1. © Graham Technology 2005 The Utility Company of the Future: From Reactive Customer Service to Proactive Customer Account Management Michael Cairns Graham Technology Business Unit Director, Utility Sector 18 th May 2005

2. © Graham Technology 2005 Today’s Presentation Defect-based Customer Service Traditional Operating Model Customer Centric Approach Emerging Operating Model Multiple touch-points Conclusion

3. © Graham Technology 2005 Global Utility Trends Worldwide Market Changes Lead to New Demands on Processes South Africa REDs: CT 2005 Customers: 5 million

4. © Graham Technology 2005 Defect-based Customer Service Current Issues  Utilities have invested heavily (money and time) in the creation and maintenance of complex IT suites.  Radical or rapid change of complicated systems can be difficult and painful.  Long timescales for ROI.  Systems are inflexible.  Systems & Processes are often not integrated.  ‘IT-driven’ rather than ‘business driven’. Results Customer service is reactive, not proactive Contact initiated by the customer Contact is normally to report a fault or problem Low visibility of customer accounts and issues Customer’s service experience is poor Increase in Customer Churn High Operating costs

5. © Graham Technology 2005 Traditional Model  Defect-based Customer Service  Departmental Silos (Sales, Marketing, Customer Establishment, Metering, Billing, Credit Management, Operations) and multiple applications.  Replication of Data across multiple Core systems (Sales, Registration, Metering, Billing, Debt Management, etc..)  No end-to-end visibility (Sales to Credit Management)  Clear separation of front and back-office  Numerous manual & repetitive tasks  Exceptions handled manually, lack of visibility, control, etc..  No routing & recognition strategy

6. © Graham Technology 2005 Defect-Based Customer Service Traditional System-Driven rather than Process-Driven solution BillingDebtContactSales Data-mart Metering, Others Integration Layer Multiple Reports DebtBilling CRM Applications Various Apps Users What will we try next? Management Process? Customers Complaint, Query, Record Defect, etc.. Field Force 3rd Parties Not Directly connected to Core Systems

7. © Graham Technology 2005 Customer-Centric Model  Move to single, common operating platform across all users  Identification of Key Core systems & Data  Workflow based – to manage work delivery, tracking and escalation  Bring together front and back office (routing, transfer, point of contact resolution)  Increased process automation  Automation of exception handling, visibility of clearance rates, etc..  Pro-active Customer account management  Routing to provide ‘Point of Contact Resolution’

8. © Graham Technology 2005 The Emerging High-Level Operating Model Process Framework Management Reports Enterprise Architecture Core Systems Time-delay TransferWorkflow (Thick & Thin) Customers & Prospects Pro-Active, Outbound Calls Routing & Recognition Customer Issues Customers Inbound Calls Generalists Customer Issues Real-time Transfer Specialists, e.g, Sales, Marketing, Customer Est, Metering, Ops, Networks, Billing, Debt. Customers Automated outbound contacts, e.g., SMS messages, email,.. Work Delivery Direct Routing to Specialists External, Field Agents & 3 rd Parties Business Issues Resolution with external Customer Self-service Straight through processing

9. © Graham Technology 2005 Proactive Customer Management Process Approach  Integration (& Replacement) of processes and inflexible legacy systems  Removes islands of technology  Expands communication channels and services  Rules are built into the system - prompts and scripting for agents  Automated front office and back office – workflow delivery, tracking, escalation  Automated reporting - use of process metrics to identify root causes  Process innovation is supported Benefits End-to-end process – single customer view Sustainable competitive advantage through innovation Reduction in operating costs Improved use of service guarantees and targets Faster issue handling and access to data Consistent companywide approach to service Ability to predict (& avoid) customer behaviour Customer Satisfaction and brand protection Empowered multi-skilled agents Customer profiling and segmentation Maximises ‘first contact’ resolution Cross-selling & up-selling increase customer value

10. © Graham Technology 2005 Centralised Processing: Multiple Touch-points Compliance Self Service Overall Contacts

11. © Graham Technology 2005 To Conclude Well Managed Customer Relationships are the Key to Profitable Growth in a liberalised market:  Maximises customer retention – retention is cheaper than acquisition  Maximises revenue collection – shortens the credit cycle, minimises debt  Maximises sales opportunities – up-selling & cross-selling Moving towards Proactive Customer Account Management delivers: Long-term growth and profitability Lower cost to serve through automation Customer retention and loyalty Increased value of your customer base Keys are: Flexibility, Agility, Integration, Consistency and Visibility provided by a business process framework. Automated processes create competitive advantage in evolving markets: Product-driven ProcessesCustomer-driven processes Basic Customer ServiceTailored customer service Price & Volume focus Value focus Limited product salesUp-sell and Cross-sell opportunities

12. © Graham Technology 2005 Michael Cairns Graham Technology Business Unit Director, Utility Sector Michael.Cairns@gtnet.com

13. © Graham Technology 2005 A New Approach What Are the Benefits of a Process Framework?  Fit the system to your processes, not your processes to the system  The business, not IT, has control  Improve process automation without throwing away your existing core systems  Data quality is assured  Process-by-process rather than big-bang implementation  Reduction in operating costs  Multi-channel customer communication Supports proactive customer account management