Utility Service Delivery Management

The conversations between senior officers and managers at utilities are similar
worldwide. They need to reduce operations and maintenance expenses, increase
the reliability and performance of the infrastructure, improve customer service,
and make better use of limited capital. At a minimum they talk about tightening
the belt. Some even talk about a desire for “transformation” or
achieving “operational excellence.”

Easy words to say, but how are such concepts realized?

The biggest single opportunity for simultaneous improvement on
all of these fronts is through service delivery management (SDM), a holistic
approach to service for optimizing your customers, assets, and workforce. It
is important to understand that this concept includes all aspects of service – customer
service, field service, design service, construction service, and maintenance
service.

Simply stated, optimization alludes to creating a state in
which the best conditions exist and the best results are achieved
at the cost everyone is willing to pay. So the key is to find a way
to deliver more for the money. Increased productivity and lowered costs must
be achieved through increasing asset performance, streamlining the supply chain,
ensuring customer satisfaction and loyalty, increasing workforce efficiency,
and maximizing overall financial performance.

A plan must be developed to determine how to change underlying practices to
produce improved results in each area.
Key processes should be instrumented to identify and provide full visibility
of key performance indicators and to trigger events such as alerts when certain
predetermined conditions are reached.

Consider the effects on the organization and the bottom line
if you could:

• Reduce operations and maintenance labor costs by 25 to
  35 percent;
• Improve system reliability and reduce the frequency of unplanned outages
  by 15 to 50 percent;
• Reduce inventory levels by 15 to 30 percent; and
• Improve customer satisfaction and loyalty.

With few exceptions, SDM offers significant opportunity to achieve results
similar to those above. Conventional approaches, focused only on discrete areas
and systems, have allowed realization of some marginal improvements, but not
at levels to actually transform the business and facilitate operational excellence.

What’s Required?

The SDM approach requires consideration of the broader context of managing
all of the business processes related to customers, assets, and workforce.
Its foundation is built on three disciplines: customer relationship management,
enterprise asset management, and workforce management.

Unlike any one of these disciplines, which tend to be customer-centric, asset-centric,
or workforce-centric, SDM is process-centric. Thus, it focuses on the business
flows within and across each discipline and optimizes these processes to achieve
new levels of performance. It is no longer enough to be just customer-centric,
just asset-centric, or just workforce-centric. You have to be process-centric.

Beyond these three disciplines in a process-centric environment, each component
of SDM should be capable of managing the entire scope of its primary entity
focus with additional critical capabilities described in Figure 1.

Customer Relationship
Management

The customer relationship management (CRM) component must manage all of the
customer interactions including all types of customers (commercial, residential,
etc.), all charges for all services regardless of origination or basis for
fees, and all regulatory environments.

An effective SDM strategy logically originates with the customer,
as the customer is most often the starting point in a service process. Accordingly,
a utility has to be able to effectively manage all customer interactions. However,
a typical utility will often take a narrow view of
the customer service lifecycle, viewing customer service as something that
occurs only in the call center. Such a perspective overlooks that
the real opportunity for improvement for customer service is beyond
the call center.

For example, from the customer perspective, quality customer service is offering
narrower appointment windows and providing guaranteed appointments. It is committing
to work within a reasonable time frame and then actually performing the task
when promised. And it is delivering electric, gas, or water service consistently
without interruption or the need to reset clocks, re-ignite pilot lights, or
use bottled water. Thus, CRM in the context of an SDM strategy would include
a focus on the processes affecting all of the utility’s explicit or implied
service level agreements – system reliability, billing accuracy, and
completion of work when promised.

Although very few utilities are able to meet today’s standards for high-quality
service, customers are beginning to have even higher expectations for the future.
Utilities are being forced to consider new service offerings, more demanding
service level agreements, and more complex contracts. Today’s acceptable
levels of performance won’t satisfy tomorrow’s customers.

Any Work, Anywhere, Anybody

The ability to manage all work types as part of a single logical service delivery
network is a second cornerstone of a sound SDM strategy. This foundation permits
a single view of all work that needs to be performed, a single record of the
asset, its history, and maintenance strategy, and a single repository for resource
skills.

SDM takes a 360-degree view of all of the work activities to be performed
and does away with the natural tendency to view work in silos. Thus, construction
service, field service, maintenance service, and so
on are considered based on the skills of the resources needed to do the work,
the processes required to complete the work, and the dependencies for parts,
equipment, and documentation. With this full-spectrum view of all the aspects
of the work to be done, new strategies can be deployed
to optimize the overall work process.

For example, consider the nature of proactive maintenance activities. An effective
SDM strategy would take advantage of other pending work tasks in close proximity
to where maintenance work needs to be performed. However, doing so requires
considerably more analysis and flexibility in determining how all the components
of work are deployed than most utilities have today.

More utilities are using third parties to execute all types of work. While
this option promises to provide productive alternatives for accomplishing the
tasks at hand, significant challenges result in determining what the
best utilization of those resources would be. Should they be used
for baseline work? Only overflow work? In what proportions? How
will the utility know if third parties are complying with service level agreements?
And, utilizing third parties creates a service network with its own complexity
that must be managed. The information flows – both to and from the third
party – must be managed so that the utility has
as much visibility of the work’s status as when it is done by the utility’s
regular employees.

Operating in real time is another opportunity for utilities. Mobile and wireless
technologies provide a tight linkage that allows the utility to communicate
work to field personnel and to receive real-time status reports and updates.
The speed at which the utility can react and understand the exact status of
jobs is dramatically improved, and the cost to gain this ability continues
to decline. However, studies show that less than 25 percent of the service
organization is utilizing mobile technology for work.

Ultimately, new options provide a great potential, but there is more complexity
to manage in order to receive the highest benefit.

‘
True’ Resource Optimization

The final essential capability of SDM is true resource optimization capabilities.
How do we ensure that we are getting the right person, with the right skills,
with the right parts, with the right information, to the right job, at the
right time? Consider even a small problem of three resources and 24 jobs to
perform. There are literally over 200 septillion potential ways to assign and
address a problem of this magnitude. Despite the obvious complexity, the tools
being used to aid in optimizing the problem are almost always manual or extremely
rudimentary. However, the potential payoff from true resource optimization
is enormous. A typical technician can spend less than 50 percent of his actual
hours “on the job, able to work.” Many spend most of their time
between work or arriving to find that things required to perform the critical
elements of the job are missing, such as the right part, someone to provide
access, etc. Increasing that percentage from 50 percent to 65 percent would
be a 30 percent improvement in productivity.

What Stops Us?

Historically, numerous environmental factors prevented utilities from achieving
transformation. One, the systems necessary to support the information and business
requirements for effective service delivery management did not exist. Systems
were not process-aware in the context of the larger focus of the SDM business
processes.

For example, work management systems were fragmented and represented by single-purpose
applications existing for each work type – one for field service, another
for construction-oriented work, and yet another for managing inspections and
maintenance activities. Finally, workforce management consisted primarily of
using manual schedule boards and the optimization that Fred, Joe, or Tom was
able to conjure on a particular day.

Due to the overall complexity involved, organizational boundaries were historically
set around groupings of like tasks and resources.
So, not only are there information silos, there are organizational silos with
each organization trying to optimize splintered parts of the organization’s
overall business operations.

Often, these organizations fail to talk to one another, and discussions are
seldom initiated on how to achieve a better solution. Even if this were attempted,
given the current state of most utility organizations and their underlying
systems, the task would be insurmountable without a commitment to real change.
The sheer complexity and cost of integrating the myriad existing systems would
prove to be confusing, overwhelming, and impractical.

This complexity continues to build as new tools and concepts emerge. Huge opportunities
exist with mobile technology, third-party contractors, and differentiated service
level agreements. However, without an SDM strategy, everyone focuses on their
own myopic priorities, and the complexity of the environment and the barriers
to transformation continue to grow and impede progress.

It’s a Beginning

SDM is an innovative approach to creating an effective management environment
in the utility industry. This approach supports the
operational excellence and transformation many utilities yearn for
but have yet to achieve. Utilities must first determine if they are committed
to making the changes in their organization, culture, and technology to achieve
a different business result than they realize
today. Those who are ready for SDM hold the keys for the utility of
the future.