Power Engineering International, UK: Cognizant’s Vice President of Manufacturing, Logistics, Energy & Utilities (UK & I) Says Utilities Must Combine Data Analytics and Market Segmentation to Prevent New Arrears

“Debt collection is one of the biggest challenges currently faced by utilities, particularly across energy and water, an issue heavily impacting firms’ financial performance,” says Rohit Gupta. “Despite the rise of highly-organized and regulated debt collection agencies, the problem of increasing debt has not abated.” Excerpts:

“Utilities should put new processes in place to prevent the formation of new arrears, fortified by a strong IT infrastructure. To do this, they are increasingly using analytics to fix the underlying causes of errors in their billing and CRM systems, often the root cause of debt formation.

Today, a business’s most important asset is the data it possesses.

By analyzing information from external and internal sources such as socio-demographic data or behavioral indicators from a credit reference agency, suppliers can segment customers as credit-worthy or credit-challenged and allocate appropriate collections strategies.

When managing customer debt, internal processes can be challenging for utility companies — suppliers have generally created specific sub-teams focused on handling aging debt, or alternatively outsourced debt collection to third-party service providers.

A combination of data analytics and careful market segmentation is going a long way to help suppliers track the financial status of their customers and personalize communications and the wider collection strategy accordingly.

While there is no silver bullet to counter the growing pile of debt, treating customers like humans using a more detailed understanding of their financial situation is a key step to recover aging debt and ensure that suppliers do not miss out on revenue.”

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