DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
The apples and oranges challenge: definitions vary from country to country, and company to company; however, there are a number of common components which can be compared 2
Utilities need to focus on key metrics across all departments 2
The key metrics are Customer Service, Revenue Management and Metering 2
Methodology 3
Cost to serve drivers are determined by structural differences between countries 4
Customer service staff per million service accounts 4
Annual billing based on actual meter reads is the key to reducing customer service staff per million service accounts 5
Inbound calls per service account are far higher in the UK than comparable European economies 6
High 'customer own-reads' metrics drive down inbound call rates 7
Percentage of calls related to meter reads/estimated bills are significantly high in France than elsewhere 7
Percentage of calls related to meter reads/estimated bills are significantly high in France than elsewhere 8
High customer own-reads, and/or high actual reads keep the number of queries related to meter reading or estimated bills to a minimum 8
Billing staff per million service accounts in the UK outnumber the next largest group by two to one 9
Utilities stand to benefit from collecting money electronically, as opposed to spending money on sending out bills 9
The UK employs more credit and collections staff per million service accounts than elsewhere in Europe 10
Automated electronic revenue collection is the best way to keep credit and collections costs down 10
Annual billing optimizes customer "own-reads" and reduces required delivery rates and numbers of calls into help-centres 11
Reminder bills are expensive and present an obvious candidate for cost reductions 12
Removing the need for reminder bills is the way to reduce cost to serve 12
90% automated non-discretionary payment systems are achievable 13
Experience in northern Europe indicates that 90% automated non-discretionary payment systems are achievable 13
High own-read rates in Germany and the Netherlands means utilities here spend less on home visits 14
High or low meter reading frequencies are good - the middle ground is uncomfortable 14
Spain has the highest level of meter reading productivity due to the fact that meters in the country are installed in centralized meter rooms 15
Locating meters in centralized meter rooms or external to properties can significantly improve meter reading productivity 15
Germany and the Netherlands are driven by customer own-reads 16
Estimated read-rates are highest in France, followed by Britain and Spain 17
It is important to have either high customer own-reads or high actual reads 17
A number of organizations have had particular success in driving down cost to serve 18
Germany case study 18
BAS - the shared service solution for Berlin utilities 18
BAS is in charge of 3.88 million service accounts for its clients 19
Order situation of BAS: 20
How did BAS drive down the cost to serve for its clients? 20
Using a shared service solution has reduced the meter operations, metering and billing elements of cost to serve by two-thirds 21
Netherlands case study: Oxxio 22
Oxxio was cautious in finding the best solution for smart metering, given the Dutch circumstances and its new entrant position 22
Smart meters lead to a much lower cost to serve 22
Oxxio: some valuable lessons learned 23
The 'future' holds both challenges and opportunities for utilities managing cost to serve 24
The meter to cash system 24
What does this review mean for utilities looking to reduce their cost to serve? (1/2) 25
What does smart metering mean for the cost to serve metrics? 26
The smart future: what impact will smart metering have on cost to serve 27
APPENDIX 28
Our bespoke services can be tailored to your specific needs 28
Ask the analyst 28
Datamonitor consulting 28
Disclaimer 28
List of Figures
Figure 1: Typical customer service staff per million service accounts 4
Figure 2: Typical inbound calls per service account are roughly twice as high as elsewhere in Europe 6
Figure 3: French call centers appear to deal with a larger proportion of meter related inquiries than elsewhere in Europe 7
Figure 4: French call centers appear to deal with a larger proportion of meter related inquiries than elsewhere in Europe 8
Figure 5: Small German utilities employ significantly more staff per million accounts than their larger compatriots 9
Figure 6: Trends in credit collection staff employment generally mirror those in billing-related employment 10
Figure 7: Typical reminder bills per service account are significantly higher in the UK than across Europe 12
Figure 8: Automated payment transaction can account for as little as 50% of payments 13
Figure 9: Typical reads per annum per service account 14
Figure 10: Meter reads per day per meter reader 15
Figure 11: Typical percentage of customer own-reads 16
Figure 12: Typical percentage of bills based on estimated read 17
Figure 13: Germany case study 19
Figure 14: Costs delivered (€/meter) of a household customer 21
Figure 15: The meter to cash system 24
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