The Customer

ScottishPower is an international energy business providing electricity transmission and distribution services in the UK; supplying gas and electricity to over five million homes and businesses in the UK; and operating electricity generation, gas storage facilities and associated energy management activities in the UK, US and Canada.

ScottishPower started undergoing a broad transformation in 1991, when it was privatized as the UK electricity market restructured and price regulation and competition were introduced.

The Challenges

1. A Changing Environment

ScottishPower's operating environment has changed dramatically since the early days of privatization. Market deregulation has driven both development and restructuring within the UK utility sector, and was fully achieved in 1999. Since then, the sector's former monopolies have retained only an estimated 60% of their customers. As a consequence, pressure was exerted on utilities like ScottishPower to become low-cost suppliers, whilst at the same time improving customer service levels.

Competition left the UK energy market with six major competitors following consolidation, all striving to reach the magic figure of five million domestic customers, deemed necessary for break-even. At the same time, low margins for the energy products themselves led to several utilities focussing on selling complementary products, such as insurance.

With the UK leading the way in liberalization, its competitive environment is now considered to be the harshest in Europe. Despite this, Ofgem, the industry's regulator, believes that domestic markets are still not fully mature and continues to look at ways of opening up the market.

2. Industry Pressures - Meeting Regulatory Requirements

Industry regulators like Ofgem and Energywatch occupy a strong position within the UK's utility sector, overseeing industry efficiency and competitiveness, as well as consumer interests. In February 2004, Ofgem ruled that 'vulnerable' customers may not be disconnected by electricity and gas companies. This type of ruling has a far-reaching impact on utility operations. Under incentive schemes devised by Ofgem to promote competition, utilities are required to meet key performance targets set annually by the regulator. If utilities fail to meet these targets, they can lose a percentage of their revenue.

Energywatch meanwhile, with its strong social agenda, handles consumer complaints and works with electricity and gas suppliers to raise standards of customer service and reduce energy costs. Areas of significant interest to both organizations that ScottishPower must consider, include: protecting vulnerable customers, improving billing and the effective resolution of complaints. They are also actively involved in the promotion of sustainable energy solutions and encouraging consumers to be energy smart.

3. Technology - Adapting Legacy Systems for a New Market and New Solutions

Typically, utility companies suffer from a lack of integrated systems and automated processes, but meeting regulatory, as well as, operational goals, requires seamless communication across departmental silos and databases. Low ratings with Ofgem or bad press from Energywatch can severely impact a utility's brand image. However, following deregulation, many internal processes remained manual.

As it became increasingly difficult to generate competitive advantage simply through product features, levels of customer care and service became the key drivers for differentiation within the utility industry. To retain customers and gain market share, ScottishPower needed to shift from a product-centric to a more customer-centric approach. From basic compliance to sophisticated product offerings, it required technology to support such a change.

4. Succeeding in a Liberalized Market

Price has traditionally been the key factor in customers switching suppliers. As a result, following privatization, average prices (in real terms) fell by 32% for gas and 25% for electricity by 2004. UK customers have therefore benefited from some of the lowest prices for gas and electricity in Europe. For utilities this has meant focusing on reducing operational costs as well as investing heavily in customer service. ScottishPower looked to technology to help it achieve both.

The ScottishPower Strategic Response

ScottishPower understood that they faced unprecedented rates of change in their business conditions and that staying competitive meant both maximizing agility, to effectively respond to these changes, and minimizing operational costs. ScottishPower needed a technology provider who could deliver the necessary flexibility and on-going customer-centric process improvement to evolve with the business.

In 1996, ScottishPower selected Sword Ciboodle Platform, Sword Ciboodle's comprehensive process-based solution, as the platform to address these needs. The initial Sword Ciboodle Platform implementation was to consolidate nine call centers into one.

The factors which led to the selection of Sword Ciboodle included:

• The process-centric architecture of Sword Ciboodle Platform
• Architecture focussed on high volume solutions
• Experience in customer service and sales implementations
• Legacy system integration capability
• Model based configuration providing an exact match to ScottishPower's preferred business processes
• Support for multiple-channels
• Flexibility to adjust to the inevitable evolution of business practice

Since 1996 Sword Ciboodle Platform has been deployed as the process platform of choice for delivering ScottishPower's tactical and strategic customer-facing agenda. Today, with its Service-Oriented-Architecture approach, Sword Ciboodle Platform powers most core processes in ScottishPower's contact center and many of those in the back and middle office functions.

The only way to get the edge is to go for leading-edge systems put in by leading- edge people

Jim Paterson Head of Sales and Marketing, ScottishPower

The Approach

Applying six sigma to CRM

Committed to delivering innovation, Sword Ciboodle has always adopted a collaborative and integrated approach with ScottishPower, pairing strategic acumen with strong execution capabilities to help drive the change program over the last decade.

All business cases within ScottishPower are assessed using Six Sigma methodology to ensure a measurement-based strategy that focuses on customer-centric process improvement and variation reduction. Priorities are identified by ScottishPower and then with Sword Ciboodle's assistance, solutions and application enhancements are crafted in Sword Ciboodle Platform by the Rapid Application Development team (RAD), staffed jointly by both organizations.

We consider Sword Ciboodle a trusted advisor, delivery partner and solution builder.

Jim McEwan IT Director, ScottishPower

Regular meetings ensure that all initiatives under the Six Sigma framework as well as ongoing relationships with key stakeholders are continually reviewed.

This strategy has allowed Sword Ciboodle to gain unrivalled insight into ScottishPower's processes and to position itself as a partner that based on its experience in other sectors, adds value to those processes, not simply a partner that implements solutions.

The Customer Interaction Platform

In order to support ScottishPower's many business and technology goals, Sword Ciboodle Platform is powering a suite of industry-specific processes, customer interactions and back office functions across multiple channels, platforms and integration points:

Utilities Processes

• Change of Supplier
• Campaign Management
• Customer Acquisition
• Fault Management
• Vacant Premises
• Prepayment Processes
• Collections and Debt Recovery
• Registrations
• Meter Reading Entry
• Complaint Handling
• Billing Enquiries and Amendments
• Contact Center Performance Management
• Back Office Processing

Channels

• Assisted Voice In / Out
• Self-Service Voice (IVR)
• Web Self-Service
• Email In / Out
• Whitemail In / Out
• Self-Service SMS
• Field Agent Service

Integration Points

• Exchange
• Genesys
• Asterisk
• Avaya
• Solve/SE
• Debt Manager
• Active Directory
• MSP for Billing
• Customer Systems
• Metering Systems

CRM Infrastructure

• Universal Agent Desktop
• Reporting
• Email Management
• Correspondence Handling
• Workflow Management
• Online Servicing
• Exception Handling

The Solution

The Sword Ciboodle Platform framework allows ScottishPower to:

• Separate business logic from integration services
• Provide a single model of business rules and a single view of data
• Leverage investment in existing legacy systems
• Support rapid iterative development
• Support incremental delivery aligned to strategic objectives and priorities

Most importantly, Sword Ciboodle has given ScottishPower the pathway to process-driven customer sales and service through the application of BPM and SOA principles, and Six Sigma-driven incremental investment. The solution is business-defined, flexible and cost-effective.

For a more detailed insight into Sword Ciboodle Platform project implementations at ScottishPower, please refer to the individual ScottishPower project studies found at the end of this case study.

The Results

Today

ScottishPower's sales and marketing, customer establishment, billing, metering, credit management and power systems processes are all enabled by Sword Ciboodle's process driven platform. Any interaction a consumer has with ScottishPower through any channel will be managed by Sword Ciboodle Platform from first contact to resolution. All 2500 contact center agents rely on Sword Ciboodle Platform as their unified service and sales platform 24 hours a day.

Deploying processes across front, middle and back office functions of a large and formerly state-owned utility demands trust, as well as hard work to ensure success. The Sword Ciboodle Platform investment has allowed ScottishPower to:

• Deliver consistent branding and service across multiple channels
• Continually enhance customer service
• Achieve targeted cost savings and efficiency improvements
• Exceed regulatory service standards
• Gain control and insight into its processes
• Reduce training time and improve employee attrition rates
• Achieve competitive advantage through business agility and process innovation
• Future-proof its technology investment

The Sword Ciboodle Platform solution is now regarded as the platform of choice for leveraging ScottishPower's tactical and strategic customer-facing agenda. Sword Ciboodle Platform's pervasiveness in ScottishPower reflects the strong capabilities of the product:

• Its proven ability to integrate with a host of back office and legacy systems - the key technical challenge
• Its proven ability to re-use processes across multiple applications reduces the initial time-to-build and the ongoing cost-to-serve
• Its multi-channel capabilities - write once, deploy anywhere - have been critical in delivering the capability to recruit and service customers as interaction has moved increasingly to the internet
• Its capacity to scale to meet user demand - key as ScottishPower moved to become a multi-utility supplier and acquired ManWeb

Tomorrow

ScottishPower continues to invest in the Sword Ciboodle relationship and in 2006 purchased an enterprise-wide license for unlimited Sword Ciboodle Platform use to support ongoing business strategy and process transformation. Building on more than a decade of experience, Sword Ciboodle continues to help ScottishPower sort through the complexity of today's business and technology choices to make the right decisions to support and shape continued and future business transformation.

We needed a partner with courage, innovation and commitment to deliver. Sword Ciboodle has a total team mentality - complete focus - one goal, one purpose, one team. They really make it happen.

Jim McEwan IT Director, ScottishPower

Power yourself - Web-based self service

The Challenge

ScottishPower required a solution that would allow its customers to self-serve online and:

• Reduce incoming call volume into the contact center
• Automate commonly performed back office functions and present them as online, self-service 'front office' options
• Comply with W3C web site design guidelines

The Solution

Sword Ciboodle's process-centric platform:

• Enables meter reading entry, payment and amendment of bills online
• Provides customers with access to their energy bills
• Allows bills to be amended and generated
• Generates quotes to calculate potential customer saving by switching their supply to ScottishPower
• Allows new customers to register and apply

The Results

• Inbound telephone calls received by the contact center reduced by 25% within the first week of implementation
• Inbound emails received by the contact center reduced by 40% within the first week of implementation
• Volume of completed customer applications increased by 22% within the first week of implementation
• Requests for bills to be issued decreased significantly
• Online customer experience enhanced due to quick and intuitive navigation
• Decrease in cost to serve customers

The project has provided our customers with improved performance and increased functionality whilst, at the same time, fully integrating the web site with our existing business processes.

Nicola Morrison Online Manager, ScottishPower

Power talking - The eContact center

The Challenge

ScottishPower wanted to triple its online user base within six months (10% of total UK customer base) and required a solution that would:

• Introduce a dedicated unit to support online customers via telephone and email
• Consolidate multiple toolsets via a unified desktop application
• Overhaul less than consistent customer experience due to workarounds and inefficiencies inherent in manual processes

The Solution

Sword Ciboodle's process-centric platform:

• Prioritises and delivers work items directly to the appropriate agent's desktop in a pre-determined, automated workflow
• Provides configurable rules and alerts for escalation
• Presents online customer data stored in multiple back end systems through a single agent desktop
• Administers work routing, agent and skill group configuration
• Provides comprehensive view of all customer interactions via the web site and eContact Center
• Reports both historical and real-time progress of account handling for management
• Uses pre-determined template responses for document and email correspondence

The Results

• Operating costs reduced by 60% within a six-month period
• Cost per customer decreased by 80%
• New employee training costs reduced by 50%
• 50+ different case types handled per service agent
• Consistent responses and levels of quality for the customer
• Agent productivity increased and training needs reduced
• Previous IT investments safeguarded

Sword Ciboodle's solution provides us with a unified desktop solution for our contact center operation that routes work based on configurable business rules and provides complete visibility of our customers.

Caroline Bogucu eContact center Manager, ScottishPower

Power transfer - correspondence handling

The Challenge

ScottishPower required a solution to improve its correspondence handling process and:

• Reduce the volume of correspondence received - approximately 400,000 items per annum
• Improve poor customer feedback as a result of errors and inefficiencies inherent in manual processes
• Increase visibility of progress for correspondence handling
• Reduce response times and minimize the corresponding sting of financial penalties
• Optimize correspondence handling processes and respond to all correspondence within two working days
• Decrease Energywatch complaints by 30% within single year

The Solution

Sword Ciboodle's process-centric platform:

• Integrates with digital scanning software
• Uses workflow to automatically deliver correspondence to appropriate agent's desktop, just like email
• Tracks all correspondence as it moves through the organization
• Facilitates real-time access to customer information through its open architecture and consolidation of previously disparate customer information
• Delivers comprehensive contact history to provide 'single customer view' at point of contact

The Results

• All complaints responded to within one working day
• Increase in operational efficiencies manual business processes are now automated
• Improved staff retention as agents can be moved to higher value roles
• 30% reduction in complaints to regulator within one year
• 100% tracking of correspondence from receipt to resolution improved customer and agent experience
• Achieved the lowest number of recorded complaints made to Energywatch since records began in 1999

With our improvement in handling customer complaints, we have set a standard that rival suppliers are trying to achieve. Neil Clitheroe, Business Transformation Director, ScottishPower.

Neil Clitheroe Customer Services Director, ScottishPower

Power on Empty - vacant premises

The Challenge

ScottishPower required an end-to-end solution to manage the identification and resolution of all vacant/void service defects, a key component of a utility company's debt strategy.

• Minimize the creation of new vacant service defects
• Reduce the time elapsed between the creation and resolution of vacant service defects
• Maximize cash collection from billing where a current responsible party or new occupier has been identified
• Minimize overstated irrecoverable charges and support settlement performance improvement metrics
• Optimize all opportunities for up sell, supporting the drive for organic sales growth

The Solution

Sword Ciboodle's workflow platform:

• Identifies and tracks vacants from the billing system
• Segments the vacants identified according to set of pre-defined business rules
• Manages the vacant entities through a variety of stages such as unknown, truly vacant, or occupied with/without customer details
• Pushes work items that require human intervention to appropriately skilled teams
• Automates creation and generation of gas and electricity bills where the premises is occupied
• Creates comprehensive interaction history for entire process

The Results

• In excess of 150,000 vacant services are tracked
• Cash collection increased - more than £66,000 within first few days of implementation
• Headcount in back office reduced as a result of automated
• Up-sell opportunities and conversions improved
• Employee satisfaction increased which has directly contributed to productivity gains

Sword Ciboodle Platform has been instrumental in shaping our ability to collaborate and allow us to holistically and proactively manage vacant premises.

Raymond Jack Head of Customer Collections, ScottishPower

Power Loss - change of supplier

The Challenge

ScottishPower required a solution to manage an electricity, gas or dual fuel customer leaving one energy supply company for another.

• Reduce volume of paper-based processes
• Remove data silos as a result of disparate and unreliable legacy systems
• Minimize risk of regulatory fine as a result of having no centralised audit trail

The Solution

Supporting 400 users, Sword Ciboodle's process-centric platform:

• Manages receipt and processing of loss notification from 'New Supply' company
• Sources all the necessary data on the customer's account and integrates with ScottishPower back-end systems
• Applies industry standard objection rules to ascertain if a customer can be barred from leaving
• Handles all final meter readings received from external sources, generates a final bill and escalates missing final meter readings
• Ensures all account are closed and billed within a number of days of the loss notification date
• Provides a real-time view of performance against key performance indicators for those staff involved in this process
• Provides a resilient and scalable workflow platform

The Results

• Visible, auditable change of supplier processes minimizes risk of industry Watchdog fines for non-compliance with regulations around defection processes
• Automated work management solution increases collaboration and agent productivity
• Shorter loss cycle and increased consistency in approach to Customers and Partners
• Efficient management of process fallout reduces headcount
• Integration of disparate systems reduces process-handling time
• Maximized cash collection from final billing as well as improved billing quality and accuracy
• Flexible process can adapt to market climate and changes

By simplifying the system landscape for agents and reducing the overhead required to manage a multitude of systems, we have realised dramatic savings

Raymond Jack Head of Customer Collections, ScottishPower

Power pays - Prepayments

The Challenge

ScottishPower undertook a new approach to prepayment metering, and required a solution that would:

• Convert all existing prepayment customers from the old token meter technology to the new key metering solution to comply with new regulation
• Introduce customer management processes for Key (Electricity) and Card (Gas and Electricity) type meters
• Streamline and automate the ordering processes for new prepayment meters, and new and replacement payment cards
• Improve the cash collection processes so as to reduce debt provision and write off
• Reduce number of visits to the customer's home from every three months to two years

The Solution

Sword Ciboodle's process-centric platform:

• Automatically identifies electricity and gas pre-payment candidates based on real-time, business-defined criteria
• Triggers the various business processes required to move candidates into the pre-payment segment
• Seamlessly switches pre-payment customers
• Provides the ability to order new and replacement cards
• Processes credit and debit adjustments to monthly customer billing
• Uses readings from key meters to automatically generate accurate customer bills
• Provides the ability to view and amend meter settings
• Schedules and manages a request for a key meter installation
• Updates all customer contact history

The Results

• By March 2007 more than 60% of ScottishPower Prepayment customers will receive an accurate bill
• ScottishPower able to meet their regulatory requirements to bill all customers regularly
• Increase in the number of positive conversions to the new metering technology

When a customer orders a new card, it is now a straightforward procedure. Using the Sword Ciboodle solution, our contact center agents are confident in guaranteeing receipt of the new card within 24 hours.

Raymond Jack Head of Customer Collections, ScottishPower