ESB cuts operational costs and enhances customer service

The Electricity Supply Board (ESB) is a group that provides electricity, energy, telecommunications and IT services for businesses and consumers internationally.

ESB Customer Supply is the division responsible for marketing, billing, payment and customer service for the group’s electricity supply business in the Republic of Ireland. The Customer Supply division is based in Dublin and also has sites in Cork, Limerick, Sligo and Dundalk; it serves more than one million customers, including approximately 120,000 business accounts.

ESB Customer Supply had developed a number of standard business processes to help it handle billing and payment for customers, and had implemented an ERP system from SAP to support these processes. While these processes were effective, the business knew that there was room for improvement.

“To take one example, when customers called us to make an inquiry or report a problem, in a lot of instances it was necessary for front office staff to pass their request on to the back-office in order to resolve it,” explains Ciaran Hand, Business Process Manager at ESB Customer Supply. “This created a lot of work for the back-office, and also caused delays. Even simple problems often required more than one phone-call to resolve, so the level of customer service suffered.”

Defining priorities

Many employees within the business recognised these problems and suggested ways to streamline and enhance the business processes. Senior management was keen to take action – but with so many possible plans of action, it was difficult to know which areas to tackle first.

“We knew what our objectives were, but we weren’t sure how best to achieve them,” explains Hand. “We needed some guidance, so we decided to consult IBM Global Business Services and find a methodology that would help us obtain the maximum possible benefit from a process improvement initiative with the minimum possible implementation cost.”

Putting good ideas into practice

IBM Global Business Services helped ESB launch a Lean Six Sigma improvement initiative. With the support of key stakeholders within the business, IBM created a project team for each of the individual projects. In total 25 full-time staff from across ESB were involved, with additional staff involved on a part-time basis. IBM supplied consultants who acted as ‘Lean Coaches’ to help the project team understand the Lean Six Sigma methodology, and use it to analyse the existing business processes and deliver a number of important enhancements.

“We started by using a volumetric approach to work out which parts of our processes were causing the most issues, and then began looking at the different suggestions for improving them,” says Louise Kelly, Business Process Analyst. “We then used Lean Six Sigma techniques to prioritise these suggestions, weighing the potential benefits against the estimated difficulty of implementing them. We started with a list of approximately 20 possible projects, which we cut down to ten, and then down to seven. We also created a shortlist of ‘quick wins’ that we could implement immediately – these raised awareness of the initiative within the organisation, and helped us maintain the stakeholders’ enthusiasm during the project start-up phase.”

Hand adds: “One of the best things about IBM’s Lean Six Sigma approach is that it’s very visual: everything is displayed on the wall of the project room, so it’s easy for people to get a quick understanding of how things are progressing. A lot of traditional project management methodologies result in the creation of a report that nobody reads or acts upon – but with Lean Six Sigma, there’s a continual drive to move forward with each project, and the results are immediately obvious.”

Exploring possibilities for SAP

IBM Global Business Services also helped the project team handle the technical aspects of the implementation, by bringing in consultants from the IBM Innovation Centre in Barcelona, which acts as an international competence centre for SAP for Utilities.

“The IBM Utilities expert was extremely helpful in educating our in-house team about current best practices for SAP for Utilities,” says Hand. “Getting an overview of how other companies in the industry are using SAP is vital in terms of understanding the possibilities and potential benefits of its functionalities.”

Boosting first call resolution rates

Several of the projects that ESB chose to implement were concerned with improving ‘first call resolution’ rates – ensuring that a significant proportion of customer inquiries could be resolved successfully within a single phone call.

“We were able to re-engineer our processes to reduce the need for front-office staff to pass queries on to their colleagues in the back-office,” explains Kelly. “This has improved the first call resolution rate considerably – it’s now above 80 percent.”

Debt collection initiatives

The identification and implementation of a number of initiatives to improve the debt collection process is expected to result in a 40 percent improvement in debt collection over the next 1.5 years.

Significant cost savings

Streamlining these processes has also had a significant impact on back-office workload – enabling 25 full-time employees to move from the back-office to other, more productive areas of the business. This equates to a 12.5 percent reduction in staffing costs for the operational part of the business.

“There have also been a number of other important savings,” comments Hand. “By shortening the time it takes to resolve a customer inquiry and responding more efficiently to the needs of the business, we have saved approximately €500,000.”

Investing in people

Above all, learning the Lean Six Sigma methodology will help members of the ESB team work more effectively in future projects.

“The principles we’ve absorbed during the current improvement initiative are transferrable to any kind of business project,” concludes Hand. “Working with IBM Global Business Services has not only delivered significant real-world benefits for our current billing and payment processes – it has also given us an important range of skills that the business can leverage in the future.”