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April 30, 2020 | 7 Mins Read

Q&A: Digital Transformation Objectives and Priorities for Utilities

April 30, 2020 | 7 Mins Read

Q&A: Digital Transformation Objectives and Priorities for Utilities


By Sarah Nicastro, Creator, Future of Field Service

I’ve been learning recently about some of the unique pressures that utilities, especially in the U.K., face. As most of you know, my coverage of service has always been from a horizontal perspective – and I do believe that the majority of the challenges and opportunities for service-based business are shared from industry to industry. That said, there are of course intricacies to each industry – and I’m learning that for utilities specifically the journey of digital transformation is being led by regulatory pressures and a significant need to improve the customer experience.

I recently spoke with Stephen Hooper, Director of Propero Consulting to discuss and gain more insight on the pressures facing utilities. Stephen is an independent consultant with a lot of experience helping U.K. utilities face these pressures and embrace digital transformation.

Future of Field Service: Describe how the regulatory pressures placed on U.K. utilities are forcing them to become more customer centric.

Hooper: The U.K. utility sector (water and energy distribution) are regulated by industry regulators (Ofwat and Ofgem, respectively). Each utility provider is the sole distributor of water or energy (gas or electricity) within that distribution area. With a lack of competition in these residential markets, the regulators have introduced schemes to measure customer satisfaction and simulate a competitive market, for example the C-MeX scheme introduced by Ofwat to the water sector.

Providing high levels of robust customer service is a primary objective of regulators in order to elevate the level of service customers can expect form utility providers to be more in line with the service leading organisations from other customer centric industry sectors are providing. Performance against these frameworks is incentivised through additional regulating funding.

Future of Field Service: What are the top three objectives around customer centricity for most utilities?

Hooper: I’d say that the three primary objectives for utilities in order to become more customer centric are to meet regulatory SLAs, to bring customer experience to a level that will be recognised in the U.K. top 50 customer service organizations, and to improve first-time fix rates.

Future of Field Service: What is C-MeX and why is it so important for U.K. utilities to be prioritizing?

Hooper: C-MeX is exclusive to the U.K. water sector (together with D-MeX for developer services), Ofgem will have a similar focus as they prepare form the next RiiO regulatory period. C-MeX is a mechanism to incentivise U.K. water companies to provide an excellent customer experience for residential customers across both retail and wholesale parts of the value chain. The mechanism has real benefits and penalties associated with over or under performance; and +6% or -12% is allowed residential retail value.

C-MeX (and/or other customer measures) are increasingly important to U.K. utilities as they have the potential to increase (or decrease) regulatory funding in a market were the opportunity to additional revenue does not exist. In addition, lifting organisational reputation is key to enhancing the organisations ability to operate effectively in their communities.

Customer satisfaction is measured from the outputs of independent customer surveys carried out on behalf of the regulator from a random selection of customer contacts during a defined period. Customers are selected across all forms of customer contact, including a significant proportion relating to operational contacts which will have reliance of interaction with field-based personnel.

Future of Field Service: Explain why optimizing the field force is such a critical aspect of utilities achieving these CX/C-MeX goals.

Hooper: C-MeX will take into account all customer contacts, although only a random sample of customers will be surveyed. All customer contacts will include billing enquiries (no field force impact) although a large proportion of customers surveyed will be in relation to operational calls – and in many cases the visit and interaction from the field force will be critical to the customer experience. In addition to achieving improved C-MeX scores, the pressure to reduce OPEX remains, therefore not only is it imperative to maintain high level of customer service, but efficient deployment of the field force is key to achieving this.

Future of Field Service: What areas do utilities need to be focused on when it comes to field force optimization?

Hooper: There are several key factors in optimizing the field force contribution in improving customer service and the field force contribution to optimal C-MeX scores. Here are notable areas of consideration.

Problem Diagnosis. Utilities need accurate information relating to the customer issue in order to identify the technician skills needed, equipment required and any necessary consumables. Very often, issues are not clearly identified and the initial diagnosis that is carried by the field technician leads to additional time and visits required for resolution, significantly detracting from the customer experience.

Accurate allocation of field resources. To dispatch effectively, you need an accurate problem diagnosis and the ability to dispatch the most appropriate resource to resolve, which requires an accurate capture of technician skills (infrequently the case in utility organisations) and field equipment to resolve. With the reticence to track location of field technicians in U.K. utilities, the assignment of most appropriate resource can also be hampered.

Improved First-Time Fix. The inability to resolve and issue on the first visit and uncertainty of follow-on activity quickly detracts from the overall customer experience. Quick and efficient resolution of issues by the first tech on the doorstep is always the best way to win over customers and raise their opinions, so getting this right has to be a primary priority for utilities.

Clarity in follow-on activity. Where follow on activity is required, utilities should have the ability for the field force to schedule on the doorstep to meet the customers’ requirements and to provide assurance that any additional activity will be effectively manged. Even when first-time fix isn’t possible, efforts to remove uncertainty and determine a clear path to resolution are appreciated by customers.

Management of multi-customer incidents. Where incidents impact multiple customers, activity needs to be coordinated to meet all customer requirements. In many cases, not all customers will require a visit from the field force but all require communication to ensure an optimal and coordinated experience.

Customer Communication. Accurate, timely and reassuring communication from the utility about the field force improves customer experience and will impact C-MeX. Updates on field force arrival time, pre-arrival insight on field technician name (and photo if possible) are particularly important for vulnerable customers.

Future of Field Service: What technologies do you see as most impactful in enabling utilities to accomplish these goals?

Hooper: We need to begin with a solid foundation of being able to effectively manage service. From there, a few technologies are of particular interest in expanding and deriving further value:

Augmented Reality. There are two scenarios that are particularly impactful in the quest to improve customer experience:

  1. The use of apps available to the customer to improve the level and quality of information available for the initial diagnosis of issue and hence improve the quality of response, which increases the probability of first-time fix and optimises the customer experience from initiation of contact.
  2. For the field force to use to improve level of first-time fix by supplementing skills/experience of field technician on site with more experienced remote colleagues.

IoT can be utilised to pre-empt customer contact. For example, pressure sensors on customer water supply alerting leaks etc before the customer notices. Smart Meters can potentially detect loss of supply prior to customer noticing and potentially when not present.

Internet Appointment Booking including an online contact channel contribute to C-MeX.  Customers appreciate the ability to perform self-service in a variety of ways that suit their requirements.

Future of Field Service: As utilities embrace the need to change, they inevitably become more data driven. How can they work to use data as a guiding force rather than a retrospective analysis?

Hooper: The use of KPI data to manage field force performance has long been a mainstay of efficient field forces in the commercial world, however, U.K. utilities have been slow to adopt. Although there is retrospective analysis of performance at a high level; “active performance management’ to field technician level has not been widely evident which leads to sub-optimal performance of utility field technicians versus more commercially focused equivalents. The reluctance to utilise the use of vehicle tracking data (location) to manage performance is also slowing progress in this area. Where commercial organisations often offer financial incentives to their engineers to complete more tasks within their workday, U.K. utilities have a pay structure which prevent this. Given excess work often falls into overtime, even so it may prove to be counterproductive.

Future of Field Service: This is an immense amount of change for these organizations – what themes have you noticed among those managing it well?

Hooper: The level of organisational change required to enable the field force to provide this level of service is significant. Before addressing the specifics of the field force or any other area of the business, a culture of customer service needs to embedded into utility organisations which puts the customer at the centre of all activities. Retrospective reporting perpetuates the need to play catch up with customers to ensure they are happy enough to provide positive feedback prior to the regulatory survey will taking place.

The ability and will to actively manage the field force based on real-time metrics as opposed to retrospective performance reports will be essential, ensuring the organisation is able to react to customer needs yet maintaining the high levels of service. This begins to embed a customer service ethos into the organisation. The starting point for this change is the operational management of the utility organisation, front line managers and their willingness to actively manage the field technicians on their teams. This needs to be closely supported by the equivalent management structure in the scheduling department, demonstrating strength in driving compliance with the schedule and the willingness to utilise their counterparts in the field as required.

As with any organisational change, this needs executive sponsorship to provide the solid leadership required. Given the regulatory drive to achieve this level customer experience and the role the field force will need to play, this leadership needs to be readily available.