Utilities: Next Practices for a Stealth Outsourcing Giant

May 09, 2011 | Phil Fersht

The view from Esteban's bedroom window

Coincidentally, our resident utility player, Esteban Herrera (COO and SVP Research) has a long background in the Utilities space.

So we knew when he teamed up with Reetika Joshi, HfS Research Contributing Analyst for BPO Strategies, we'd see a great result. Now that the report is available on HfSResearch.com, Esteban has taken a breath to give you some background on what he and Reetika uncovered. Take it away Esteban...

Utilities: Next Practices for a Stealth Outsourcing Giant

Shhh… Don’t tell anyone, but while most of us weren’t looking, the utilities industry quietly racked up $25 billion in annual spend on outsourcing—that’s in the US alone! How did this happen? How did this get past the regulators and the unions? Who knew that outsourcing would not only grow, but stick, in this most conservative of industries?

The next generation business platforms for the industry will be built not by utilities themselves, but by collaborative alliances of clients, outsourcing providers, and hardware and software vendors. From plug-in electric cars to alternative sources to a flood of new regulations to demand-response-based pricing, the requirements for change in the industry are simply too many, too frequent, and too capital intensive for each company to develop on their own. It simply is not efficient for the industry if each company builds out its own platform for the next generation business model.

In our ground-breaking new report The Utilities Sourcing Landscape in 2011: Are Global Utilities Outsourcing Smarter?, you’ll learn:

  • How utilities are being “bullied” for the first time in their long history, with major change (and even the rate of change) being dictated by regulators, customers, and (yikes!) even competitors; and how outsourcing can be a part of the response
  • As the grid becomes the network, the roles of IT and T&D are on a collision course which will force unprecedented technology and process integration
  • How some utilities are successfully leveraging outsourcing to ease the demand for talent brought on by the boomer retirement crunch
  • Which processes and functions have been successfully outsourced to date, and what the future holds
  • Why it makes good business sense to partner with providers on AMR/AMI, regulatory compliance, smart grid, and next-generation CIS efforts
  • What industry-specific challenges to expect, how they can lead to failure, and how they can be mitigated

Esteban Herrera, COO, HfS Research (click for bio)

HfS Research believes there are significant differences in the needs and expectations that each industry has around outsourcing. Providers do well to spread horizontal expertise across industries, but they’ll earn their stripes (and lots of customer loyalty) if they also master the vertical expertise. That’s why we are the only outsourcing analysts to have launched a rotating series of vertically focused reports to help buyers understand what outsourcing can do for them next, in their language. For a first taste of this vertically focused coverage, HfS research clients can download this rich new report here. Stay tuned for coming coverage on the other Energy industry, Oil & Gas,  as well as Health Care Payer and other verticals.

Posted in: Business Process Outsourcing (BPO)IT Outsourcing / IT Services

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