Utilities: Towards Greater Customer Centricity


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Relevance of Customer Centricity in a Changing World. Change is being forced upon utilities industry in an evolving macro-landscape. Utilities in the UK are going through a maturity phase. They need to be organized around their customers rather than infrastructure

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Utilities: Towards Greater Customer Centricity

  1. 1. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL1 Utilities: Towards Greater Customer Centricity
  2. 2. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL2 Agenda Introduction Background and Methodology Customer Centricity Today and Tomorrow Improving Customer Centricity Conclusion 1 2 3 4 5
  3. 3. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL3 Introduction Relevance of Customer Centricity in a Changing World
  4. 4. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL4 Socio-Economic Landscape Change is being forced upon utilities industry in an evolving macro-landscape Technological Mobile and social technologies have increased the number of channels Changes Affecting the Utilities Industry
  5. 5. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL5 Utilities Industry Evolution • Funding, incentives, penalties linked to customer satisfaction • Frameworks, processes and mind-sets need to change • Consumers have more power and choice than ever before • Marketing and brand management becoming a priority • IT programmes will help utilities get closer to their customer A Radical Shift • Utilities have abstract understanding of IT • They have not been known to translate ideas into IT success IT Constraints Utilities in the UK are going through a maturity phase They need to be organized around their customers rather than infrastructure
  6. 6. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL6 Background & Methodology Why and How of the Survey
  7. 7. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL7  Utilities will undergo massive changes in 2014/15:  New roles like customer service director and customer relationship manager  Assess and adopt customer-management technologies  New risks associated with customer centricity ,e.g., viral ridicule on social media UK’s Utilities Industry Energy Suppliers • Deregulated market • But political and regulatory intrusions exist. E.g.: • Mandate to roll out smart meters • Edict to pare down tariff options • Ofgem imposing ‘fairness’ obligation Regulated Energy Networks • Ofgem introduced RIIO: • To reduce carbon footprint • Upgrade networks • Impose price controls • Penalties up to 1% of allowed revenue for poor service Regulated Water • Ofwat continuing SIM for 2015-20 • Cos. have set up consumer-challenge groups like CCWater • Customer satisfaction up from 4.19 (2010-11) to 4.44 (2012-13) on 5 Regulatory Changes Pushing for Customer Centricity
  8. 8. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL8 Methodology Objective Evaluate current state of affairs and future trajectory of utilities vis- à-vis customer centricity Target Firms Regulated water and gas and electricity companies Survey Group Chief execs & senior managers – 23 in all Survey Details  Timelines: Survey conducted in autumn and winter of 2013/14  Confidentiality: Responses reported in aggregate; quotes are all anonymous
  9. 9. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL9 Customer Centricity Today and Tomorrow Current Practices and Projection for Next Year
  10. 10. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL10 Current Performance  Past 5 years:  Public scrutiny for water  Scorn for energy companies  For 90% respondents, customer centricity has become more important  No one rated themselves 1 on 5 on current performance  Utility bosses aware of importance of customer centricity  But they have much to learn about loyalty management and customer segmentation
  11. 11. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL11  Little negativity: No one rated themselves 1 or 2 out of 5  Respondents may have been mindful of portraying their companies in a positive light Responsiveness
  12. 12. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL12  Clear areas of investment identified:  Technologies related to loyalty, mobile services, segmentation, etc., are necessary Performance by Functional Area More confidence in operational areas than in purer customer functions  Emergency management: 4.1  Field services: 3.9 × Customer segmentation: 3.1 × Customer loyalty management: 2.8
  13. 13. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL13  Average ratings for next year – Electricity: 4.9; Gas: 4.6; Water: 4.4  Reality check: Even if everyone improves, there will be winners and losers since regulators use comparative methods  Key to achieve best results: Seeking lessons from other sectors and geographies through appropriate partnerships Future Outlook: Optimism Ambitious Expectations
  14. 14. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL14 Drivers of Customer Centricity Utilities driven by doing the right thing for business and customers, rather than external stakeholders (government, regulators and investors)  Regulatory incentives important for water  Cost control least important for gas  Market events that provide opportunities to change customer centricity:  Mobile technology  SIM (water)  Smart meters
  15. 15. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL15 Competing Priorities  Financial constraints pose biggest challenge  Final acts of PR14 and ED1 will make funding harder to come by  Customer projects like CRM tools will need upfront investment  Regulatory demands third most important competing area  This is directly at odds with regulatory goals
  16. 16. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL16 Improving Customer Centricity The Way Forward for Utilities
  17. 17. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL17 Areas of Improvement  Business process and technological improvements stand out as the top two  Utility bosses clearly feel they are leading the charge for customer centricity  Specific areas that utilities should target:  Multichannel offerings  Predictive analytics  Mobile communications
  18. 18. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL18  IT and business process optimization again the top two  Less need for investment on the softer side – training and recruitment  Water cos. have already made large customer-side IT investments, hence less important compared to regulated energy networks Planned Investment
  19. 19. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL19  Customer facing IT applications are most in need of improvement  Unexpected confidence in applications to manage new connections  Investment should not be hasty - returns should justify investment  Partners familiar with technologies in customer centric sectors can be of help Focus on IT
  20. 20. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL20 Customer Centric Corporate Culture  Utilities are traditionally asset focused  Cultural transformation required  Customer centricity initiatives already have executive sponsorship  Recruitment needs the most attention  Question to be asked:  How can technology make these changes easier?
  21. 21. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL21 Meeting Funding Needs  Regulatory incentives scored lowest  In line with earlier finding on regulatory incentives being weak drivers for customer  Funding through business efficiency initiatives:  Water: 100%  Gas: 100%  Electricity: 0% – due to 20 years of regulation  Caveat: Respondents may have markedly different interpretations for funding routes
  22. 22. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL22 Conclusion
  23. 23. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL23 Conclusion  Contrary to inflammatory political speeches, UK’s utility bosses are well-aligned towards customer centricity  Over-optimism: 62% expect to rate themselves 5 on 5 in 12 months  Significant scope for improvement in non-traditional areas:  Customer-facing functions for energy network companies  Mobile, social, self-service areas for water companies  Improvements will be based on:  Dedicated tools and functionalities – CRM systems, etc.  Corporate culture – attention to customer feedback, staff training  Message to regulators and government:  They need to incentivize customer centric initiatives
  24. 24. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL24 Customer Centricity and the Big Six  Mixed reports on customer centricity  Website developer Mando says energy suppliers devote more management-level staff to customers than high street and online retailers  Customer champion ‘Which?’ criticised suppliers for the high number of complaints  Changes in emphasis:  All respondents said that organizations’ outlook to customers had changed in recent years  This was driven by customer feedback and regulatory changes  Technology seen as lynchpin for future change  Despite poor reputation, UK’s biggest energy suppliers have customer interests in mind  No one questioned the importance of customer centricity “We have a single-minded focus on putting customers at the heart of our business” – Quote from a big six supplier
  25. 25. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL25 For more details please visit the link below: http://www.wipro.com/customer-centricity-for-utilities/
  26. 26. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL26 About Wipro Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of "Business through Technology"; helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner's approach to delivering innovation and an organization wide commitment to sustainability; Wipro has over 140,000 employees and clients across 61 countries. For more information, please visit www.wipro.com
  27. 27. © 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL27 Thank You ©Wipro Limited, 2013. All rights reserved. For more information visit www.wipro.com No part of this document may be reproduced in whole or in part without the written permission of the authors. Wipro is not liable for any business outcome based on the views presented in this document. For specific implementation clients should take advise from their client engagement manager.