Key lessons and questions for launching a new customer and billing system
Implementing a major new customer and billing (C&B) system is complex enough without running into unforeseen challenges. How can you minimize your implementation and post-launch issues?
The utilities sector is facing more disruption than most. New technologies, such as smart meters, are changing how utility usage is monitored and enabling greater control for end users, while the falling cost of alternative energy sources is breaking up the old reliance on nationalized energy grids. This increase in choice for customers has also led to a rising demand for improved, more personalized customer relations.
In a recent EY survey of utilities firms, nearly half of the respondents said they would need either a major system upgrade or an outright replacement of their customer billing systems in the next five years to support business functionality and future requirements. Those that don’t upgrade run the risk of falling even further behind the competition.
As the utilities sector continues to adapt to changing consumer demands, there are three key lessons when introducing new C&B systems. These projects are high-cost initiatives for any organization, and for utilities in particular – get it wrong, and not only can you lose revenue but, in the age of social media, it can also negatively impact your corporate and brand reputation. The risks of implementation failure have never been higher.
Lesson 1: Focus on value and minimize customization
One of the most common mistakes companies make when planning a new C&B system is trying to customize their new software as much as possible, often to try and make it work just like their existing solutions. This will result in a loss of focus on value and squandering of resources, increasing both cost and risk.
The smarter approach is to be strategic and make a quantified link between the business benefits and the processes that will deliver them. Customize only those processes that are directly related to the delivery of value in the project business case. For the rest of the billing system’s functionality, simply use the standard, “plain vanilla” solutions that come built into the software platform. EY’s experience suggests this approach can reduce complexity and lower project costs by as much as 15%–20%.
Key questions to ask:
- Are you confident that any customizations are absolutely necessary?
- Have you quantified the value that any customizations will add?
- Are the company’s top management in agreement on the area that will be customized?
Lesson 2: Reduce post-launch issues by robust planning
Organizations typically underestimate just how much operational performance may be impacted by new systems after launch. While all projects have training and change management work streams, they do not usually apply a scientific approach to analyzing the change impact.
Bear in mind that a new system won’t typically lead to faster turnaround times when the system is launched. No matter how well trained users are in the new system, they will need time to become proficient. Participants in a recent survey reported a near doubling of average call times (94%) for billing inquiries because call center employees were collecting more data and had to navigate a higher number of screens. Yes, increasing call center staff by 30% for six months will raise the cost of the implementation, but our experience shows that the costs of underestimating the extra support required are much higher.
Key questions to ask:
- Have you mapped how people’s roles and responsibilities will change, and allocated resources accordingly?
- Have you identified likely problem areas?
- Have you estimated the likely impact of non “business as usual” factors immediately after launch (e.g., reduced user proficiency, data conversion issues and system defects)?
- Do you have adequate reporting in place to be able to identify where problems are occurring?
- Have you built in organizational agility to move quickly to address any changes needed after day one?
Lesson 3: Invest in data quality
Despite the risks, many companies fail to devote enough attention to the data cleansing process. Why? Because they naively think their data is clean, because they believe the new system is superior and therefore able to deal with the data inconsistencies, or because they don’t understand the extent of the problems that dirty data can cause. But failure to fully address data quality means that your transition to the new system will be more complicated and lengthy, leading to potential delays in the overall project – it may even cause lost revenue and a negative hit to your corporate reputation.
Just one example: when a US municipal utility decided to replace its outdated, 40-year-old customer information system, thousands of incorrect bills were generated. Angry customers led to a surge in calls to helplines, with wait times of up to two hours or more worsening the situation. With staff overloaded, the collections process became overwhelmed, adding more than US$160m in uncollected bills to the company’s debt.
Key questions to ask:
- Have you allocated enough time and resources to data cleansing?
- Have you scrubbed the data and eliminated any duplicate data?
- Have you mapped the data from the existing system to the new system?
- Have you developed a robust process to handle any situations where the new system needs data not held in the current system?
Getting your system launch right
“Every program has its own challenges,” warns EY’s David Townshend. “It requires a lot of focus and is quite demanding.” You may not be able to anticipate every challenge that will need to be overcome. But by focusing on these three fundamental lessons – minimizing customization, planning for the post-launch period and investing in data quality – you will give yourself a much surer footing to adapt to, and overcome, those difficulties you may face.