INTERNET: Most utilities’ web sites unable to compete online

Most utilities' sites lack the sophistication and functionality necessary to compete effectively in the on-line marketplace, a study from Andersen Consulting has found.

The study of 144 utility companies’ web sites in the United States, United Kingdom, Australia and Hong Kong claims shortcomings leave many traditional utility companies vulnerable to companies seeking to capitalise on utility deregulation by selling electricity and interacting with customers entirely over the Internet.

The study found tremendous variation in the quality of utility web sites., the best performing web site, outperformed the worst web sites by more than nine times on key functionality measures such as quality of content, ability to conduct transactions, range of interactivity and usefulness of content to key stakeholders.

Characteristics of the top performing web sites include the ability for customers to conduct general account management functions such as changing service plans and selecting the day of the month to be billed, receive and pay bills on-line, obtain real-time pricing data and monitor hourly energy consumption.

In contrast, the bulk of utility web sites are relatively unsophisticated and lack the functionality to realize eCommerce benefits.

“Level of development of a utility’s web site is one very visible measure of the company’s eCommerce strategy and execution,” says Ian Gibson, Andersen Consulting associate partner who conducted the study. “eCommerce gives companies the opportunity to greatly extend their relationships with customers by interacting with them on a very personal and customised level. Unfortunately many utility companies are not taking steps to do this despite the fact that most are either already or soon will be facing a much more competitive marketplace. “

An indication of how far behind some utilities are in establishing web-based relationships with customers is the length of time it takes them to respond to an e-mail message submitted to their web site. In a related study, Andersen Consulting found an e-mail ‘black hole,’ with only 27 percent of utility companies responding within 24 hours. Moreover, 34 percent of utilities contacted by e-mail failed entirely to respond to the message and 11 percent had malfunctioning e-mail capability.

Despite the poor showing by many utility sites, the study did find the top performing utility web sites received scores nearly as high or higher as sites such as, Qantas, CNN, Federal Express and Lonely Planet On-Line which are generally considered to be best practice.

“Utilities are as capable as any industry of creating web-based business models which improve the way they serve customers,” Gibson says. “Unfortunately, many utilities are choosing to risk lost customers, forfeited revenue, wasted web investment and an eroded brand name by not developing a comprehensive eCommerce strategy.”

Among the world’s utility web sites, US sites are the clear leaders in terms of sophistication and functionality. The top ten ranked utility sites all were from the United States:, New Energy Ventures, Florida Power & Light, Salt River Project, PEPCO, Southern California Edison, Niagara Mohawk, Consolidated Edison, Arizona Public Service and Kansas City Power and Light.

The advanced sophistication of US utility sites poses a significant threat to utilities in other parts of the world: as the industry continues to globalise, dominant web sites will make it easier for US utilities to leverage web-based business models into success in foreign markets.

In contrast, utilities in the United Kingdom show a surprising lack of web site sophistication despite the advanced state of its competitive energy markets. On average, UK utility web sites were found to be 42 percent less functional than those in the US, a functionality level putting them on par with utilities in the much smaller Australian market.

The study compared utility web sites to each other as well as non-industry web sites generally considered to represent best practices in on-line commerce. Web sites were measured in terms of functionality (quality of content, ability to conduct transactions, range of interactivity, usefulness of content to key stakeholders) and execution (technical design of site, ease of navigation, aesthetics).

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