Direct Energy powers up order-to-cash capabilities

Toronto-based Direct Energy has begun implementing a new business process management system from Santa Clara, Calif.-based Savvion to revamp its order management process.

The energy company’s order-to-cash process manages transactions from potential sales leads to established customers. This process can deal with servicing or invoicing as well as the actual payment of cash. Direct Energy executives said they needed an effective way to capture an order, provisioning that order, turning the power on and doing it all at the right time.

“Most businesses, especially ours, are really information management businesses,” Sanjay Acharya, senior director of process engineering at Direct Energy, said. “If you leave buzzwords aside, what we’re doing is taking data and moving it around. We process it, pass it off to different parties both internally and externally and create value from doing so.”

Acharya said that the problem for Direct Energy was that the information flow, as it relates to the order management chain, was often interrupted, stalled, and duplicated. He said the problems occur in the handoffs from one department to another, and often times, companies without a solid management system will have trouble pinpointing where a particular order is in the chain.

“With the new BPM system, more than anything you know what’s going on,” Acharya said. “That gives you a new capability to understand your operations.”

Patrick Morrissey, senior vice-president of marketing at Savvion, said that effectively dealing with this type of information flow is a challenge for most companies.

“It doesn’t matter whether you are in the business of providing energy services, or you are a manufacturing company producing routers, or you’re General Motors producing cars,” Morrissey said. “Everybody is struggling with how they can make order management more seamless, how they can offer it with more flexibility, and how it can be done with the realities of their existing IT infrastructure.”

And according to Savvion, the problem gets worse as an organization starts to get larger and creates numerous silos to deal with operational problems. Despite this, Rob Risany, director of product marketing at Savvion, said that the senior levels of many large organizations often think of order management process as simple one.

“They say, ‘we build products, we ship products, and we get money for our products,’” Risany said. “But, the reality is that as you start to break that down into its components and pieces, it’s often a very complex coordination of activities. And often by people who are in different countries and are certainly motivated by different personal performance issues.”

Direct Energy said that it still has some work to go in implementing the solution, with modelling completed on five of their eight biggest business units. But even though the project hasn’t been fully completed, Acharya said the preliminary work has already paid off.

“The thing that Savvion’s really helped us with is to see this thing from the beginning to end, so we know where the problems are, where the bottlenecks are, where the costs are, and where the opportunity for improvements are,” Acharya said. “Even though we haven’t delivered out first application yet, just doing the modeling has been worth the effort thus far.”

Dexter Borbe, senior management of process engineering at Direct Energy, said that BPM has allowed the firm to not only model activities, but also model the different types of parameters that go behind these activities.

“Although this requires discipline and rigor, it ends up delivering better insight into how the actual work processes are being conducted,” Borbe said.

Direct Energy has used the Savvion Process Modeler, which is available free to download, for the modelling stage. The energy company will also be using Savvion BusinessManager to implement the applications.

“We made the Modeler available for free to try and lower the barriers for some companies and start the conversation,” Morrissey said. “We see a consistent theme globally and I think that companies are only starting to become aware of process management as a discipline. All the existing vendors talk process. The CRM vendors talk process and the big application vendors like Oracle and SAP talk process, but the reality is you have to build a custom solution yourself and that doesn’t exist in most products.”

And according to Savvion, once a company starts thinking this way the disconnect between IT and the rest of the business can be bridged. Morrissey said that both sides can work together, specify the process and the associated information that’s required to get to the solution quickly.

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