With LODESTAR, Shell Energy Finds Opportunity in Competition, …mthink.com/legacy/ ·...

Robust functionality, seamless integration, and easy

customization make the LODESTAR Customer

Choice Suite™ the right back-office choice for this

marketing powerhouse.

The ChallengeEvery day, gas and electric markets in theUnited States become more competitive, asone state after another allows new players to sign up customers long locked into localpower monopolies. No one is seizing thisopportunity more aggressively than ShellEnergy Services Company (Houston, Texas) –an American marketer of energy services toresidential, small commercial, and smallindustrial accounts.

Shell needed a customer information serv-ice (CIS) solution with the robust functionality,seamless integration, and ease-of-customiza-tion required by a national retailer of energyservices. “We chose the LODESTAR CustomerChoice Suite for Retail Companies after anexhaustive review and due diligence of CISproviders for the deregulated marketplace,”stated Mark Fuller, Director of Customer Careof Shell Energy Services Company (SESCO).

“We’re getting a very comprehensive pack-age in their customer suite. We’re getting thebilling engine from them, the financials, aswell as their load forecasting and settlementpackage. And since forecasting and settlementaccuracy are a critical component of retailcompetition, we really scrutinized LODESTAR’sload forecasting and settlement software capabilities,” explained Fuller.

Tim Byers, SESCO’s Chief InformationOfficer, added, “They were the only companyable to provide us with the most cost-effectiveand lowest risk option, with a proven installbase. One key area on which we evaluated thesystem was robust functionality.”

It is key – Shell must accurately predictthe amount of power it will buy to meet thedemands of its customers. Forecast wrong,

and there are substantial penalties.“That’s why LODESTAR’s load forecasting

and settlement modules are so important,”continued Byers. “We forecast what we needbased on various statistical forecasting mod-els, then we bill the homeowner for what theyactually use, and finally we have to settle withthe transmission company. One of the reasonswe were initially attracted to LODESTAR wasbecause they had such a strong load forecast-ing and settlement package.”

Another area of strength is integration.Even though they compete, marketers andlocal utilities have to share information effi-ciently about customers – customers who mayswitch from one supplier to another or whohave their meters read by one company butare billed by another.

“If a customer leaves one of our com-petitors and comes to us, the competitorhas to switch them off and we have toswitch them on,” said Byers. “So there is all that information that has to flow backand forth. We are also getting all our meterreads from outside companies – so theyhave to be able to send the reading to us.Things like cancel and re-bill – all thosefunctions have to be very seamless. That’swhy we believe they have to come from thepackage that is the billing engine, ratherthan a separate add-on package like an ERP(Enterprise Resource Planning) product.”

Integration is also important from thestandpoint of all the other systems withwhich the CIS has to interoperate – includ-ing front-end call centers. In Shell’s case,LODESTAR integrates with Siebel’s CRM(Customer Relationship Management) soft-ware. “Both packages are state-of-the-art,”stated Byers. “We believe they will inter facecleanly, and the data flow between them willbe very clean.”

One of the benefits of the LODESTARSolution, however, was that – because it isso comprehensive – the need to integrate

with other software is minimized. “That’s abig advantage of the LODESTAR model. It’sone totally integrated solution. A lot of peoplewill use a forecasting and settlement modulefrom one company and then pick someoneelse’s product to do customer informationservices,” said Byers. “The problem withusing multiple systems,” Byers went on tosay, “is that it complicates the process ofmoving data between functions efficiently andwithout errors.”

“All of a sudden you’ve got the questionof integration between those two systems.Here, because all of the systems are byLODESTAR, they all share the same customerdatabase. That sure makes the solution a lotmore robust and the data quality should go up considerably,” said Byers.

A Robust Database Design and Rules LanguageAnother challenge of working in a national market as opposed to a single region is thatdifferent jurisdictions call for different billingplans, utility rates, and other business rulevariations. “That’s another reason we liked theLODESTAR Solution,” said Byers. “We knowLODESTAR can handle multiple jurisdictions.That’s why we did not choose one of theircompetitors. We didn’t see how it would easilyhandle multiple jurisdictions.”

“Look, no one could possibly haveeverything coded into their product when itis delivered. LODESTAR has made itextremely easy for us to create new andinnovative marketing programs,” Byersexplained. “For example, suppose you wantto offer a 50 percent off discount for natural gas during the summer months –that’s something that would be very simplefor a business analyst to configure in theLODESTAR system. With many of the othersolutions we looked at, what you would haveto do to make a change like this would beto pay a programmer or have the solution

With LODESTAR, Shell Energy FindsOpportunity in Competition, plus a Great CIS Solution

LODESTAR

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provider themselves go in and create morecustom code.”

LODESTAR’s flexibility is derived from aunique metadata approach and high-level rules language – the combination of whichallows the systems to be easily adapted to different local requirements. “We were veryimpressed by LODESTAR’s Rules Language,”stated Byers. “It enables extreme flexibility inbill calculations. We also like the fact that thesolution is metadata-driven, which means theLODESTAR data model can be easily changed,and so can the kinds of information we can add to the system.”

Even though it plans to operate nationwide,Shell Energy Services Company is committed tousing only one system for its CIS everywhere itdoes business – the LODESTAR Customer ChoiceSuite. By optimizing on a single back-end solutionnow, they can concentrate later on other things– like market expansion.

SESCO President Alan Raymond pointedout, “A lot of states haven’t even opened uptheir retail energy services markets yet. Texas,for example, won’t open up until 2002. Wewant to have our act together so when otherstates do open up we can be there with ourofferings, with our system infrastructure alreadyin place. We believe the energy marketplace is a very large opportunity for Shell. We areexcited to work with LODESTAR to capitalize onthis opportunity. They view us as not just aclient but as a business partner.”

LODESTAR’s MissionLODESTAR's mission is to provide leading e-business software to enable customer choicein the New Energy Economy. We have morethan 90 clients in North America, and we’vebeen in operation for more than 20 years.LODESTAR is a known and reliable provider ofworld-class software solutions to energyproviders to help them with pricing and billing,load profiling and settlement, and financialmanagement. LODESTAR software supports anypricing and billing scenario including pricing(using interval energy usage data) for energyproducts and service such as: electricity, gas,water, wastewater, bandwidth, etc.

LODESTAR Customer Choice Suite (CCS)LODESTAR’s CCS™ For Retail Companies provides a powerful, complete back-officeCustomer Information System (CIS) solution that seamlessly integrates with “best-in-class”Customer Relationship Management (CRM)solutions to support:• Customer Acquisition & Enrollment• Product & Service Definition• Load Profiling, Pricing & Profitability Analysis• Billing & Electronic Bill Presentment• Settlement Verification• Financial Management• Customer Care

LODESTAR’s CCS for Distribution Companiesprovides a component-based software suitedesigned to easily integrate with legacy systemsto support:• Enterprise-wide Meter Data Management• Load Profiling & Settlement• Unbundled Billing• Billing C&I Customer Contracts Using Interval

Data• Customer Care• Rate Analysis and Load Research

LODESTAR CCS for Independent SystemsOperators provides a flexible, component-basedsolution that seamlessly integrates with “best-in-class” energy management systems to support:• Registration• Load Profiling• Data Aggregation• Settlement & Billing• Financial Transfer

LODESTAR CCS for Energy Customers givescustomers full access over the Internet to allenergy usage, pricing, and billing data. It enablescustomers to:• View and Analyze Energy Usage Data• Analyze Impacts of Alternative Pricing

Programs • Optimize Energy Usage• Reduce Costs• Independently Validate All Billing Information • Receive and Pay Bill Statements. �

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www.lodestarcorp.com

Chris HamilosPresident and CEO

Jacquie ArthurVice President and CFO

Steve DoroffVP, Product Development andImplementation

Ken ReuterVP, Sales and Market Development

LODESTAR Corporation8 Essex Center DrivePeabody, MA 01960Phone 978.532.4555Fax 978.532.4567

BUSINESS CONTACT

Roxanne Tashjian Director, Sales OperationsProposalsPhone 978.573.4589roxanne_tashjian@lodestarcorp.com

CONTACT INFORMATION

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