A newly deregulated, fragmented utilities industry is driving customer relationship management (CRM) outsourcing sales, according to a recent report by Accenture. There are roughly 400 utilities in North America, and many are searching for ways to differentiate themselves with customers for the first time. On the other hand, utilities aren't immune to the greater economic environment -- they must find ways to cut costs.

Signing off on a multi-million dollar CRM information system that spans marketing, sales and customer service is a bit unrealistic, says Bill Morris, managing partner of the resources industry at Accenture. "They have to invest in their own capabilities, and outsourcing is cheaper," he says, adding, "We're seeing a greater insurgence in outsourcing."

For utilities, CRM embodies nearly 40 interrelated capabilities, such as promotional techniques, channel-management software, sales force automation systems and software that manages large accounts, reports Accenture. And 31 of the 59 capabilities were found to contribute positively to pretax profit. The Accenture study concluded that close to 80 percent of the difference in pre-tax profit can be explained by differences in customer service, marketing and sales capabilities.

All of this has prompted Accenture to build up its CRM outsourcing practice. The Accenture-CustomerWorks joint subsidiary, for instance, will provide outsourced customer-management services to North American utilities. Its facilities will be based in Canada, in order to keep operational costs down. Customers include BC Gas Utility, Enbridge Consumers Gas, Enbridge Gas New Brunswick and Enbridge Services, which was recently acquired by Centrica.

More than just technology, CustomerWorks will provide labor-relations management and contend with peaks and valleys in call-center traffic. The biggest challenge, says Dwight Willett, CEO of CustomerWorks, will be serving an industry whose companies must adhere to different constituencies and regulations. "This means we can't build a single platform and aggregate everyone," Willett says.

Accenture has shown success in the utilities outsourcing market, most recently signing a deal with BC Hydro that calls for creating an entity to handle nearly all of BC Hydro's IT needs. Regarding the deal, BC Hydro Chairman and CEO Larry Bell stated: "This is the next step toward creating an entity that will maintain BC Hydro's mandates of providing exceptional customer service while decreasing costs."