards retirement, it becomes increasingly difficult to build and maintain application development teams in-house. Meaning, enterprises are now faced with the challenge of how to best accommodate demands while combatting the risks often associated with an aging workforce.

With the ability to minimize organizational and operational disruption while maintaining high service levels, outsourcing enables utility organizations to shift the daily management responsibilities of non-strategic business initiatives to external service providers, substantially lower IT costs, and eliminate the rising challenge of employing talent with the necessary skillset in-house.

A Story of Outsourcing Success

Windsor Group recently engaged with a utility company that works specifically within the energy sector. Highly concerned about critical resources nearing retirement and the impact that their aging workforce would have on operational capabilities, this client was seeking a solution that would minimize disruption while helping to create a more efficient and cost-effective infrastructure environment. Currently, these resources are largely responsible for managing the organization’s critical customer billing system, and play an integral role in the successful day-to-day operation of the business. Additionally, the client was hoping to leverage this transition in a way that would facilitate the monetary resources needed to rid the company of its outdated, legacy systems and invest in newer and more advanced systems and technology. Although outsourcing was a viable option for solving the organization’s workforce challenges, the client was concerned about potential cost, risk, and compliance issues associated with an outsourced solution.

In an effort to ease concern and instill a greater sense of confidence in outsourcing alternatives, Windsor Group worked closely with the client’s leadership team to establish a baseline that outlined the existing billing system’s operational capabilities, cost structure, and supporting infrastructure dynamics. Through this process, Windsor Group was able create a strong foundation from which the client could strategically evaluate various solutions, and presented the client with potential alternative solutions that had already been configured, priced-out, and compared to the organization’s current and future service requirements.

Upon an internal review which allowed the client to assess the cultural fit, technical design, and financial state of each individual solution, they decided to pursue a more in-depth evaluation of the outsourced solution that had been presented. At that point, Windsor Group worked closely with the client and service provider to perform due diligence and iron out specific details of the solution.

When all was said and done, the energy company that had once been apprehensive to adopt an outsourced IT solution had decided to outsource their key customer billing responsibilities to an external IT service provider that specialized in the management of these responsibilities. Not only was Windsor Group able to connect this energy company with a solution that addressed their workforce challenges while also reducing costs and maintaining high availability and security compliance, but they were able to do so in a way that alleviated the stress and frustration that often occurs when evaluating new IT solutions.

To learn more about how an IT sourcing advisory, like Windsor Group, can help your enterprise gain key insight into the cost effectiveness of its IT infrastructure services, and facilitate a systematic and efficient approach to analyze alternative marketplace service offering, download our whitepaper Benchmarking Your Internal IT costs”.

Benchmarking IT Costs

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