As new energy utilities know too well, the challenges of establishing and growing a business in competitive energy markets are somewhat daunting, even impossible at times.  After 12 months of trading, one of the UK’s rising stars in the energy industry, Ovo Energy, has overcome many of these challenges. Now with over 30,000 customers, they have won a handful of accolades and awards and continue to rank highly in energy comparison web sites and the national press. 

Their successful approach to energy supply, their branding and their novel offerings are the result of the determination, marketing genius, and hard work of a launch team of 5 people. Yes, just 5 people! 

It takes time to set up an energy retail business, and lots of money. Something many start ups don’t have a lot of.  They have to develop a business model, hire staff, lease a building, negotiate supply contracts from the generators, develop the ideas and plan the advertising needed to compete in a tough market.  And most start ups aim high requiring an aggressive business plan, and a back office that supports rapid growth - without compromising the customer service and agility that underpin its competitiveness. 

But a limited capital expenditure budget doesn’t always stretch to a multi-million enterprise system investment. And paying complex license fees for users or consumers you don’t yet have doesn’t make good business sense.  

For start up energy retailers, a Cloud based billing solution can be one lower cost and lower risk alternative to an on-site software installation. But in the cloud, experience and confidence are everything (http://blog.gentrack.com/moving-to-the-cloud-one-measured-step-at-a-ti). However the software is deployed, ‘out the box’ or Commercial Off The Shelf Software (COTS), preconfigured for local energy market requirements is always going to give start ups a great head start.

In many cases, ‘out of the box’ software offers many of the core processes required for customer sign up, billing and customer care given they are standard across the industry. Utilities don’t need to waste time or money recreating those processes.  But to be truly competitive, start ups need flexibility to be able to configure the other 10% of business processes that support its business strategy and points of difference. And the ability to reconfigure them again and again as business demands change is essential. 

A year later, Ovo Energy continues to shake up the UK energy market with outstanding customer service and the ability to quickly rollout their innovative ideas with support from a flexible billing and CIS software platform (Ovo Energy Supplier review). Moreover, this rapid growth is underpinned with a cash flow that doesn’t keep their accountant awake at night. 

So, if you are a new energy retailer with ambitious plans, while large ERP is an option, it may not always be the best option for your business or your pocket. Look for vendors that have the software, experience and flexibility to handle your particular business model. Explore cloud, hosted and onsite installation options and make sure licensing agreements are transparent, simple and work for your business at every stage of its evolution.  

Software vendors committed to long-term partnerships understand that they will ultimately benefit from your longer term success.   The challenge now is to select the software partner with the tools and licensing models that will get you there both quickly and profitably.