Customer Service Information Technology 2016 Benchmarking Insights Conference Boulder, CO

Agenda Overview Coverage of the Study for CS IT Performance Profiles Cost 2016 Benchmarking Results Functional-specific findings Technology Applications Multi-Channel Adoption CIS Integration: Credit, Outage, Field Service Areas of Focus and Opportunity

Overview

Coverage of the 2016 Customer Service Benchmark Study Field Service Change of Account Billing Field Orders (meter investigations) Credit Field Orders Order Management Customer Contact Contact Center Local Office Self Service Contractors Credit Inbound calls Revenue Management Credit Office and Outbound calls Credit Field and Inbound Contact Policies Revenue Protection: Office and Field Back Office Billing Billing Field Policies Payment Processing Meter Reading Manual Mobile AMR Fixed Network AMI CS Support and CS IT Employees: Safety, Staffing Customer: Customer Satisfaction, First Contact Resolution, Customer Experience, Key Account Management, Energy Efficiency , Outage Communications Areas excluded: Meter Change-out

Functional Cost Model – CS IT and CIS costs Our approach to collecting cost, performance and staffing information follows customer transactions through each functional area. CIS CS IT

CIS vs. CS IT Costs CS IT (as part of “Technology” cost) is all the encompassing technology in a broad sense so it includes any non-CIS and may include some CIS, but is specific to a functional area for example: ACD, IVR, Work Management, Mobile Data are part of CS IT and belong in their respective functional area (ACD to Contact Center etc.) If there is a DIRECT allocation or charge to a function of CIS charges (such as usage or system utilization), then that goes into the CS IT, otherwise it is part of CIS Does not include any capital costs, just O&M CIS is the system used to to maintain customer information, generate bills, issue service requests, and help “manage” customer relationships by providing utility representatives data, information and insight about each customer's accounts, individual needs and preferences. Examples of vendor's products include: Accenture's C/1 (Customer-1), Oracle Utilities Customer Care, SAP For Utilities. CIS costs may be costs allocated to or associated with Customer Service but not to specific functions, such as usage charges, data transfer charges, and/or system maintenance charges. If such charges cannot be allocated to a specific function, they would go into the CIS cost column. Everything else such as the Work Management, Mobile Data, Dispatch, ACD, IVR is Customer Service IT and should be specific to a function

CIS vs. CS IT Costs CS IT (as part of “Technology” cost) is all the encompassing technology in a broad sense so it includes any non-CIS and may include some CIS, but is specific to a functional area for example: ACD, IVR, Work Management, Mobile Data are part of CS IT and belong in their respective functional area (ACD to Contact Center etc.) If there is a DIRECT allocation or charge to a function of CIS charges (such as usage or system utilization), then that goes into the CS IT, otherwise it is part of CIS CIS is the system used to to maintain customer information, generate bills, issue service requests, and help “manage” customer relationships by providing utility representatives data, information and insight about each customer's accounts, individual needs and preferences. Examples of vendor's products include: Accenture's C/1 (Customer-1), Oracle Utilities Customer Care, SAP For Utilities. CIS costs may be costs allocated to or associated with Customer Service but not to specific functions, such as usage charges, data transfer charges, and/or system maintenance charges. If such charges cannot be allocated to a specific function, they would go into the CIS cost column. Everything else such as the Work Management, Mobile Data, Dispatch, ACD, IVR is Customer Service IT and should be specific to a function

Technology Cost Within Function Any technology specifically used for a function such as meter reading devices, mobile data technology, telephone switch or call routing software, call monitoring software etc. Contact Center: IVR (Interactive Voice Response) ACD (Automatic Call Distributor) Scheduling Software Workforce Management (WFM) Multi-channel processing Web, Social Media technology costs VOIP (Voice Over Internet Protocol) Web/email routers Virtual Hold technology costs 3rd party applications (OMS interface etc.) Field: Mobile data (software and hardware) Scheduling GPS (Global Positioning System) Routing software Dispatching software Revenue Protection Tamper plug Data mining and analytics for revenue protection software Meter: Handhelds Routing software Remote disconnect MV 90 GPS (Global Positioning System) Bills: Inserters Web/email, bill presentment C/I billing software O&M costs associated w/ mobile billing Payment: Image processer Slitter/sorter Interface w/kiosks Routing software for off-site payments Payment Kiosks Credit: Behavioral scoring Predictive dialer Credit optimization software 8

Performance Profile Cost

Median* CIS Costs represent $2.34 of the $34.91 Median Cost, or 6.7% TOTAL CUSTOMER SERVICE COST (EXCLUDING WRITE-OFFS, P&B, OVERHEADS) PER ACCOUNT * Commodity Median* CIS Costs represent $2.34 of the $34.91 Median Cost, or 6.7% CIS Costs have been in the range of 5-8% CS costs (ex Write-offs) over the past 4 years Companies 30, 41, 42 and 49 report significantly higher costs Mean $40.05 Quartile 1 $31.55 Quartile 2: $34.91 Quartile 3: $41.37 FL5 Not reporting CIS costs: 23, 33, 35, and 44 * Mean costs are 13% including all reporting companies

CIS COST PER ACCOUNT * COMMODITY Mean of $5.20 per Account * Commodity represents a significant increase over over 2015’s mean Mean cost driven by significant reported O&M by 5 companies Median costs are flat versus 2015 Several companies report few/no CIS costs Companies within the same holding company structure should be able to discuss and explain variability in costs Mean $5.20 Quartile 1 $2.26 Quartile 2: $2.34 Quartile 3: $3.46 IT Page 2– FL5 Not reporting CIS costs: 23, 33, 35, and 44

Benchmarking Results Functional-specific findings Technology Applications Multi-Channel Adoption

Technology Application Profile: Changes and Recent Upgrades CIS Systems Installed (DC115)…upgrades are continuing In the past 3 years, companies in our Community have moved away from mainframe-based systems of the 90’s and early 2000’s toward much more flexible systems, allowing for more data capture and use Mean age of install or upgrade= 2008 Newer systems have been primarily SAP Recent implementations or upgrades are Companies 29, 30, 41, 49, 50 and 51 2/3 of our companies have installed new IVRs or major upgrades since 2012; 10 of 12 companies reporting have installed new Automated Call Distribution (ACD) since 2012 7 of 11 companies reporting have installed new Work Force Management (WFM) 12 of 12 reporting have new Quality Monitoring Systems since 2012 6 companies have new Meter Data Management systems since 2012 10 companies have implemented new text messaging/SMS systems since 2013 Numerous changes in mobile, web, and multi-channel management are also coming for at least 7 companies in the next 2 years (see next slides) Contact Handling and Management (DC115)…most companies now have IVRs that have been implemented in the past 2-3 years. Other contact handling and management systems (ACD, WFM, QM), are also new as are Quality Monitoring Multi-channel technology applications (IT10) Report: CS IT and Operational

CUSTOMER INFORMATION SYSTEM: YEAR INSTALLED Or Last Major Upgrade Oracle SAP Accenture C-1 In-House Cayenta (Harris) DC115 Company 42 and 44 did not provide The average year of install/upgrade of the CIS in our Community is 2008 Migration and transition time periods are 2-3 years…how are companies leveraging? Impact of systems on companies ability to mine and capture data, have flexible reporting and integrate with new applications should be noted

Interactive Voice Response (IVR): YEAR INSTALLED Or Major Upgrade Centurion Siemens Avaya TFCC Nuance In-House West DC115 Avaya Avaya Avaya The median year of install/upgrade of the IVR in our Community is 2012 At least 1/3 of the companies have installed new IVRs 3 years What cost and live call reduction benefits have been derived? What are we understanding about our self-service calls?

MAJOR UPGRADE OR REPLACEMENT IN NEXT 2 YEARS For those remaining companies that have not upgraded, CIS, Quality Monitoring changes along with mobile web and SMS applications are occurring in the next 2 year window. How to best leverage the technology change? Total Respondents 18 Primary CIS Customer Information System 38.89% Quality Monitoring and Reporting Software 33.33% Mobile Website Mobile Application 50% SMS Messaging Text 44.44% Legends 21 22 24 28 29 30 31 32 33 34 36 40 41 42 43 49 50 51 Primary CIS Customer Information System ♦ ACD Automatic Call Distributor IVR Interactive Voice Response CMS Call Management System Scheduling WFM Software call forecast work Quality Monitoring and Reporting Software Multi Channel Blended Contact management software Meter data management system (MDMS) Training Elearning software Mobile Data (Field Scheduling or Order Mgmt) Mobile Website Mobile Application SMS Messaging Text IT5

INTEGRATIVE TECHNOLOGIES EMPLOYED at the Agent Level Nearly ¾ of companies are reporting high levels of technology aids to help agents support customers. Significant growth since 2014 Total Respondents 25 Screen pops with customer information prepopulated 96% Information to the agent on what path the customer has taken in the IVR to get to the agent 28% Most appropriate agent to handle call based on skill customer history etc. based on data mining 72% Provide the agent the ability to see realtime status of service orders or other pending customer work for informational purposes Enhanced intranet capability to allow agents to see quick tips or content specific areas Other 0% Legends 20 22 23 25 26 27 28 30 31 32 34 35 37 38 39 40 41 43 45 46 47 48 49 50 51 Screen pops with customer information prepopulated ♦ Information to the agent on what path the customer has taken in the IVR to get to the agent Most appropriate agent to handle call based on skill customer history etc. based on data mining Provide the agent the ability to see realtime status of service orders or other pending customer work for informational purposes Enhanced intranet capability to allow agents to see quick tips or content specific areas Other DCY Page 67– DC125

INITIATIVES TO MANAGE THE HANDLING OF CUSTOMER INFO NEEDED TO ENABLE MULTICHANNEL ADOPTION Companies are focusing on communication, verification and informational aspects in their initiatives We have begun the process of implementing a Preference Management Tool., allowing customers the opportunity to choose communication avenues for outages and service orders. (Company 33) Security upgrades for the masking of PII data (SSN, Bank Account and Drivers License are under consideration). Encryption of the PII data will also being implemented. (29) Volume Reduction efforts, Customer Self Service increased options efforts (36) Currently reviewing SalesForce as an option to manage email, fax, web to contact and more. SalesForce would need to integrate with SAP to be front face CRM. (23) Data Governance, Data Warehouse, Data Handling all in progress. (42) Laying the groundwork for our omni-channel project in 2016. (21) Web profile page update (click to update; web wizard for solar and wind; Customer preferences page on website, where we collect email, text info and allow customers to opt-in to outage text alerts. Pop up requesting updated contact information on web. (34) The Move-In Process script was modified to ask a customer for their email address and to immediately sign them up for e-bill and phone alert notices. (51) (Company) has undertaken customer contact data acquisition and cleansing initiatives through both frontline (contact center, website, etc.) and systemic processes. (32) IT35

areas of Focus and Opportunity Volume Is the upgrade/ replacement of your CIS allowing you to support customer contacts more effectively and efficiently Is the development and use of self service (Web, IVR, Mobile etc.) helping your company reduce the volume of live transactions/ work? Are you able to measure the volume changes, where and why they are happening? Are you able to measure customer satisfaction (and importantly dissatisfaction and fixes) with new applications? Cost CIS spending (FL5) – can you quantify it and what are getting for your spend in this area? Service Are your customers getting the level of service in your IVR and Web without having to call twice/ transfer/ use alternate live contacts? Are you measuring to understand if you are attaining the benefits promised in business cases/ justification for CIS/ IT investment?

1QC Community Key Success Factors Information Technology and CIS Effectively communicate plans and changes internally Leverage regulatory support in making changes service and customer friendly; incorporate a regulatory strategy as part of implementations (AMI or CIS) Maintain process consistency and improvement as a driver of change and preparation for systems implementations Link initiatives to better provide service, data management and information flow to and from customers…don’t confuse your customers Develop internal expertise to parallel and augment the use of external vendors in implementations Manage expectations and targets to allow for assimilation of technology (people -learning, project “burnout”, work load; process- application and testing, quality)

Thank You for Your Input and Participation! Your Presenters Ken Buckstaff Ken.Buckstaff@1QConsulting.com 310-922-0783 Debi Cook Debi.Cook@1QConsulting.com 760-272-7277 Gene Dimitrov Gene.Dimitrov@1QConsulting.com 301-535-0590 Rob Earle Rob.Earle@1QConsulting.com 315-944-7610 About 1QC First Quartile Consulting is a utility-focused consultancy providing a full range of consulting services including continuous process improvement, change management, benchmarking and more. You can count on a proven process that assesses and optimizes your resources, processes, leadership management and technology to align your business needs with your customer’s needs. Visit us at www.1stquartileconsulting.com | Follow our updates on LinkedIn