Business Process Improvement

In the past, the utility industry could consider itself exempt from market drivers like those listed above. However, today’s utilities are immersed in a sea of change. Customers demand reliable power in unlimited supply, generated in environmentally friendly ways without increased cost. All the while regulators are telling consumers to “change the way they are using energy or be ready to pay more,” and the Department of Energy is calling for utilities to make significant reductions in usage by 2020 [1].

“The consumer’s concept of quality will no longer be measured by only the physical attributes of the product – it will extend to the process of how the product is made, including product safety, environmental compliance and social responsibility compliance.”

– Victor Fang, chairman of Li and Fang,
in the 2008 IBM CEO Study

If these issues are not enough, couple them with a loss of knowledge and skill due to an aging workforce, an ever-increasing amount of automation and technology being introduced into our infrastructure with few standards, tightening bond markets and economic declines requiring us to do more with less. Now more than ever the industry needs to redefine our core competencies, identify key customers and their requirements, and define processes that meet or exceed their expectations. Business process improvement is essential to ensure future success for utilities.

There is no need to reinvent the wheel and develop a model for utilities to address business process improvement. One already exists that offers the most holistic approach to process improvement today. It is not new, but like any successful management method, it has been modified and refined to meet continuously changing business needs.

It is agnostic in the way it addresses methods used for analysis and process improvement such as Lean, Six Sigma and other tools; but serves as a framework for achieving results in any industry. It is the Baldrige Criteria for Performance Excellence (see Figure 1).

The Criteria for Performance Excellence is designed to assist organizations to focus on strategy-driven performance while addressing key decisions driving both short-term and long-term organizational sustainability in a dynamic environment. Is it possible that this framework was designed for times such as these in the utility industry?

The criteria are essentially simple in design. They are broken into seven categories as shown in figure 2; leadership, strategic planning, customer focus, measurement, analysis and knowledge management, workforce focus, process management and results.

In this model, measurement, analysis and knowledge management establish the foundation. There are two triads. On the left hand side, leadership, strategic planning and customer focus make up the leadership triad. On the right hand side of the model, workforce focus, process management and results make up the results triad. The alignment and integration of these essential elements of business create a framework for continuous improvement. This model should appear familiar in concept to industry leaders; there is not a single utility in the industry that does not identify with these categories in some form.

The criteria are built to elicit a response through the use of how and what questions that ask about key processes and their deployment throughout the organization. On face value, these questions appear to be simple. However, as you respond to them, you will realize their linkage and begin to identify opportunities for improvement that are essential to future success. Leaders wishing to begin this effort should not be surprised by the depth of the questions and the relatively few members within your organization who will be able to provide complete answers.

In assessment of the model’s ability to meet utility industry needs, let’s discuss each category in greater detail, provide relevance to the utility industry and include key questions for you to consider as you begin to assess your own organization’s performance.

Leadership: Who could argue that the current demand for leadership in utilities is more critical today than ever before in our history? Changes in energy markets are bringing with them increased levels of accountability, a greater focus on regulatory, legal and ethical requirements, a need for long-term viability and sustainability, and increased expectations of community support. Today’s leaders are expected to achieve ever increasing levels of operational performance while operating on less margin than ever before.

“The leadership category examines how senior leaders’ personal actions guide and sustain the organization. Also examined are the organization’s governance system and how it fulfills legal, ethical and societal responsibilities as well as how it selects and supports key communities [2].”

Strategic Planning: Does your utility have a strategic plan? Not a dust-laden document sitting on a bookshelf or a financial budget; but a plan that identifies strategic objectives and action plans to address short and long-term goals. Our current business environment demands that we identify our core competencies (and more importantly what are not our core competencies), identify strategic challenges to organizational success, recognize strategic advantages and develop plans that ensure our efforts are focused on objectives that will ensure achievement of our mission and vision.

What elements of our business should we outsource? Do our objectives utilize our competitive advantages and core competencies to diminish organizational challenges? We all know the challenges that are both here today and await us just beyond the horizon. Many of them are common to all utilities; an aging workforce, decreased access to capital, technological change and regulatory change. How are we addressing them today and is our approach systematic and proactive or are we simply reacting to the challenges as they arise?

“The strategic planning category examines how your organization develops strategic objectives and action plans. Also examined are how your chosen strategic objectives and action plans are deployed and changed if circumstances require, and how progress is measured [2].”

Customer Focus: The success of the utility industry has been due in part to a long-term positive relationship with its customers. Most utilities have made a conscientious effort to identify and address the needs of the customer; however a new breed of customer is emerging with greater expectations, a higher degree of sensitivity to environmental issues, a diminished sense of loyalty to business organizations and overall suspicion of ethical and legal compliance.

Their preferred means of communication are quite different than the generations of loyal customers you have enjoyed in the past. They judge your performance against similar customer experiences received from organizations far beyond the traditional competitor.

You now compete against Wal-Mart’s supply chain process, Amazon.com’s payment processes and their favorite hotel chain’s loyalty rewards process. You are being weighed in the balances and in many cases found to be lacking. Worse yet, you may not have even recognized them as an emerging customer segment.

“The Customer Focus category examines how your organization engages its customers for long-term marketplace success and builds a customer-focused culture. Also examined is how your organization listens to the voice of its customers and uses this information to improve and identify opportunities for innovation [2].”

Measurement, Analysis, and Knowledge Management: The data created and maintained by GIS, CIS, AMI, SCADA and other systems create a wealth of information that can be analyzed to obtain knowledge sufficient to make rapid business decisions. However, many of these systems are incapable of or at the very least difficult to integrate with one another, leaving leaders with a lot of data but no meaningful measures of key performance. Even worse, a lack of standards related to system performance leaves many utilities that develop performance measures with a limited number of inconsistently measured comparatives from their peers.

If utilities are going to overcome the challenges of the future, it is essential that they integrate all data systems for improved accessibility and develop standards that would facilitate meaningful comparative measures. This is not to say that comparative measures do not exist, they do. However, increasing the number of utilities participating would increase our understanding of best practices and enable us to determine best-in-class performance.

“The measurement, analysis and knowledge management category examines how the organization selects, gathers, analyzes, manages and improves its data, information and knowledge assets and how it manages its information technology. The category also examines how your organization reviews and uses reviews to improve its performance [2].”

Workforce Focus: We have already addressed the aging workforce and its impact on the future of utilities. Companion challenges related to the utility workforce include the heavy benefits burdens that many utilities currently bear. Also, the industry faces a diminished interest in labor positions and the need to establish new training methods to engage a variety of generations within our workforce and ensure knowledge acquisition and retention.

The new workforce brings with it new requirements for satisfaction and engagement. The new employee has proven to be less loyal to the organization and studies show they will have many more employers before they retire than that of their predecessors. It is essential that we develop ways to identify these requirements and take action to retain these individuals or we risk increased training cost and operational issues as they seek new employment opportunities.

“The workforce focus category examines how your organization engages, manages and develops the workforce to utilize its full potential in alignment with organizational mission, strategy and action plans. The category examines the ability to assess workforce capability and capacity needs and to build a workforce environment conducive to high performance [2].”

Process Management: It is not unusual for utilities to implement new software with dramatically increased capabilities and ask the integrator to make it align with their current processes or continue to use their current processes without regard for the system’s new capabilities. Identifying and mapping key work processes can enable incredible opportunities for streamlining your organization and facilitate increased utilization of technology.

What are your utilities’ key work processes and how do you determine them and their relationship to creating customer value? These are difficult for leaders to articulate; but yet, without a clear understanding of key work processes and their alignment to core competencies and strategic advantages as well as challenges, it may be that your organization is misapplying efforts related to core competencies and either outsourcing something best maintained internally or performing effort that is better delivered by outsource providers.

“The process management category examines how your organization designs its work systems and how it designs, manages and improves its key processes for implementing these work systems to deliver customer value and achieve organizational success and sustainability. Also examined is your readiness for emergencies [2].”

Results: Results are the fruit of your efforts, the gift that the Baldrige Criteria enables you to receive from your applied efforts. All of us want positive results. Many utilities cite positive performance in measures that are easy to acquire: financial performance, safety performance, customer satisfaction. But which of these measures are key to our success and sustainability as an organization? As you answer the questions and align measures that are integral to obtaining your organization’s mission and vision, it will become abundantly clear which measures you’ll need to maintain and develop competitive comparisons and benchmarks.

“The results category examines the organization’s performance and improvement in all key areas – product outcomes, customer-focused outcomes, financial and market outcomes, workforce-focused outcomes, process-effectiveness outcomes and leadership outcomes. Performance levels are examined relative to those of competitors and other organizations with similar product offerings [2].”

A Challenge

The adoption of the Baldrige criteria is often described as a journey. Few utilities have embraced this model. However, it appears to offer a comprehensive solution to the challenges we face today. Utilities have a rich history and play a positive role in our nation. A period of rapid change is upon us. We need to shift from reacting to leading as we solve the problems that face our industry. By applying this model for effective process improvement, we can once again create a world where utilities lead the future.

References

  1. Quote from U.S. Treasury Secretary Tim Geithner as communicated in SmartGrid Newsletter
  2. Malcolm Baldrige National Quality Award, “Path to Excellence and Some path Building Tools.” www.nist.gov/baldrige.

Managing Communications Change

Change is being forced upon the utilities industry. Business drivers range from stakeholder pressure for greater efficiency to the changing technologies involved in operational energy networks. New technologies such as intelligent networks or smart grids, distribution automation or smart metering are being considered.

The communications network is becoming the key enabler for the evolution of reliable energy supply. However, few utilities today have a communications network that is robust enough to handle and support the exacting demands that energy delivery is now making.

It is this process of change – including the renewal of the communications network – that is vital for each utility’s future. But for the utility, this is a technological step change requiring different strategies and designs. It also requires new skills, all of which have been implemented in timescales that do not sit comfortably with traditional technology strategies.

The problems facing today’s utility include understanding the new technologies and assessing their capabilities and applications. In addition, the utility has to develop an appropriate strategy to migrate legacy technologies and integrate them with the new infrastructure in a seamless, efficient, safe and reliable manner.

This paper highlights the benefits utilities can realize by adopting a new approach to their customers’ needs and engaging a network partner that will take responsibility for the network upgrade, its renewal and evolution, and the service transition.

The Move to Smart Grids

The intent of smart grids is to provide better efficiency in the production, transport and delivery of energy. This is realized in two ways:

  • Better real-time control: ability to remotely monitor and measure energy flows more closely, and then manage those flows and the assets carrying them in real time.
  • Better predictive management: ability to monitor the condition of the different elements of the network, predict failure and direct maintenance. The focus is on being proactive to real needs prior to a potential incident, rather than being reactive to incidents, or performing maintenance on a repetitive basis whether it is needed or not.

These mechanisms imply more measurement points, remote monitoring and management capabilities than exist today. And this requires a greater reliance on reliable, robust, highly available communications than has ever been the case before.

The communications network must continue to support operational services independently of external events, such as power outages or public service provider failure, yet be economical and simple to maintain. Unfortunately, the majority of today’s utility communications implementations fall far short of these stringent requirements.

Changing Environment

The design template for the majority of today’s energy infrastructure was developed in the 1950s and 1960s – and the same is true of the associated communications networks.

Typically, these communications networks have evolved into a series of overlays, often of different technology types and generations (see Figure 1). For example, protection tends to use its own dedicated network. The physical realization varies widely, from tones over copper via dedicated time division multiplexing (TDM) connections to dedicated fiber connections. These generally use a mix of privately owned and leased services.

Supervisory control and data acquisitions systems (SCADA) generally still use modem technology at speeds between 300 baud to 9.6k baud. Again, the infrastructure is often copper or TDM running as one of many separate overlay networks.

Lastly, operational voice services (as opposed to business voice services) are frequently analog on yet another separate network.

Historically, there were good operational reasons for these overlays. But changes in device technology (for example, the evolution toward e-SCADA based on IP protocols), as well as the decreasing support by communications equipment vendors of legacy communications technologies, means that the strategy for these networks has to be reassessed. In addition, the increasing demand for further operational applications (for example, condition monitoring, or CCTV, both to support substation automation) requires a more up-to-date networking approach.

Tomorrow’s Network

With the exception of protection services, communications between network devices and the network control centers are evolving toward IP-based networks (see Figure 2). The benefits of this simplified infrastructure are significant and can be measured in terms of asset utilization, reduced capital and operational costs, ease of operation, and the flexibility to adapt to new applications. Consequently, utilities will find themselves forced to seriously consider the shift to a modern, homogeneous communications infrastructure to support their critical operational services.

Organizing For Change

As noted above, there are many cogent reasons to transform utility communications to a modern, robust communications infrastructure in support of operational safety, reliability and efficiency. However, some significant considerations should be addressed to achieve this transformation:

Network Strategy. It is almost inevitable that a new infrastructure will cross traditional operational and departmental boundaries within the utility. Each operational department will have its own priorities and requirements for such a network, and traditionally, each wants some, or total, control. However, to achieve real benefits, a greater degree of centralized strategy and management is required.

Architecture and Design. The new network will require careful engineering to ensure that it meets the performance-critical requirements of energy operations. It must maintain or enhance the safety and reliability of the energy network, as well as support the traffic requirements of other departments.

Planning, Execution and Migration. Planning and implementation of the core infrastructure is just the start of the process. Each service requires its own migration plan and has its own migration priorities. Each element requires specialist technical knowledge, and for preference, practical field experience.

Operation. Gone are the days when a communications failure was rectified by sending an engineer into the field to find the fault and to fix it. Maintaining network availability and robustness calls for sound operational processes and excellent diagnostics before any engineer or technician hits the road. The same level of robust centralized management tools and processes that support the energy networks have to be put in place to support communications network – no matter what technologies are used in the field.

Support. Although these technologies are well understood by the telecommunications industry, they are likely to be new to the energy utilities industry. This means that a solid support organization familiar with these technologies must be implemented. The evolution process requires an intense level of up-front skills and resources. Often these are not readily available in-house – certainly not in the volume required to make any network renewal or transformation effective. Building up this skill and resource base by recruitment will not necessarily yield staff that is aware of the peculiarities of the energy utilities market. As a result, there will be significant time lag from concept to execution, and considerable risk for the utility as it ventures alone into unknown territory.

Keys To Successful Engagement

Engaging a services partner does not mean ceding control through a rigid contract. Rather, it means crafting a flexible relationship that takes into consideration three factors: What is the desired outcome of the activity? What is the best balance of scope between partner assistance and in-house performance to achieve that outcome? How do you retain the flexibility to accommodate change while retaining control?

Desired outcome is probably the most critical element and must be well understood at the outset. For one utility, the desired outcome may be to rapidly enable the upgrade of the complete energy infrastructure without having to incur the upfront investment in a mass recruitment of the required new communications skills.

For other utilities, the desired outcome may be different. But if the outcomes include elements of time pressure, new skills and resources, and/or network transformation, then engaging a services partner should be seriously considered as one of the strategic options.

Second, not all activities have to be in scope. The objective of the exercise might be to supplement existing in-house capabilities with external expertise. Or, it might be to launch the activity while building up appropriate in-house resources in a measured fashion through the Build-Operate- Transfer (BOT) approach.

In looking for a suitable partner, the utility seeks to leverage not only the partner’s existing skills, but also its experience and lessons learned performing the same services for other utilities. Having a few bruises is not a bad thing – this means that the partner understands what is at stake and the range of potential pitfalls it may encounter.

Lastly, retaining flexibility and control is a function of the contract between the two parties which should be addressed in their earliest discussions. The idea is to put in place the necessary management framework and a robust change control mechanism based on a discussion between equals from both organizations. The utility will then find that it not only retains full control of the project without having to take day-to-day responsibility for its management, but also that it can respond to change drivers from a variety of sources – such as technology advances, business drivers, regulators and stakeholders.

Realizing the Benefits

Outsourcing or partnering the communications transformation will yield benefits, both tangible and intangible. It must be remembered that there is no standard “one-size-fits-all” outsourcing product. Thus, the benefits accrued will depend on the details of the engagement.

There are distinct tangible benefits that can be realized, including:

Skills and Resources. A unique benefit of outsourcing is that it eliminates the need to recruit skills not available internally. These are provided by the partner on an as-needed basis. The additional advantage for the utility is that it does not have to bear the fixed costs once they are no longer required.

Offset Risks. Because the partner is responsible for delivery, the utility is able to mitigate risk. For example, traditionally vendors are not motivated to do anything other than deliver boxes on time. But with a well-structured partnership, there is an incentive to ensure that the strategy and design are optimized to economically deliver the required services and ease of operation. Through an appropriate regime of business-related key performance indicators (KPIs), there is a strong financial incentive for the partner to operate and upgrade the network to maintain peak performance – something that does not exist when an in-house organization is used.

Economies of Scale. Outsourcing can bring the economies of scale resulting from synergies together with other parts of the partner’s business, such as contracts and internal projects.

There also are many other benefits associated with outsourcing that are not as immediately obvious and commercially quantifiable as those listed above, but can be equally valuable.

Some of these less tangible benefits include:

Fresh Point of View. Within most companies, employees often have a vested interest in maintaining the status quo. But a managed services organization has a vested interest in delivering the best possible service to the customer – a paradigm shift in attitude that enables dramatic improvements in performance and creativity.

Drive to Achieve Optimum Efficiency. Executives, freed from the day-to-day business of running the network, can focus on their core activities, concentrating on service excellence rather than complex technology decisions. To quote one customer, “From my perspective, a large amount of my time that might have in the past been dedicated to networking issues is now focused on more strategic initiatives concerned with running my business more effectively.”

Processes and Technologies Optimization. Optimizing processes and technologies to improve contract performance is part of the managed services package and can yield substantial savings.

Synergies with Existing Activities Create Economies of Scale. A utility and a managed services vendor have considerable overlap in the functions performed within their communications engineering, operations and maintenance activities. For example, a multi-skilled field force can install and maintain communications equipment belonging to a variety of customers. This not only provides cost savings from synergies with the equivalent customer activity, but also an improved fault response due to the higher density of deployed staff.

Access to Global Best Practices. An outsourcing contract relieves a utility of the time-consuming and difficult responsibility of keeping up to speed with the latest thinking and developments in technology. Alcatel-Lucent, for example, invests around 14 percent of its annual revenue into research and development; its customers don’t have to.

What Can Be Outsourced?

There is no one outsourcing solution that fits all utilities. The final scope of any project will be entirely dependent on a utility’s specific vision and current circumstances.

The following list briefly describes some of the functions and activities that are good possibilities for outsourcing:

Communications Strategy Consulting. Before making technology choices, the energy utility needs to define the operational strategy of the communications network. Too often communications is viewed as “plug and play,” which is hardly ever the case. A well-thought-out communications strategy will deliver this kind of seamless operation. But without that initial strategy, the utility risks repeating past mistakes and acquiring an ad-hoc network that will rapidly become a legacy infrastructure, which will, in turn, need replacing.

Design. Outsourcing allows utilities to evolve their communications infrastructure without upfront investment in incremental resources and skills. It can delegate responsibility for defining network architecture and the associated network support systems. A utility may elect to leave all technological decisions to the vendor and merely review progress and outcomes. Or, it may retain responsibility for technology strategy, and turn to the managed services vendor to turn the strategy into architecture and manage the subsequent design and project activities.

Build. Detailed planning of the network, the rollout project and the delivery of turnkey implementations all fall within the scope of the outsourcing process.

Operate, Administer and Maintain. Includes network operations and field and support services:

  • Network Operations. A vendor such as Alcatel-Lucent has the necessary experience in operating Network Operations Centers (NOCs), both on a BOT and ongoing basis. This includes handling all associated tasks such as performance and fault monitoring, and services management.
  • Network and Customer Field Services. Today, few energy utilities consider outside maintenance and provisioning activities to be a strategic part of their business and recognize they are prime candidates for outsourcing. Activities that can be outsourced include corrective and preventive maintenance, network and service provisioning, and spare parts management, return and repair – in other words, all the daily, time-consuming, but vitally important elements for running a reliable network.
  • Network Support Services. Behind the first-line activities of the NOC are a set of engineering support functions that assist with more complex faults – these are functions that cannot be automated and tend to duplicate those of the vendor’s. The integration and sharing of these functions enabled by outsourcing can significantly improve the utility’s efficiency.

Conclusion

Outsourcing can deliver significant benefits to a utility, both in terms of its ability to invest in and improve its operation and associated costs. However, each utility has its own unique circumstances, specific immediate needs, and vision of where it is going. Therefore, each technical and operational solution is different.

Alcatel-Lucent Your Smart Grid Partner

Alcatel-Lucent offers comprehensive capabilities that combine Utility industry – specific knowledge and experience with carrier – grade communications technology and expertise. Our IP/MPLS Transformation capabilities and Utility market – specific knowledge are the foundation of turnkey solutions designed to enable Smart Grid and Smart Metering initiatives. In addition, Alcatel-Lucent has specifically developed Smart Grid and Smart Metering applications and solutions that:

  • Improve the availability, reliability and resiliency of critical voice and data communications even during outages
  • Enable optimal use of network and grid devices by setting priorities for communications traffic according to business requirements
  • Meet NERC CIP compliance and cybersecurity requirements
  • Improve the physical security and access control mechanism for substations, generation facilities and other critical sites
  • Offer a flexible and scalable network to grow with the demands and bandwidth requirements of new network service applications
  • Provide secure web access for customers to view account, electricity usage and billing information
  • Improve customer service and experience by integrating billing and account information with IP-based, multi-channel client service platforms
  • Reduce carbon emissions and increase efficiency by lowering communications infrastructure power consumption by as much as 58 percent

Working with Alcatel-Lucent enables Energy and Utility companies to realize the increased reliability and greater efficiency of next-generation communications technology, providing a platform for, and minimizing the risks associated with, moving to Smart Grid solutions. And Alcatel-Lucent helps Energy and Utility companies achieve compliance with regulatory requirements and reductions in operational expenses while maintaining the security, integrity and high availability of their power infrastructure and services. We build Smart Networks to support the Smart Grid.

American Recovery and Reinvestment Act of 2009 Support from Alcatel-Lucent

The American Recovery and Reinvestment Act (ARRA) of 2009 was adopted by Congress in February 2009 and allocates $4.5 billion to the Department of Energy (DoE) for Smart Grid deployment initiatives. As a result of the ARRA, the DoE has established a process for awarding the $4.5 billion via investment grants for Smart Grid Research and Development, and Deployment projects. Alcatel-Lucent is uniquely qualified to help utilities take advantage of the ARRA Smart Grid funding. In addition to world-class technology and Smart Grid and Smart Metering solutions, Alcatel-Lucent offers turnkey assistance in the preparation of grant applications, and subsequent follow-up and advocacy with federal agencies. Partnership with Alcatel-Lucent on ARRA includes:

  • Design Implementation and support for a Smart Grid Network
  • Identification of all standardized and unique elements of each grant program
  • Preparation and Compilation of all required grant application components, such as project narratives, budget formation, market surveys, mapping, and all other documentation required for completion
  • Advocacy at federal, state, and local government levels to firmly establish the value proposition of a proposal and advance it through the entire process to ensure the maximum opportunity for success

Alcatel-Lucent is a Recognized Leader in the Energy and Utilities Market

Alcatel-Lucent is an active and involved leader in the Energy and Utility market, with active membership and leadership roles in key Utility industry associations, including the Utility Telecom Council (UTC), the American Public Power Association (APPA), and Gridwise. Gridwise is an association of Utilities, industry research organizations (e.g., EPRI, Pacific Northwest National Labs, etc.), and Utility vendors, working in cooperation with DOE to promote Smart Grid policy, regulatory issues, and technologies (see www.gridwise.org for more info). Alcatel-Lucent is also represented on the Board of Directors for UTC’s Smart Network Council, which was established in 2008 to promote and develop Smart Grid policies, guidelines, and recommended technologies and strategies for Smart Grid solution implementation.

Alcatel-Lucent IP MPLS Solution for the Next Generation Utility Network

Utility companies are experienced at building and operating reliable and effective networks to ensure the delivery of essential information and maintain flawless service delivery. The Alcatel-Lucent IP/MPLS solution can enable the utility operator to extend and enhance its network with new technologies like IP, Ethernet and MPLS. These new technologies will enable the utility to optimize its network to reduce both CAPEX and OPEX without jeopardizing reliability. Advanced technologies also allow the introduction of new Smart Grid applications that can improve operational and workflow efficiency within the utility. Alcatel-Lucent leverages cutting edge technologies along with the company’s broad and deep experience in the utility industry to help utility operators build better, next-generation networks with IP/MPLS.

Alcatel-Lucent has years of experience in the development of IP, MPLS and Ethernet technologies. The Alcatel-Lucent IP/MPLS solution offers utility operators the flexibility, scale and feature sets required for mission-critical operation. With the broadest portfolio of products and services in the telecommunications industry, Alcatel-Lucent has the unparalleled ability to design and deliver end-to-end solutions that drive next-generation utility networks.

About Alcatel-Lucent

Alcatel-Lucent’s vision is to enrich people’s lives by transforming the way the world communicates. As a leader in utility, enterprise and carrier IP technologies, fixed, mobile and converged broadband access, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable compelling communications services for people at work, at home and on the move.

With 77,000 employees and operations in more than 130 countries, Alcatel-Lucent is a local partner with global reach. The company has the most experienced global services team in the industry, and Bell Labs, one of the largest research, technology and innovation organizations focused on communications. Alcatel-Lucent achieved adjusted revenues of €17.8 billion in 2007, and is incorporated in France, with executive offices located in Paris.

Helping North American Utilities Transform the Way They Do Business

Utilities are facing a host of challenges ranging from environmental concerns, aging infrastructure and systems, to Smart Grid technology and related program decisions. The future utility will be required to find effective solutions to these challenges, while continuing to meet the increasing expectations of newly empowered consumers. This brings an opportunity to create stronger, more profitable relationships with customers, and to do so more cost effectively.

Since our formation in 1996 as the subsidiary of UK-based United Utilities Plc., Vertex Business Services has grown to serve over 70 North American utilities and retail energy clients, who in turn serve over 23 million end-use customers. Our broad portfolio of Business Process Outsourcing (BPO) and Information Technology (IT) solutions enables our clients to more effectively manage operational costs, improve efficiencies, develop front-line employees, and achieve superior customer experience.

Improving Utility Collection Performances

Utilities can greatly benefit from the debt management practices and experience of industries such as banking and retail that have developed a more sophisticated skill set. Benefits can come from adoption of proven methodologies for managing accounts receivable and managing outsourced agency collections business processes, as well as from the use of appropriate software for these processes. There is also benefit to using analytical tools to evaluate the process of collections and optimizing processes based on metrics collected.

Improve your collection rates and lower outstanding accounts receivable through Vertex’s proven collection services. Our rich heritage results in our ability to implement best practices and provide quality reporting strategies, ironclad credit and collection processes, and innovative training programs.

Handling Demand Response and Efficiency In the Call Center

In the next five to 10 years, utilities will be forced to change more than at any time in their previous history. These changes will be profound, widespread and will affect not only utilities themselves, but virtually all parts of our modern electrified culture. One of the most dramatic changes will be in the traditional relationship between utilities and their customers, especially at the residential level. Passive electricity "rate payers" are about to become very active participants in the relationship with their utility.

Cutting-Edge Communication: Streamlining Customer Contact With Automated Messaging

Improving cash flow, reducing costs, freeing up agents, experiencing an immediate return on investment: These are what it’s all about, right? Since 1992, TeleVox has been at the forefront of customer communication, offering best-of-breed communication technology. More than 14,000 clients rely on TeleVox each and every day to efficiently and effectively contact their customers. Why? Because the subscription-based HouseCalls automated messaging system has proven to meet all their objectives for only pennies per call.

There’s no denying the positive impact of clear, dependable communication between a utility and its customers. Over the years, however, this has presented an increasingly difficult challenge. Utilities are being asked to communicate with growing customer bases with fewer resources. To help reverse this trend, automated messaging technologies, such as TeleVox’s HouseCalls, have emerged to play an important role in customer contact. As other messaging providers have battled rigid pricing structures, limited calling capacity and functionality challenges, HouseCalls has consistently performed as a cost-effective solution that meets the needs of each individual client.

COLLECTIONS

Nowhere are the benefits of automated messaging technology more apparent than in collections. HouseCalls delivers payment reminders personalized with names, dates, amounts due and other information. Messages also employ multiple levels of right-party verification to protect the customer. Once the message is delivered, the customer can take advantage of response options to speak with a live agent or transfer to an automated third-party credit card acceptance company. When matched with a third-party collector, HouseCalls automates the entire collections process without manual intervention from the utility.

Utilities can determine their own strategy when integrating automated messaging into the collections process. The messages sent to customers can vary in tone and content based on internal credit ratings and scores. Many TeleVox clients use HouseCalls to contact large volumes of newly delinquent accounts (30 to 60 days), hoping to resolve them before they age further. This frees agents to focus on more difficult accounts.

The immediate ROI of automated messaging in collections has made it a widely embraced practice among the nation’s leading utilities for reducing Accounts Receivable. Some utilities have estimated as much as $200 in return for every dollar spent. The technology’s flexibility facilitates quicker, less expensive collections efforts. It also decreases expensive mailings, costly disconnects and truck rolls that become necessary as delinquencies progress.

MARKETING CAMPAIGNS

From billing to usage issues, the range of programs utilities offer to customers has become increasingly broad. Automated calls have experienced phenomenal response rates from customers eager to take advantage of new offerings.

Common marketing campaigns include:

  • Budget billing
  • Low-income housing assistance
  • Meter replacement
  • Demand conservation

Why do automated calls produce greater results than direct-mail pieces, bill stuffers or Emails? One factor is audience attention. Since HouseCalls outbound messages can be recorded using 100 percent human voices and feature the Caller ID number of the utility, customers are more likely to listen to the telephone message than read an extra piece of mail. During the message, many utilities give customers the opportunity to transfer to live agents to learn more about the particular program, enroll during the call or be directed to a website for more information.

Calls cost pennies to deliver, far less than the soaring printing and postage costs associated with mailed media. Whether employed as a stand-alone marketing strategy or combined with direct mail, automated messaging proves to be a cost-effective promotional tool.

OUTAGE AND RESTORATION NOTIFICATIONS

In the utility industry, the old saying holds true: Expect the unexpected. A little preparation goes a long way toward instilling customer confidence, and this certainly applies to service outages. It’s inevitable that at some point customers are going to experience unavoidable interruptions in their service.

When that happens, leading utilities can proactively communicate with customers and keep them informed of the progress being made to restore service in the area. Automated messaging is ideal for such situations, covering large service territories (able to reach as many as 300,000 customers per hour) while maintaining a high capability of customer interaction. Messages can be created and delivered in as little as five minutes.

During outages, customers will often receive messages from their utilities reassuring them that technicians are working to restore service. Providing important contact numbers and information can also be helpful to customers during this period.

As restoration efforts progress, utilities can deliver messages to each customer to determine if service has been restored. Automated messages allow for immediate customer feedback and significantly reduce inbound traffic to the utility’s call center.

In some situations, utilities contact their customer base before a planned outage. This approach is especially appreciated when working with critical-care customers.

HOUSECALLS BENEFITS

Since HouseCalls is a subscription-based ASP (Application Service Provider) solution hosted by TeleVox, there are no hardware purchases or capital investments for the utility. Rather than requiring large expenditures for on-site equipment, utilities are charged on a per-call basis for completed calls – with no cost for undeliverables.

NEXT STEPS

To begin harnessing the power of HouseCalls for your customer communication, you are encouraged to contact a TeleVox representative at 1-800-644-4266 or info@televox.com. You may also visit TeleVox online at www.televox.com.