The document outlines a collaboration between PSEG and Tata Consultancy Services (TCS) to enhance PSEG's debt collection process. Key challenges included inefficiencies in manual processes and high delinquency rates, which TCS addressed by automating various aspects of collections and ensuring better monitoring and prioritization of accounts. Post-implementation, PSEG saw significant improvements in performance metrics, reduced bad debt, and improved customer relationships.

1. Efficient and Effective
Transforming PSEG's Debt Collection Process
A collaboration of:
Michael Kelly
Manager, Credit and Collections,PSEG
Venkateshwarlu Putcha
Senior Partner/Lead FICA Consultant, Tata Consultancy Services

2. What We’ll Cover
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New Jersey & Public Service Electric & Gas (PSE&G)
Business Operational Challenges
Background of the Issue
TCS Solution Approach
Business Results Before implementation of Solution
Business Results After implementation of Solution
Business Operational Benefits

3. About PSE&G
2.4 million customers
Most of New Jersey’s Urban Centers are in PSE&G territory
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New Jersey 8.8 million People
• 3.2 million Households
• Almost 1,200 people per sq. Mile
PSE&G serves nearly three quarters of New Jersey's population
• 1.8 million gas customers and 2.2 million electric customers
• 80% Receive Both Electric and Gas from PSE&G

4. Benchmarking Write off / Billed Revenue
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When benchmarked nationally, first quartile performance would require
net write-off to be around $0.25, in the northeast it is around $1.00
PSE&G has
several collection
challenges
Two seasonal peaks
Gas only territory
Electric only and Combination service territories
Winter and summer moratorium
No late payment charges on residential customers
>50% of meters inside
No AMI
No remote shut off capabilities
Soft disconnect on move out
Use on inactive meters creates an “Unknown” account which needs to be shut off by
field collection and any balances are written off if no responsible party is identified

5. Net Write-Off / $100 Billed Revenue
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
$2.50
$2.00
$1.50
$1.00
$0.50
2012 $1.13 $1.04 $1.37 $1.48 $1.41 $0.97 $1.10 $1.36 $1.12 $1.40 $1.08 $1.16 $1.21
2011 $0.89 $1.11 $1.49 $1.33 $1.46 $1.35 $1.10 $0.89 $1.58 $1.09 $1.55 $1.25 $1.23
2010 $0.35 $2.00 $1.22 $1.14 $1.36 $1.15 $1.24 $1.24 $1.05 $1.17 $1.38 $0.74 $1.18
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$0.00

6. Percent of AR > 90 Days
Performance deteriorated to a point where in some months we were 50% higher than previous years...
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
2012 19.6% 18.9% 19.4% 21.1% 25.7% 24.6% 21.1% 21.5% 20.1% 23.9% 23.6% 20.1% 22.6%
2011 18.0% 16.5% 17.5% 18.3% 22.7% 23.6% 22.2% 22.9% 23.5% 26.5% 26.3% 23.9% 21.0%
2010 16.9% 13.9% 15.7% 19.0% 22.4% 23.5% 21.6% 22.1% 22.9% 25.2% 26.4% 22.5% 20.4%
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0.0%

7. Investment in
New
Outbound
Dialer
Strategies for Improvement Timelines
Supplement
Field
collection with
Meter Readers
Jan 2010 Jul 2010 Jan 2011 Jul 2011 Jan 2012 Jul 2012 Jan 2013 Jul 2013 2014
Improvements
to Automated
Call Campaign
I&C Financial
Monitoring
Centralized
Dispatch
Collection
Work
Management
Implemented
Meter Readers
to Shut-off
Unknowns
Customer
Behavioral
Modeling
Agency
Management
Tool
Difficult
Access Team
formed
Exterior Cut
Targets E&G
Distribution
Field
Collection AR
Targets
Payment
Arrangement
Controls
Deposit
Waiver
Controls
Dunning Lock
Controls
Prioritize Field
work by Age
Notice period
does not
Expire
Move-In
Controls
Moratorium
Rules
Challenged
Deposit
Automation
Started
Prioritization
of Account
Maintenance
Work
Field
Collection
Contractor
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Many initiatives have been tried before 2013 to streamline Collections process

8. Business Operational Challenges
Manual collection process lead to Inefficiencies and difficult to run daily business operations
02 No control around delinquent customer accounts
Unable to Measure
level of Collections
04 Inability to measure success level of Collections
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03
No real time tracking by Supervisors to monitor progress of work assigned to Specialists
Inability to track trend of delinquency across customer base
Inability to track performance of Specialists
No option for Supervisors to callback / reassign work assigned to Specialists
Unable to Track &
Monitor progress
Susceptible to errors and likelihood of missing delinquent customer accounts
Inefficiencies &
instances of wrong
collection calls
01
No automatic Identification, Segmentation and Prioritization of delinquent customer accounts
Highly manual and paper driven process
Significant effort for Collection department
Manual Process &
Significant Effort

9. Collections Process
Distribute customer accounts to
Collection Specialists through
paper print-outs or by forwarding
spreadsheets to process
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Outtsttandiing Paymentts
Debt Recovery
Manually segment customer
accounts depending on
customer category
Download customer
accounts into
Spreadsheets
Run separate set of Reports
and Queries for each
customer segment to
prioritize customer accounts
Reports
& Queries
Download
Manually
Segment
Prioritize
Accounts
Distribute
Accounts
Collection Supervisors had
to run Reports and Queries
to identify delinquent
customer accounts

10. Automated Collections process
Group Work items
by Segment & assign
to Supervisors
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Automation of Collections process by TCS streamlined daily
collection business operations
Create Work item
for each
Delinquent Account
Prioritize
Customer
Accounts
Apply Business
Rules
Segment Customer
Accounts
Identify Delinquent
Customer Accounts

11. Roles and Responsibilities
1 Collection Supervisor Collection Specialist 2
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Collections Process
driven by 2 key roles
Re-Prioritizes Work items by Work item Attributes
Distributes / Re-distributes Work items to
Departments within the Portfolio
Monitor Progress of Work assigned to Specialists
Forward Customer accounts to Calling Campaign
Assign Specialists to Collection Groups
Perform Temporary Specialist Assignments
Track Efficiency of Specialists
Perform Analytics on levels of Delinquency
by Age and Amount
Checks customer account Overview before
processing
Processes customer account
Interacts with Customer
Accepts and Processes Payments
Transfer customer account to other department
for further processing
Updates Customer Interaction

12. Work Distribution
Re-Prioritizes Work
based on Key Attributes
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Multiple departments in each Collection Segment. One Supervisor for each Segment.
Collection Supervisor assigns work to Specialists.
Collection Supervisor
Segment 1 Segment 2 Segment 3
Assigns Work to Specialists
Re-Prioritizes Work
based on Key Attributes
Re-Prioritizes Work
based on Key Attributes
Collection Specialists Collection Specialists Collection Specialists
Full Time Users
Part Time Users
Inbound Users
Field Collectors
Vendors
Full Time Users
Part Time Users
Inbound Users
Field Collectors
Vendors
Full Time Users
Part Time Users
Inbound Users
Field Collectors
Vendors

13. Standard Implementation Methodology
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More inclined towards SAP Standards. Leveraging functionalities of
SAP Collections Management
SAP Collections Management
• Contract Accounts Receivable and Payable (FI-CA)
• ERP Central Component (ECC) 6.0, Enhancement Pack 2 (EHP2)
Business Rules Framework (BRF)
• Configured customer Segmentation
• Configured Business Rules to determine Prioritization of customer accounts
• All rules in one place
• Application Independent
• Reusability of Rules
Business Objects (BOBJ)
• Provided flexibility to Collection Supervisors to design own Collection reports
• Reports to demonstrate efficiency of Collection Specialists
• Reports to demonstrate delinquency by Age and Amount
• Reports to demonstrate delinquency by customer segment and priority

14. Net Write-Off / $100 Billed Revenue
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
$2.50
$2.00
$1.50
$1.00
$0.50
2013 $0.92 $0.92 $0.87 $0.89 $0.89 $0.80 $0.86 $1.25 $1.01 $1.32 $0.86 $0.63 $0.93
2012 $1.13 $1.04 $1.37 $1.48 $1.41 $0.97 $1.10 $1.36 $1.12 $1.40 $1.08 $1.16 $1.21
2011 $0.89 $1.11 $1.49 $1.33 $1.46 $1.35 $1.10 $0.89 $1.58 $1.09 $1.55 $1.25 $1.23
2010 $0.35 $2.00 $1.22 $1.14 $1.36 $1.15 $1.24 $1.24 $1.05 $1.17 $1.38 $0.74 $1.16
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$0.00

15. Percent of AR > 90 Days
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
2013 17.8% 14.4% 13.0% 15.4% 20.2% 18.8% 18.1% 18.8% 18.0% 22.6% 22.4% 19.7% 17.9%
2012 19.6% 18.9% 19.4% 21.1% 25.7% 24.6% 21.1% 21.5% 20.1% 23.9% 23.6% 20.1% 21.4%
2011 18.0% 16.5% 17.5% 18.3% 22.7% 23.6% 22.2% 22.9% 23.5% 26.5% 26.3% 23.9% 21.2%
2010 16.9% 13.9% 15.7% 19.0% 22.4% 23.5% 21.6% 22.1% 22.9% 25.2% 26.4% 22.5% 20.4%
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0.0%

16. Collection Resources (FTEs)
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Many of the strategies deployed were focused on efficiency and
reducing the number of FTEs needed to be effective in collections…
250
200
150
100
50
0
2011 2012 2013
Field Collection Collection Process

17. Regulatory Inquiry Rate
As we have been making improvements,
we have also seen a decline in our inquiries!
At PSE&G, we count every inquiry that comes into our board of public utilities (BPU). We measure these as a % of
our collection activity including calls, letters, notices and actual shut offs.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
2.50
2.00
1.50
1.00
0.50
2013 0.87 0.65 1.34 1.38 1.14 1.29 1.48 1.11 0.79 1.55 0.98 0.79 1.12
2012 0.95 0.55 1.05 1.60 1.32 1.14 1.83 1.43 1.33 1.15 1.89 0.96 1.19
2011 0.41 0.57 1.58 1.41 1.51 1.67 1.75 1.56 1.31 2.22 1.37 1.99 1.37
2010 0.88 0.82 1.61 1.36 1.75 1.72 1.84 1.73 1.22 1.20 1.27 0.75 1.32
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0.00

18. Key Benefits post implementation of TCS’ Solution
Proven financial results and reduction in Bad Debt
2012 vs. 2013 we realized considerable improvement in a number of key performance metrics
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We have driven down
process costs

19. Integration with other Applications
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The work management system is linked to three additional major process improvements,
greatly improving performance and streamlining the operations…
Behavioral
Scoring
Collection
Work
Management
System
Predictive
Dialer
Agency
Management
Tool
Automated
letter/email
campaigns

20. Business Operational Benefits
• Identification of delinquent customer accounts
• Customer segmentation and Prioritization
• Transfer accounts to Calling Campaign
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Automation
Usability
• Improved Customer relationships through customer specific
Receivables Management Customer Relationships
• Improved Cash flow
• More control on Delinquent accounts
Financials
• Determine new Collection strategies for faster debt recovery
• View delinquent customer accounts by Age and Amount of debt
• Measure efficiency of Specialists and identify workload
• Measure success rate of Collections
Statistics / Analytics
• Identification of delinquent customer accounts
• Customer segmentation and Prioritization
• Transfer accounts to Calling Campaign

21. Contact Us
Michael Kelly, PSEG
Michael.Kelly2@pseg.com
Venkateshwarlu Putcha
TATA Consultancy Services (TCS)
Venkateshwarlu.P@tcs.com
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