Signal Alliance whitepaper covering CRM for the power sector in Nigeria.

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2. EXECUTIVE SUMMARY
OVERVIEW OF CRM
This white paper broadly explores customer
relationship management (CRM) practices in
the electricity distribution sector in Nigeria. It
identifies some of the existing challenges and
how they can be improved with the use of
ICT and better service design. In
a country where more than half the population
has access to electricity through millions of
connections to the grid, the challenge facing
the sector is better imagined than described.
Customer Relationship Management concerns
the relationship between the organization and
its customers. Customers are the lifeblood of any
organization, be it a global corporation with
thousands of employees and a multi-billion Naira
turnover, or a sole trader with a handful of
regular customers. The quality of your
relationships with your customers is essential to
running your business successfully. Recent
global economic conditions have made it clear
that staying close to your customers has never
been more important. Customer Relationship
Management (CRM) is a business strategy for
putting customers at the center of your business,
improving customer satisfaction and loyalty
while reducing the costs of customer interaction.
As companies carefully consider where to apply
resources to drive their business forward,
whether to enhance relationships with existing
customers, establish relationships with new
customers, or find new markets and exploit new
business models -- CRM software consistently
remains a top priority area of investment.
Successful organizations use three steps to build
customer relationships:
 determine mutually satisfying goals
between organization and customers
 establish and maintain customer rapport
 produce positive feelings in the
organization and the customers
The ultimate purpose of CRM, like any
organizational initiative, is to increase profit. In
the case of CRM, this is achieved mainly by
providing a better service to your customers
than your competitors. CRM not only improves
First, those that are privileged to be connected
to the grid, need improved services.
They need to be connected 24x7, occasional
outages and blackouts need to be
better communicated in advance, and
the billing systems and payment systems of the
electricity distribution companies (Discos) need
to work seamlessly. These are no small tasks.
Appropriate use of CRM solutions can catalyze
many of the solutions to address these
challenges.
Secondly, those that are not on the grid
yet, require that the grid be expanded to provide
them with electricity services.
This whitepaper documents the current state of
the sector to draw a better understanding of
the key actors and their roles. A
few specific recommendations are outlined in
the report using short, medium and long-term
lenses.
However, to move from identification
of challenges and potential solutions to
implementation of some of
the recommendations on the ground, a series of
concerted efforts are required by a number of
key stakeholder groups. A well thought-out
process needs to be initiated to get the
ball rolling. This report may be viewed as a
critical first step in making the business case for
that process.
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3. the service to customers; a good CRM system
capability will also reduce costs, wastage, and
And a new way of doing things:
 Processes that are capable and
complaints. Effective CRM also reduces staff
stress, because attrition - a major cause of stress,
reduces as services and relationships improve.
CRM enables instant market research as well;
opening the lines of communications with your
customers gives you direct constant market
reaction to your products, services and
performance, far better than any market survey.
Good CRM also helps you grow your business:
customers stay with you longer; customer churn
rates reduce; referrals to new customers
increase from increasing numbers of satisfied
customers; demand reduces on fire-fighting and
trouble-shooting staff, and overall the
organization's service flows and teams work
more efficiently and more happily.
The modern approach to customer relationship
management is based on satisfying all of the
needs - people, systems, processes, etc. across
the spectrum of an organization.
So what do we need to make this quantum leap
of customer integration?
effective
 Structures and systems that support
a business centered on its customers
 Connectivity (end-to-end processes)
both internally and externally (e.g.;
with suppliers)
On the auspices of the above information,
developing an effective CRM should be
paramount to every organization. An effective
CRM is one in which the relationships with
customers is ongoing, cooperative and built for
the long term. Organizations who have many
transitory relationships with customers
consequently have to spend a lot of money on
finding new customers. The cost of keeping
existing customers is a tiny fraction of the cost of
acquiring new customers.
There are significant business benefits which
accrue from an effective, integrated Customer
Relationship Management approach. These
include:
 Increased
customer
satisfaction,
because they are getting exactly what
they want (i.e. exceeding expectations)
 Ensuring that the focus of the
organization is external
 Growth in numbers of customers
A new way of thinking:
 Change in paradigm
 Change in the messages sent and
received
 Change in the overall culture
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4. 
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Maximization of opportunities (e.g.
increased services, referrals, etc.)
Increased access to a source of market
and competitor information
Highlighting poor operational processes
Long term profitability and sustainability
Forward
thinking
organizations
understand the vital need to maintain a
strategic focus on CRM and to resource
and manage it appropriately.
Reduced costs, because the right things
are being done (i.e. effective and
efficient operation)
CRM however has certain conditions. The
organization and the customers both have sets
of conditions to consider when building the
relationship, such as wants and needs of both
parties;
 Organizations need to make a profit
to survive and grow
 Customers want good service, a
quality product and an acceptable
price
Good CRM can influence both sets of conditions
CRM can have a major impact on an organization
through:
 Shifting the focus from product to
customer
 Streamlining the offer to what the
customer requires, not want the
organization can make

Highlighting competencies required
for an effective CRM process
The following characteristics are associated with
delivery of excellent CRM:
 Reliability
 Responsiveness
 Accessibility
 Safety
 Courtesy
 Consideration
 Communication
 Recognizing the customer
 Competence
NIGERIA ELECTRICITY REFORMS
HISTORICAL TREND
Electricity grew from few kilowatts used to serve
the colonial masters in Lagos, Nigeria in the late
19th century to the Electricity Corporation of
Nigeria (ECN) established by Act of parliament in
1951. In 1962, Niger Dams Authority (NDA) was
set up to develop hydroelectricity which was
merged with ECN to form National Electric
Power Authority (NEPA) in 1972. Decline in
electricity generation capacity in an ever
increasing population, with no visible plan to
commensurately increase generating capacity,
caused electric power demand to increasingly
overshoot available supply.
By year 2000, the problem sent Nigeria into
electricity supply crisis, which caused the Federal
Executive Council (FEC) in year 2001 to approve
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5. the National Electric Power Policy (NEPP), which
called for fundamental changes to ownership,
control and regulation of the power sector. The
2001 NEPP actually set the roadmap for Nigeria’s
power sector privatization, but due to the
bureaucracy in government, the policy could not
be signed into law until 2005. The signed
document became the Electric Power Sector
Reform Act 0f 2005. The ESPR Act 2005
translated NEPA into the newly incorporated
Power Holding Company of Nigeria (PHCN) Plc.
comprising of 18 separate successor companies
GENERATING
(Genco)
e. Ineffective regulation
f. High technical losses and vandalism
g. Insufficient
transmission
and
distribution facilities.
h. Inefficient use of electricity by
consumers
i. Inappropriate industries and market
structure
j. Unclear description of roles and
responsibilities.
PHCN PLC. SUCCESSOR
COMPANIES
COMPANY TRANSMISSION
COMPANY DISTRIBUTION COMPANY (Disco)
(Transco)
Kainji Power Plc.
Shiroro Power Plc.
Ughelli Power Plc.
Sapele Power Plc.
Afam Power Plc.
Gerega Power Plc.
Transmission Company of
Nigeria
PHCN took over the assets, liabilities and
employees of NEPA and was responsible for the
generation (6 companies), transmission (a
company) and distribution (11 companies).
The PHCN’s incorporated successors in the
unbundling process are given in Table above;
The problems or challenges which birth the
reforms as highlighted by the government are as
follows;
a. Limited access to infrastructure,
b. Inadequate power generating capacity
c. Inefficient usage capacity
d. Lack of capital for investment
Eko Electricity Distribution co. Plc.
Ikeja Electricity Distribution co. Plc.
Ibadan Electricity Distribution co. Plc.
Benin Electricity Distribution co. Plc.
Abuja Electricity Distribution co. Plc.
Port Harcourt Electricity Distribution
co. Plc.
Enugu Electricity Distribution co. Plc.
Kaduna Electricity Distribution co. Plc.
Kano Electricity Distribution co. Plc.
Jos Electricity Distribution co. Plc.
Yola Electricity Distribution co. Plc.
With the problems identified, the Reform Bill
sought solutions through achieving the following
five (5) objectives;
a. Unbundled NEPA through 18 separate
successor companies incorporated in PHCN.
b. Privatized the unbundled entities
c. Established a regulatory Agency (The new
Nigerian Electricity Regulating Commission
(NERC)).
d. Established a rural electrification agency and
fund (the same infested with corruption to the
tune of N52billion causing its suspension
between 2006 and 2009)
e. Established Electric Power Consumer
Assistance Fund
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6. Expectation of Nigerians of improved power
supply remained a mirage as the newly
incorporated
PHCN
performed
below
expectation. PHCN ceased to exist from 1st
November 2013 following a successful
privatization process by the Goodluck Jonathan
government.
CURRENT CUSTOMER RELATIONSHIP
CHALLENGES IN THE NIGERIAN POWER
SECTOR
Over the years, the Nigerian Power Sector has
performed below expectation. Several school of
thoughts have attributed the poor performance
to different reasons. The underlining factors
common to these several school of thoughts is
the customer relationship challenges with the
Nigerian power sector that has culminated to
poor performance includes but are not limited to
the following:
A. POWER LINES AND EQUIPMENT
VANDALISM:
Vandalisation, especially of the transmission
infrastructures and underground cables around
the distribution network has been a common
occurrence, even before the on-going reforms.
Most times, the vandalism is blamed on the
power brokers behind power Generators
importers. When such vandalisation occurs, it
takes long period of time for the power
authorities to be aware of it and address it
because there is little or no medium for
communicating such happenings to the
appropriate authorities.
B. COMMUNICATION BREACH/ GAP:
There is a gap in the communication channel
between the power distribution companies in
Nigeria and its customers. Over the years,
Nigerians have anticipated that this breach will
be addressed but it is an issue that is yet to be
resolved. Prolonged Power outages occur
frequently without due communication to the
customers of such outage. Despite such outages,
the bills that come in at the end of the month
outweigh the consumption.
C. TARIFF HIKE:
Consumers are not aware of the yard stick used
by the Nigerian power companies to measure
the amount of electricity consumption for a
given time period, thus they tend to disagree
with the bills issued to them, hence reluctant to
pay up their bills.
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7. D. UNACCESSIBILITY TO HISTORICAL
RECORDS:
Records showing the historical transaction of a
customer are not readily accessible by the
customers. This usually culminate to
disagreement between the customers and the
power companies as to the actual amount of
debt being owed because accruals are usually
calculated without an appropriate methodology.
CRM SOLUTIONS
Customers are the lifeblood of any organization.
Thus to ensure continuity, it is vital that a
sustainable relationship is established. CRM has
helped reduce the challenges faced in
establishing a sustainable relationship with
customers through its various solutions. These
solutions will solve the various problems facing
the power sector through improving customer
E. DELAY IN ATTENDING TO
EMERGENCIES:
Emergencies such as damaged electrical cables,
poles, faulty transformers usually occur. When
such emergencies occur, there are no help lines
with which the affected customer can channel
his/ her complaint and as such the issue remains
unresolved for a long period of time.
satisfaction. Some of the most reliable and
widely used CRM solutions include; Microsoft
Dynamics and SAP CRM
Several CRM solutions will help mitigate these
challenges.
Microsoft Dynamics is an integrated Software
Solution to simplify complex management of
electricity through; managing power usage
intelligently, delivering power and analysis based
on Customer demands, improve asset utilization,
increase power availability. The current
challenges of the Nigerian power sector
enumerated above can be addressed through
the use of Dynamics CRM. On this plethora,
Dynamics CRM will help solve the above
challenges through;
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8. 
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Stakeholder Relationship Management; this
entails
demonstrating
regulatory
compliance, enhancing customer care and
improving
stakeholder
relationship
management.
Advanced Insight and Segmentation; this
offers advanced insight, segmentation to
provide new value proposition to convince
the customer.
On demand and in Real time Monitoring; this
improves billing accuracy, customer service
and outage management by integrating
customer usage information with enterprise
systems.
Single Custom dashboard; Set up alerts to
track and monitor progress of different
interactions, track enquiries, cases,
complaints and service escalations
The benefits associated with using MS Dynamics
CRM in the Nigeria power sector cannot be
overemphasized. Some of such benefits include;
 Empower agents and representatives with
dynamic, unified desktop, front-to-back
office integration.
 Automated process guides self-service users
to the right answer, deflecting costly calls to
cost center.
 Leveraging advanced analytics and real-time
decisioning to recommend relevant offers.
 Interface-Outlook look alike, so it is easy to
train your staff in system’s operations.
 90% more increased visibility into metering
operations, billing accuracy, customer
service and relationship management.
 80% Reduced outages, improve reliability
and reduction in response times for fault
resolution.
 Dynamics CRM in the Contact Center Keeping Multiple Source System Data in
Sync.
SAP CRM for the Utilities Industry helps
companies retain customers.
WALLDORF, Germany - August 8, 2002,
announced that a growing number of utility
companies are benefiting from implementing
the industry-specific customer relationship
management (CRM) capabilities of SAP
Customer Relationship Management (SAP CRM)
for the utilities industry. The seamlessly
integrated solution of SAP CRM and SAP Utilities,
introduced by SAP AG, addresses utility
companies heightened focus on customer
retention. Utility companies have found they
must offer more customer-oriented services to
deepen customer relationship. The integration
of SAP Utilities and SAP CRM gives energy
providers greater transparency and efficiency in
their product offering, service, and sales
processes and the ability to improve customer
service and customer loyalty.
Software solutions for power companies must be
able to support two process chains: the
purchasing and provision of power and customer
relationship management—from the first
contact and contracting, to the delivery of
agreed services, final billing, and customer
support. With the seamless integration of the
front-end system of SAP CRM with the back-end
system, SAP Utilities gives utility companies a
complete solution to manage business processes
related to the procurement, provision, and
billing of energy services as well as the roll out of
customer programs and service centers. Both
SAP solutions share a common database, so
comprehensive customer information from the
billing system of SAP Utilities forms the basis for
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9. detailed CRM analytics and efficient customer
support. In addition, the seamless integration of
SAP CRM for the utilities industry reduces total
cost of ownership (TCO) and expedites return on
investment (ROI).
The end-to-end integration between SAP
Utilities and SAP CRM ensures that valuable
customer data from the industry solution is
directly available for customer relationship
management. “With this foundation, utility
companies are able to carry out detailed
customer and demand analyses that are the
basis for efficient and successful customer
relationship management.
CASE SAMPLE OF THE USE OF CRM
SOLUTIONS IN THE POWER SECTOR OF
OTHER COUNTRIES
To date, several utility companies around the
globe have implemented CRM solutions and are
currently serving millions of customers. These
companies include German GASAG in Berlin,
GEW RheinEnergie AG in Cologne, EnBW of
Baden-Wurttemberg, entega in Darmstadt,
Energie AG in Austria, the Swiss Romande
Energie AG, the Danish NESA, Metrogas in Chile,
Electrone in Italy, and Bristol Water in Great
Britain. An additional 21 utility companies
worldwide are currently implementing CRM
projects, aimed at serving another 11.2 million
customers
The following examples gives proof of utility
companies that have already implemented the
CRM integrated solution, reporting on increased
customer loyalty and higher efficiency in the
companies’ business processes.
Energie AG, the leading energy and
Infrastructure Company in Upper Austria,
supplies electricity to 410,000 customers
throughout the country. The energy company,
based in Linz, Austria, was looking for a solution
to optimize business processes in order to meet
the requirements of the deregulated market. Its
priorities were customer service, new billing
procedures in line with unbundling guidelines,
and energy quantity balancing with the required
exchange of data. Energie AG was the first
company worldwide to implement the energy
data management capability from SAP, and they
were also the pioneer for the new integrated
solution.
Leo Windtner, CEO of Energie AG, said, “The
complexity of transactions has clearly increased
with the deregulation of the electricity market.
SAP’s software solution helps us to take care of
our customers in a more comprehensive yet
efficient way. We have achieved higher customer
satisfaction and more efficient operating
procedures.”
Romande Energie AG – The Swiss Electric
Company Romande Energie, provider of
alternative energy, was looking for new ways to
service its 180,000 direct and approximately
60,000 indirect customers. Its main goal was to
maintain and increase its market share through
a high level of customer satisfaction. The
company also sought to improve the structuring
of marketing activities to allow for more
effective planning and implementation.
Increased employee satisfaction was another
issue. To meet these objectives, Romande
Energie implemented an efficient call center,
which today operates on the basis of integrated
functionality from SAP CRM.
Currently, millions of customers around the
globe have purchased CRM solutions to drive a
customer-centric business model.
RECOMMENDATIONS
CRM is an integrated approach to identifying,
acquiring, and retaining customers.
Its goal is to make it easy for customers to do
business with the organization any way they
want at any time, through any channel, in any
language or currency and to make customers
feel that they are dealing with a single, unified
organization that recognizes them at every touch
point.
Recommendations were developed keeping this
broader goal in mind. The following which are
enhanced by CRM solutions are recommended
for adoption in the Nigerian power sector as it
will help eliminate the current customer
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10. relationship problems faced in the sector;
necessary
forms,
usage
and
payment history information, options
for online application and bill
payment, load shedding forecasting, etc.

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Each of the distributors should have
24/7 dedicated call centers.

Complaints or issues raised by a
customer through call centers or
customer service centers should be
recorded and handled by an adequate
grievance tracking system with specific
time lines. That way it could be treated
as a good KPI tool for assessing the
quality of services by distributors.

Over the years, internet users in the
country have increased tremendously,
this presents a good platform to
electricity distribution companies for
staying in touch with a large pool of their
consumers online.
Each
of
the
Discos
should
have interactive websites offering
online services, such as downloading of
When providing access to the online
data, for example personal billing
and usage history, proper security
and privacy measures need to be
incorporated.
 SMS based notifications and status
updates of any query or
complaint could be considered as an
efficient tool of
customer relationship management. Bu
t an accurate linking of mobile phone
numbers with the meter numbers is a
required first step in this effort.
At present, majority of the Discos maintain their
own database system to record data in a
very general format. CRM focused software (i.e.
MS Dynamics or SAP CRM) could
be leveraged or developed to streamline the
customer support and services.
CONCLUSION
The electricity sector in Nigeria is at the
crossroad. Doing more of the same is not going
to yield the supply and distribution of electricity
the country so urgently need to continue its
growth journey. Fundamental shift in mindsets,
disruptive innovation in products and service
design and delivery and above all, an unwavering
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11. commitment by the leadership to improve the
energy situation in the country is much needed.
The analysis and recommendations put forward
in this report are intended to make a meaningful
contribution towards this journey.
Author’s Profile
Patrick Okusiriki is a staff of Signal Alliance
Limited. He works with the project management
unit. His wealth of experience was built on the
auspices of motivation, love for literature, and
desire to impact. This white paper is his first
published piece of literature, though he has
other works to his credit. He is a graduate of
accounting from the University of PortHarcourt.
About Signal Alliance
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between where the client is and where it wants
to go.
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+234-1-4701674, +234-9- 6230740, +23425208857, +234- 8033168704
Email
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www.signalalliance.com
Founded in 1996, Signal Alliance is an end-to-end
IT Company which specializes in systems
integration – has grown to be a most vibrant,
forward moving ICT company in Nigeria with
offices in Lagos and Abuja FCT.
With solid industry experience spanning across
the major sectors of the Nigerian industry, Signal
Alliance offers services in the areas of
Technology Support, Network Infrastructure,
Enterprise Applications and Service Assurance.
Signal Alliance boasts of highly skilled and
certified consultants as well as major strategic
partnerships with World industry giants such as
Microsoft, Cisco and CA Technologies. The
company prides itself on its ability to gain a
thorough understanding of clients’ businesses
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