The winners of the European Utility Awards were announced at the Metering, Billing, CRM/CIS Europe 2005 conference and exhibition, held this year in Barcelona. The awards were established by Synergy, the organisers of the conference, and sponsored by Accenture, a global management consulting company. They were open to all European utilities and their service providers, and nominations were submitted for three categories: Business Performance, Customer Excellence and Innovation.
ENDESA Distribución Eléctrica (EDE) – Winner
In order to meet the demands of a liberalised electricity market in Spain, ENDESA Distribución Eléctrica (EDE) introduced ACAP – the Access Contracting Automation Project – to reduce the average unit costs for third party network access contracting. EDE developed its own software tools to ensure that its system complied with National Energy Commission operational procedures.
At 1 July 2005, over 1 million EDE customers had made use of the liberalised market; EDE expects there will be 2 million customers (20% of Spanish electricity users) who will change supplier each year in the years after 2010.
The average unit cost for managing an access application was 4.1 euros in 2003, and the processing capacity was 1,000 per day. If this situation had been maintained, the cost if all customers had accessed the competitive market from 2003 – 2010 would have been 45 million euros, and the system would have collapsed, unable to process an estimated 50,000 applications a day. Clearly action had to be taken.
EDE began by gaining agreement with all agents operating in its area for the implementation of standardised electronic communications formats, under the active leadership of the National Energy Commission. The utility introduced electronic management of all the operations involved in the contracting process, and created a back office which receives, processes and responds to the applications for change of provider in a centralised fashion. Internal contracting procedures also had to be adapted to the new market rules.
Because there were no computer application packages available on the market that met the needs of all parties involved in the competitive marketplace, EDE developed its own software tools, assisted by consultants Accenture and DMR. The project began in 2002, and since then a number of milestones have been achieved:
• Unit cost per contracting movement decreased by 88%.
• Number of days needed to process the access improved by 76%.
• Access application processing capacity is practically unlimited.
In addition the automation achieved by ACAP has enabled the marketing agents to reduce their access operation costs, which in turn has made an overall contribution to the cost-effective and efficient opening of the Spanish electricity market.
Thanks to ACAP, EDE expects to save 39.7 million euros from 2004 – 2010, and 7.9 million euros a year from 2011.
ebIX – Runner-up
The purpose of ebIX, the European forum for Energy Business Information eXchange, is to advance, develop and standardise the use of electronic information exchange in the energy industry. The main focus is on interchanging administrative data for the internal European markets, both wholesale and retail.
ebIX has contributed to the opening of the energy market in a growing number of countries through the development and maintenance of market business models, thereby providing standards for harmonised information exchange interfaces between the automated systems of the thousands of network operations and supply companies active in these markets.
The first version of the UML model for customer switching was published in 2001, there were subsequent additions, and in 2005 the first part of the model for the exchange of metered data was published. An integrated model version using the most recent set of core components as defined by UN/CEFACT is expected by 2007. The ebIX models are syntax-independent and can be implemented, for example, in EDIFACT or XML.
Together with the organisation for the European Transmission System Operators (ETSO) and the European Federation of Energy Traders (EFET), ebIX has developed a role model for the electricity sector which constitutes the basis for the present modelling work in these three organisations and enables the interoperability of the modelling results. The role model has already been extended to the gas sector in some countries.
The harmonisation of information exchange that has been achieved between ebIX members (Belgium, Denmark, Germany, the Netherlands, Norway, Sweden and Switzerland, plus active observers from Austria and Finland) facilitates cross-border sales activities and has been a major contributor to smooth and efficient customer switching and other information transfer to facilitate a competitive energy market in Europe. ebIX is in contact with the European energy associations and regulators, and with the utilities in other EU countries, with the goal that those countries that open their household customer markets in 2007 can benefit from ebIX’s work when they design their own automated processes. Without these processes a functioning liberalised retail market is practically impossible.
ENECO Energie – Winner
ENECO Energie is one of the largest energy companies in the Netherlands, with a market share of 23%. In order to attract and retain customers in the newly-liberalised energy market, ENECO Energie conducted extensive research into what customers wanted from their energy supplier and developed marketing and promotional campaigns to meet their needs.
ENECO recognised early on that it was difficult to develop a sustainable competitive advantage on the basis of lower prices. Consumers had been told that energy prices would drop after deregulation, and utilities advertised discounts, but the final savings often didn’t reach customer expectations.
So ENECO realised that customers could be persuaded to switch, but may soon be dissatisfied with the utility they had switched to. It introduced its “Welcome Back” campaign, which has seen tens of thousands of customers who switched to an alternative provider return to ENECO. This campaign involves mailing a letter to customers who have left ENECO inviting them to switch back, and stressing the level of service offered by ENECO, as well as the convenience of having consumption figures for both gas and electricity on one bill.
ENECO’s research revealed that customer needs were relatively simple — they wanted an assured supply of energy, with a bill that was correct, and good levels of service. Based on this, the utility developed a new advertising campaign and focused on operational processes to ensure that customer service levels were enhanced.
The utility is the only one of the three large energy companies in the Netherlands that has succeeded in increasing its market share, and together with Greenchoice is one of the only two utilities whose processes and operations are regarded as satisfactory by the regulator. ENECO Energie has reduced customer complaints by over 50% since 2004.
Severn Trent Water – Runner-up
The knowledge that the UK water industry would be deregulated in the not-too-distant future was the driving force behind Severn Trent Water’s decision to address the potential issue of customer churn. In 2003 the company launched its ICE (Improving Customer Experience) initiative – a framework-based customer handling and process automation system which is transforming the experience of the utility’s 8 million + customers.
Severn Trent Water worked with PA Consulting Group to develop the ICE system. The utility had identified that the number of contact centre procedures, which involved the use of about eight different IT systems, was having a negative impact on customers. Call centre agents were unable to give customers their full attention, as they typically had to switch between screens at least 20 times per call. Customers would have to be phoned back because the query could not be resolved at the point of contact, or work was put in a queue for back office resolution. The complexity of the systems also meant that training an agent could take up to six months.
PA provided STW with a platform to meet its strategic aim of improving the customer experience. Initially the requirement was for a front-end system for STW’s operational call centre, with the possibility of a wider process improvement initiative later. PA recommended a solution based on Graham Technology’s process framework technology. This approach meant that the new system could accurately reflect current processes, yet still be agile enough to change over time as those processes evolved.
STW is now working towards using ICE to connect all its call centres together into one large virtual call centre, a step that will deliver enormous economies of scale. Subsequently the framework will be used to automate and connect processes throughout the organisation.
Key benefits of the ICE implementation include:
• Customer point of contact resolution increased by 36%
• Customer repeat calls reduced from 10% to 4%
• Call handling time reduced by 29%
• Contact centre agent seeking advice reduced by 50%
• Contact centre agent retention improved from 67% to 84%
• Unnecessary field visits reduced from 19% to 2%.
DONG – Runner-up
DONG holds a market leader position in the Danish energy sector, which was liberalised in 2003. The utility wanted to prepare itself to withstand competition by changing the way it interacted with its customers, and undertook a repositioning exercise with the aim of increasing customer loyalty and satisfaction.
Extensive research led DONG to conclude that company image and a customer focus were the two major drivers that resulted in customer loyalty and satisfaction. Further research conducted both internally and externally revealed how staff and customers viewed the utility in 2002, and also identified the things that should change if DONG was to succeed in its aim of being regarded as the leading Danish energy company.
DONG wanted to be seen as the dynamic and innovative energy expert which constantly offered new products and services based on customer needs. Staff were trained in how to move from where the utility was to where it wanted to be; back and front office personnel were tested and trained to become more customer and sales-minded; and a wide new range of products was developed. The new values were communicated via TV commercials, direct mail, advertisements and exhibitions.
All local sponsorships were cancelled, and DONG became the sponsor of the Danish national football team. A co-ordinated communications programme explained the basis for the sponsorship, and members of the football team were integrated into advertisements, events for employees and customer hospitality events.
Today DONG is the best-known energy supplier in Denmark. When asked which utility company sprang most readily to mind, 39% of the members of a research group interviewed earlier this year chose DONG, compared with only 7% in 2002. An impressive 98% of the Danish population knows the company, compared to 81% in 2002 and perhaps as important, the company is perceived in a far more positive light. The share of B2B customers classified as loyal ambassadors has increased from 17% to 37%, while the increase for residential customers went from 47% to 56%.
Market Transformation Programme – Winner
The UK-based Technology Feasibility Study Project, developed under the auspices of the UK Market Transformation Programme, aims to assess the practicality and effectiveness of using the digital TV interactive broadcasting infrastructure to provide a secure intelligent metering system for domestic electricity consumption. The technology will help provide customers with accurate information on usage, prompting energy saving, and allow automatic billing.
For about 15 euros electricity customers can receive a kit which they can install and activate to provide consumption data on the screen of any household TV provided it is capable of monitoring an interactive digital television, satellite, cable or terrestrial broadcasting network (currently close to 12 million UK homes). In addition the system could provide consumption information through secure, live or delayed transmission to a customer’s electricity supplier for the purposes of automatic billing and correspondence.
The format of the TV display can be modified by an energy supplier at any time through the remote download of software to the digital TV reception platform, with or without the interaction of the user.
The system is capable of providing a secure path between one or any number of digital TV households and the energy supplier, for interactive communication and targeted TV messaging. This has the potential to reduce users’ electricity consumption and, for example, to influence grid loading at peak times to reduce the generating carbon index or forestall distribution overload. Metering interface solutions to include gas metering in a development phase of the initial project are also planned.
First generation digital TV platforms will soon reach the end of their useful life, to be replaced with more advanced platforms. These could easily incorporate the external data communication interfaces used in this project and those master interfaces required in the future for the remote control, of all devices contributing to the household energy load, either in-house or by an energy supplier.
Partners in this initiative are Powergen, part of E.ON UK (principal partnering energy supplier); One Click Technologies Ltd. (in-house data detection and distribution), Pace Micro Technology UK (data reception and digital TV platform software for TV metering displays) and BSkyB (British SKY Broadcasting Group — service provider, interactive broadcast network). Concept and project co-ordination is being handled by Harrison Associates Ltd., scientific consultant to the UK.
Much of the hardware, software and electronics have already been developed, and a trial involving a statistically relevant cross section of households is being urgently progressed.