Revenue Transformation: Achieving Your Optimal Potential Identifying, visualizing, correcting and...

Revenue Transformation:Achieving Your Optimal Potential

Identifying, visualizing, correcting and securing current and additional municipal revenue

Defining Revenue Transformation0

Revenue Security

Revenue Alignment

Revenue Information

• Securing current revenue• Alignment of all stakeholders, departments,

policies and procedures that influence revenue chain.

• Continuous improvement of underlying information

• Generating dynamic exception reports• Achieving optimal potential = Revenue

Transformation

Revenue Transformation

Revenue Exceptions

Establishment of a Dedicated, Focused Revenue Transformation Unit

RTU- Revenue Transformation Unit

+ + + =

Key - Stakeholder Management

Local Government Challenges – “Case for RTU”

1. Rapid Development and Growth

2. Lack of resources

3. Increasing Bad Debts

4. Insufficient Funding

5. Rising Number of Indigents

6. Unfunded mandates

7. Meeting development objectives including LED

8. Balancing an unfair scorecard

1



Revenue Raised

Revenue Needed

Balancing ActMeasuring Success

Typical reactions to revenue challenges

Focus on Turn Around Strategy1) Identify Need for Revenue Enhancement

Strategy

2) (A) Collection of Debt and (B) Cleansing of Data

A) Debt Management Initiative• Appoint Debt collection company• Focus on “Lost Income”• No Focus on underlying Issues• No Impact on “Future Collection Rate”

B) Data Cleansing Initiative• Appoint Data Cleansing company• No Focus on underlying Issues• Time based, and not sustainable• No Focus on “Value Chain”

2



Excellence is not skill it’s an attitude. Ralph Marston

Billable Revenue Potential - 100%Rates, Water, Refuse, Sewer,

Electricity

90% 10%

Budgeted Revenue1 100%

Billed Revenue2 90%

Revenue ForegoneDiscounts / Rebates

Unbilled Revenue& “Internal usage”Revenue LeakagesAdjustments

A B

*

**

**

Collected Revenue

Bad DebtsPotential Fraud

3

Over-Billing

80% DC

**

Key

Reve

nu

e R

isks

Key

Reve

nu

e S

tag

es

Latent Revenue

Revenue growthCorrecting Data & find Missing Data Increasing overall potential

Revenue leakages

Dedicated RTU - Increasing Billable Revenue Potential

Secure Current Revenue and Unlock additional billable revenue& “New” Revenue

B & B StrategyVacant LandAgriculturalInterims

110%

100% Revenue potential is based on assumption that all information is correct and all properties are accounted for.

100% Budgeted Revenue based on 90% accuracy of underlying information

Stakeholder Management

110%

Revenue Reservoir4

0

Revenue Leakages

Revenue Security



100

50

25

75

Rates

Leakages

Rebates Forgone

100 %

50 %

Income Tank

Basic Services / Availabilities

Leakages

Stakeholder ManagementMeasuring Success

100 %

50 %

Establish Dedicated Revenue Transformation Unit

Unique PwC Solution

Our experience tells us that a one size fits all approach to revenue transformation will not succeed.

Supported by innovative use of PwC technology - VIM

VIM - A location based methodology1

SHIFT THE FOCUS TO“LOCATION BASED

ACCOUNTING”& EXCEPTION REPORTING

ADDING A COMMONKEY TO ENTIRE DIGITAL

FOOTPRINT

BENEFIT: Increased Accuracy

& Revenue

GOAL: INCREASED REVENUE

International Support

National Support

Senior Off-Site Manager

Local Office with 2 Full-time staff members

Dedicated local team with a global reach


Aerial Layer

Bulk Deeds Layer

Cadastral Layer

Financial Layer

TP Application

SG Approval

Deeds Registration

Interim Valuation

Building Application

Interim Valuation

Integrated Truth

Unique PwC Solution

a b

VIM – Key features2

Unique TechnologyRevenue Process Alignment

c dIntegrated Decision-making

Increased Revenue

Integrated window into existing systemsA common key approach to all erven allows VIM to extract information from all your current systems.

Align strategy and operationsEnables operations to be effectively aligned with organisational strategy.

Reduced decision making cyclesConstant involvement of various cross-departmental staff and the visual features of VIM enables reduced decision making cycles.

Increased Revenue The fundamental benefit to any municipality is increased revenue as depicted in the table below in the Knysna Municipality example.


STEP 2ASSESSMENT

(Revenue Footprint)

STEP 1IDENTIFY NEEDS

(Apply Revenue Lens)

STEP 3PRESENT FINDINGS(Revenue Potential)

STEP 5RESOURCES

(People & Technology)

STEP 4APPOINTMENT(Establish RTU)

STEP 6CONSTANT REVIEW(Find New Revenue)

VIM – Step by Step process4


• Focus on Revenue Security

• Holistic Data Integration

• Revenue Transformation Management

• Establishment of a dedicated focused Revenue transformation Unit

• Dynamic stakeholder engagement

• Revenue process improvement

• Sustainable solution

• Accurate and complete billing and debt collection

• Location based methodology tried and tested

• Transfer of skills

• Assistance towards a clean audit outcome

Why is PwC VIM Solution so UniqueWhat is difference and Benefits of PwC solution

FOCUS ON MUNICIPAL PROPERTY RATES ACT 6, 2004

ACT 6, 2004

EGOV WEBSITE

Objection FormsSec 49 Notice

INFOMATE SYSTEMVALUATION ROLL

Valuer's Notice

Appeal Forms

RATES IS ABOUT PEOPLE & NOT JUST PROCESSESCommunication & PR are vital components for a successful GV

Sec 52 Notice

Our national footprintPietersburg

Kimberley

Bloemfontein

Ladysmith

DurbanDe Aar

Saldanha

MosselBay

PortElizabeth

PRETORIA

IndianOcean

ac

Cape Townd

d

e

i

j

h

f

g

a

ce

b

a

Upington

Johannesburg

b

RichardsBay

a. Bitou

b. Amahlathi

c. Inxuba Yethemba

d. Khara Hais

e. Great Kei

a. Khara Hais

b. Drakenstein

c. Makana

d. Ndlambe

e. King Sabata

Dalindyebo

f. Sol Plaatjie

g. Ga Segonyana

h. Govan Mbeki

i. Mkhambathini

j. Big 5 False Bay

a. Greater Kokstad

b. KwaDukuza

Implementation -

MunicipalitiesAssessment -

Municipalities

Data Cleansing -

Municipalitiesb

STEP 6

Find New Revenue

“Continuous Change”

Bel

ow th

e Li

neA

bove

the

Line

STEP 1

IDENTIFY NEEDS

Apply RevenueLens

Show “Case for Change”,

STEP 2

ASSESSMENT

Focus RevenueFootprint

“Need for Change”,

STEP 3

Focus on RevenuePotential

“Potential for Change”,

STEP 4

Apply Common Key

“Committed to Change”

STEP 5

Maintain Revenue

“Implement Change”

Policy Review, Interview key personnel, and High level Rates Overview

Quick WinsKey findingsDepartment AnalysisAdded Value

APPOINTMENT

1

23

4 5

FINDINGSRESOURCES

Tariff ReviewPolicy Review,Rates ModelingCompliancechecking, Unique View

Hands on daily analysis, deal directly with ratepayers, secure revenue, change forms

Innovation, ideation, advanced visual information management

6

Bench Marking,Case Study,Financial Model and RevenueEnhancement Initiatives

Revenue enhancement never happens by accident you need resolve, vision and

be willing to make a long term commitment to quality information management

REVIEW

Where to from here : - You have already taken the first step are you ready for Step 2

“Commitment to change”

“Case for change”

PwC VIM Solution• Questions & Answers

• The way forward

Revenue Transformation never happens by accident you need resolve, vision and be willing to make a long term commitment to quality information management

Contact details

We thank you for providing us with the opportunity to present to you. We will provide any additional

information you may require and will gladly discuss any of the items contained herein.

19

Andrew Fick

Associate Director

E mail: [email protected]: +27 (0) 21 529 2363Mobile: +27 (0) 82 446 4390

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