How utilities' digitization opens opportunities for software providers

Important projects for the modernization and technological updating of utilities have continued in full swing in Latin America, even during the coronavirus pandemic.

There are two main drivers for this process. 

On the one hand, the greater demand for digital transformation comes in the wake of the need to reduce costs and generate operational gains by these companies in a context of margins under pressure from the economic downturn.

On the other hand, a large number of public utilities in Latin America still operate with siloed legacy systems and outdated technology parks, especially in comparison with the private sector. 

Most of these projects are usually long-term and refer to tenders and contracts signed before the pandemic burst.

Besides, many utilities are venturing in new fields, such as telecommunications products, which opens opportunities for companies with solutions for both worlds.

This is the case of Miami-based software firm Open International, which specializes in providing services to private and public services and telecommunications in 19 countries in Latin America, and which has among its regional clients AES, Promigas, Claro, Telecom Argentina, among others.

The company offers mainly customer relationship management (CRM) solutions, billing systems and systems integration and has seen the demand for some of its products grow in recent months.

BNamericas spoke to Jesús Sánchez, VP of marketing at Open International, about the challenges and opportunities in these segments.

BNamericas: The CRM market has been in high demand in the context of pandemic-accelerated digitization, but it is a segment in which many large players have been operating for some time. How is Open International positioned in such a competitive scenario?

Sánchez: It is well known that CRMs are among the systems most used by organizations from different industries to manage their business and customer service processes, and that, during these pandemic months, when the need for digitizing organizational areas and processes soared, its adoption has been even greater. 

However, what the experience of more than 30 years in the market has taught us is that our clients, which are telcos and utility companies, require much more robust technological solutions to support their highly complex operations.

These companies usually have different systems (CRM is only one of them) for each area of their business, which operate in multiple interactions with each other, but this has proven to be an inefficient strategy and may affect the provision of a quality service to users. 

A study by TMG found that 52% of utilities think they need more integrated solutions, considering this factor as the second driver for the modernization of their technological systems.

For reasons like these, our product, Open Smartflex, is a holistic solution that covers the entire business cycle of telecommunications and public service providers. The core of Open Smartflex is a CIS solution that also incorporates functionalities of customer relationship systems (CRM), meter data management (MDM), mobile workforce management (MWM), customer self-service (CSS) and analytics, covering all critical customer-oriented processes.

This approach, together with a high level of flexibility, has allowed us to differentiate ourselves from our competitors. With the same product, public service and telecommunications companies that work with us can not only manage their entire business, but also develop innovative capacities to change their business models and drive their digital transformation strategy focusing on the customer experience, which today, more than ever, has a special relevance.

BNamericas: Among the 19 countries in which Open operates in Latin America, which have stood out in terms of sales?

Sánchez: During the last five years we have achieved a sustained growth rate of 25%, thanks to our expansion in both the Latin American and North American markets.

I’d highlight growth in sales in countries such as Argentina, Colombia, Ecuador and some markets in Central America, where different telecommunications and public service operators who were already working with our solution have decided to upgrade to the latest versions of Open Smartflex and continue to purchase our consulting services to drive their digital transformation strategies.

Likewise, we have obtained new clients in Latin America who are preparing to implement the latest version of Open Smartflex under our new offer of cloud services.

Finally, I would highlight the excellent results that we are having in the US where just two years after we launched our commercial operations there, today we have already completed phase I of an implementation project for our first client in that country, an energy and water company that decided to enter the broadband and telecommunications services market to supply a community of more than 160,000 inhabitants.

BNamericas: In the utilities arena, which segments have been driving demand? Along these same lines, what is the importance of the public sector for Open's businesses in the region? Is Open participating in any tender at the moment?

Sánchez: There is a growing number of companies in the region that are betting on the modernization and digitization of public services. Several water operators are undertaking their digital transformation processes to leave behind operational problems related to manual processes and technological obsolescence that their organizations had.

Likewise, in the energy sector, we are seeing a great acceptance for new trends and smart metering technologies, whose effective implementation requires not only investment in meters and communication infrastructure, but also in cutting-edge software solutions to generate value to end customers, increase the efficiency and quality of the company's measurement and billing processes, and provide updated information to regulatory entities using intelligent measurement information.

In line with this, the demand has been driven by companies that seek integrated, flexible solutions using cloud, smart metering, mobile computing, among others. 

The public services sector is one of the backbones of Open's commercial operation, even more so considering that an important group of utilities is entering new businesses and services, including telecommunications products, the other major segment served by our organization. 

The capacity and experience we have with suppliers from both industries is one of the great differentiators compared to our competitors and it is something that we seek to make visible in each of the bidding processes in which we currently participate.

BNamericas: What is the outlook for 2020 in terms of sales and capital expenditures?

Sánchez: Despite the current situation, at Open we adapt and ensure the continuity of the operation and the attention to our clients without neglecting the health of our employees.

Thanks to this work, we are convinced that we will be able to achieve the targets set for the year. At the same time, we will continue to invest 30% of the company's revenue in research and development with the goal of constantly evolving our products and services to provide a better experience for our customers.

BNamericas: Are there more opportunities to grow or is the context more challenging?

Sánchez: It is clear that the current scenario is challenging for everyone; however, we believe that there are always opportunities for growth and improvement. For example, we have been witnessing how Latin America, in line with the goals of the World Energy Council regarding climate change, is preparing for that. We are working on the migration toward smart metering, with a view to modernizing and digitizing the electricity sector.

Governments of different countries in the region have begun to issue regulations that specify technical conditions that must be met, the objectives to be achieved and the deadlines for the implementation of these technologies. 

These regulations contemplate initiatives around the incorporation of advanced measurement infrastructure (AMI) in internal company processes to improve the quality of energy and service, the automation of distribution networks, the incorporation of distributed energy generation resources, new pricing models, the transition toward sustainable technologies such as electric vehicles and the creation of entities that ensure that the measurement data derived from AMI are available to the different market players that require them.

To respond to this transformation scenario, our meter data management solution has capabilities that allow processing large volumes of consumption data per day, apply different hourly rate schemes for the benefit of customers, automate reading processes, restoration of service and diagnosis of the state of the meter, ensure the quality of the measurement and billing with VEE processes by rules, and provide the client with visibility of their consumption per hour and per day through our web portal solution.

The current situation has given us a unique opportunity to show how our holistic Open Smartflex solution has the capabilities that empower organizations to accelerate their digital transformation processes and efficiently manage the vicissitudes generated by disruptive events, as well as the flexibility to innovate and enrich the commercial offer with new services that adjust to the demands of a post-pandemic market. 

We believe public service companies throughout the continent will continue their digital transformation processes and for this, we adapt our implementation methodology to carry out remote projects based on previous successful experiences in energy companies in Chile and potable water companies in the Dominican Republic, for example.

Throughout this year, we have expanded our commercial relationship with many of our clients in Latin America, we have closed new contracts with companies in the region, we are growing our network of partners and we are also finalists in various selection processes for North American companies, with which we hope to further expand our presence throughout the continent.