Pursuing an all-digital growth strategy

This article was originally published in the Autumn 2019 issue of The Record. Subscribe for FREE here to get the next issues delivered directly to your inbox.

Founded in 1999, Sorgenia sells electricity and gas to more than 300,000 customers. In 2015, it decided to grow its retail energy business, focusing entirely on digital channels and service excellence to achieve a long-term target of one million customers. The strategy was timed to take advantage of the upcoming end of regulated energy prices in Italy – initially set for mid-2018 and now scheduled for mid-2020.

Sorgenia’s legacy systems – which featured around 20 meter-to-cash and customer service applications – were unable to support its ambitions. It wanted a modern IT engine that could power its long-term digital growth strategy while providing flexibility, and a platform that could tightly integrate business and enterprise processes for lean and efficient digital retail.

Working with Accenture, Sorgenia selected Microsoft Dynamics for its enterprise resource planning (ERP) suite and MECOMS for its customer information, metering and billing system. Since MECOMS is built on and fully integrated with Dynamics, the pair effectively make up a seamless ERP and billing platform, enabling Sorgenia to manage all meter-to-cash processes – from customer onboarding to credit collection – within a single environment.

Sorgenia formed a strategic partnership with Ferranti Computer Systems (the developer behind MECOMS), which contributed the system, and Accenture, which customised it for the Italian market. In just 12 months, the combined ERP and meter-to-cash platform was successfully deployed – on time, on budget and with minimal impact on Sorgenia’s business, despite opting for a ‘big bang’ approach.

Digital channels – including a new web front end and mobile application – are the foundation of Sorgenia’s new customer acquisition strategy. Integrating these into MECOMS through Dynamics CRM helped the company take full control of digital onboarding, which gradually accelerated from 1,000-2,000 new digital customers per month after go-live to peaks of around 10,000 in 2018.

After going live on the new platform, Sorgenia began a comprehensive process improvement programme targeting the meter-to-cash processes in general with specific projects on billing and payment, as well as customer onboarding. This was made easier because the meter-to-cash processes effectively originate and end within the same platform.

The combination of process integration and improvement work enabled Sorgenia to end 2018 with unbilled and unpaid-for energy rates, as well as digital customer additions that place it at the top of the Italian market.

As its data centre housing contract was due to expire, in early 2017 Sorgenia also decided to migrate its new IT platform to the cloud. Infrastructure-as-a-service (IaaS) on Microsoft Azure offered the ideal pay-per-use procurement model and a relatively open and interoperable platform, besides representing the best fit from a technology ecosystem perspective. The cloud project was engineered and implemented by Avanade, and in July 2018 Sorgenia became the first major Italian utility to be fully cloud-based.

Azure enables Sorgenia to activate additional platform components as software-as-a-service, which it did for Dynamics CRM and Office 365. The company is also leveraging IaaS to quickly deploy the resources for designing, building and piloting applications, increasing its agility and shortening the time-to-market of its digital services.

As well as helping to ensure Sorgenia’s systems are scalable enough to cope with increasing customer growth rates and inorganic events like customer auctions, cloud enables the flexibility to cope with contingent factors, including the moving target of full energy price liberalisation. The move effectively allowed Sorgenia to take infrastructure investment out of its balance sheet – a critical factor at a time of growing business unpredictability.

Sorgenia and its partners had to customise some applications to make them suitable for the IaaS environment and enable the platform to manage the expected short-term customer volumes. As a result, the platform performs better on the cloud today than it used to on premise.

Since MECOMS is fully integrated into Microsoft Dynamics, all the functionality and company processes are in one integrated system with a single, familiar user interface, one database and one set of business logic, providing a single version of the truth. The single business process management framework also helps control and manage all workflows in a single environment.

In 2018 alone, supported by the new platform and digital channels, Sorgenia onboarded 100,000 digital clients. Its integrated platform not only helps digitise the contact-to-contract process and streamline the meter-to-cash process cycle; indirectly, it acts as an anti-churn mechanism through good billing, flawless payment and better customer service.