HOW TO MITIGATE DROP IN COLLECTIONS AFTER CIS GO-LIVE

TECO Energy: An Emera Company

Clayton Dean

TECO Energy

Manager, Call Center, Customer Service

Tampa, FL

cbdean@tecoenergy.com

Introduction

Today’s speakers

Durgesh Tiwari

Deloitte Consulting LLP

Senior Manager, Technology (SAP) Consulting

Dallas, TX

dutiwari@Deloitte.com

TECO Energy: An Emera Company

• An S&P 500 energy-related company, founded in 1899, HQ at TAMPA

Tampa Electric People Gas

•Vertically integrated regulated electric utility (Generation, Transmission, Distribution)

•Supplying the Tampa Bay area with electricity since 1899

•Number of customers—725,000

• Largest LDC gas utility in Florida

•Providing Florida residents and businesses with natural gas products and services since 1895

•Number of customers—365,000

Learning Objectives

Insights and Outcomes

Learn about design considerations for CIS implementations to allow for effective

collections

Understand different activities required for the effective collections through various

phases of CIS implementation

Understand the strategies that can be deployed to mitigate drop in collections with

major CIS go-live

Phases and Timeline

2014 2015 2016 2017

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Prep

Blueprint (Workshops)

Blueprint (Specs)

Realization (Build)

Realization (Test)

Final Preparation

Go-Live Support

Go-LiveEmera Acquisition - Complete

Previous Go-LiveEmera Acquisition - Announcement

Business Readiness

Project Scope - Functional Areas

Multi Channel FoundationBilling and Rates

Data Conversion

Customer Service Credit & Collections

Device Management

Contact Credit Agency to determine risk class

Alert CSR for any existing bad debt Assist CSR’s with security deposit

amount calculation Provide customers with auto pay option

Provide customers with budget bill option

Late payment charge calculations for overdue customers

Offer Pick-a-Due Date option for customers

Synergies for Electric and Gas customers

Special handling of accounts such as Bankruptcy, Supply Guarantee, Lights

Security deposit requests for under secured accounts

Ability to work with multiple collection agencies

Automatic Transfer of overdue balance to other active accounts

Ability to receive payments on written off accounts and automate reversal

Scope of the Collections: Functional Areas

Move-In

Collections – Active Service

Billing and Invoicing

Collections – Service Terminated

Blueprint Build Pre Go-LiveDesign Go-Live

Process Considerations

• Design collections strategy with inclusion of proactive measures

Determine customer risk class by contacting credit rating agency at the time of move-in

Payment reminder to E-bill customers before bill is due

Attempt contact customer via mail and phone call before rolling out the truck

• Asses impact of freezing collection activities in hyper-care period

Analyze impact of increased bad debt due to collection activity freeze based on historic data

Project time to get back to normal after collection activities resume in new system

Assess impact on collection agency operations because new accounts will not be submitted

• Selective data conversion to simplify overall collections process design Convert Credit Score info to allow aggressive collections for high risk customers

No dunning history is converted

Only 10 year’s worth write off history converted based on the fact that recovery after that time is minimum

Design Considerations

Simple and flexible design with following key features such as:

Configurable minimum dunning balance to utilize available field capacity, cost of field operations, and manage call

centre volumes

IVR capability for self reporting payments using intelligent payment confirmation number, acts as trigger for

cancelling open disconnection order when sufficient payment is received

Tool for generating PDF copies of dunning correspondence with single click which save significant efforts during

validation process

Ability to easily stop late payment charges for overdue customers while meter to cash operations are stabilized in

new CIS system

Use of standard SAP jobs for communicating with agencies, resulting in flexibility to choose new partner as

collection agency with minimum config/development efforts

Blueprint Build Pre Go-LiveDesign Go-Live

Activities Pre-Go-Live

Test Collection Processes End-to-end

process Converted data Production

volumes System

performance

Reconciliation AR Balance Security

deposits Write-off

balance Collection

agency placement

Collections Freeze Disconnects New agency

placements Write-off’s Plan post go-

live freeze

Go-Live

4 M

on

ths

2 M

on

ths

6 M

on

ths

Blueprint Build Pre Go-LiveDesign Go-Live

Mass roll-out

Manual collections

• Customers who can be engaged to pay with active reminders and communications

• E-mail blast and outbound dialer campaign

Pilot Dunning

• Perform collections for accounts with large overdue balances

• Select accounts for specific scenarios

Go Live Timeline

Go-Live

Collection freeze

• System stable

• Customer payments

• Invoicing issues

1 month 2 months

Manual Pilot Mass roll-out

Blueprint Build Pre Go-LiveDesign Go-Live

Manual Collection Manual Pilot Mass roll-out

Blueprint Build Pre Go-LiveDesign Go-Live

Plan / Re-Plan campaign• Finalize E-mail and call

language• What volumes to call? what

days to call?

Analyze effectiveness• What % paid• What % called back• Based on numbers re-

assess call volumes

Execute• Identify accounts based on

specific criteria• Same customer is not to be

contacted multiple times

Ob

ject

ive •Start automated

collection for accounts with large overdue balances

•Pro-actively identify issues and defects in the collections process

Pre

par

e Refresher for call center and field

28 different scenarios identified – joint bill, final, commercial etc.

1776 accounts identified in total for all scenarios

Exe

cute Business teams

available during nightly batch for validation

Notices, Outbound calls and disconnect orders activities validated

Daily status meetings with business stakeholders on issues identified

Pilot Collections Manual Pilot Mass roll-out

Blueprint Build Pre-Go-LiveDesign Go-Live

Past due customers unable to make payments in customer self-service portal after 6 PM

Payment and account balance query issues in work management system

Disconnect order failures / issues

C&C Outbound campaign Incorrect call flow

Pilot And Manual Collection Results

38 % paid in first 3 days after contact

33 % Called back

22 % called back and talked to a Rep.

30 % of customers who received final notice got disconnected

Defects Metrics

Manual Pilot Mass roll-out

Blueprint Build Pre-Go-LiveDesign Go-Live

Fin

al N

oti

ces

All

Ove

rdu

e

IVR

Cal

ls

Cal

l Bac

ks

Dis

con

n.

92,638

49,583

27,270

24,791

Pilot Metrics used for estimating mass roll-out numbers

Final notice at $50 threshold – 92,638 accounts

60 % of final notice customers will get IVR Call – 49,583

33 % Call back into call center –27,270

30 % get disconnected – 24,791 on 10th Day of collection roll-out

Volumes too high for both field and call center

Need for phased roll-out

Estimated Numbers Manual Pilot Mass roll-out

Blueprint Build Pre-Go-LiveDesign Go-Live

Mass Roll-Out

Field can work estimated number of disconnects

Disconnect orders are produced by cycle

Call center can handle the estimated call volumes

A/R Monitoring – A/R and bad debt is within manageable levels

All Critical defects are fixed

Check ListTurn on collections for

all cycles with $50 threshold

Turn on collections one cycle per day with $ 50 threshold

Manual hand holding for one month

Manual Pilot Mass roll-out

Blueprint Build Pre-Go-LiveDesign Go-Live

Lessons Learned

Identify critical business requirements for starting mass collections early

Develop a flexible solution that allows for quick changes such as changing collection thresholds

Engage accounting about A/R impacts of collection business freeze

Build reports / tools to support manual collection and evaluate the effectiveness of collections

Plan for pro-active customer communication

Review campaign language for manual collection campaign before go-live and include spamming considerations

Include process to exempt accounts from late payment and mass reversal of late payment fee

Questions?

18