Dunning Redesign Using BRF Mridula Sharma / SAP-CIS Program Implementer Michael Coe / Sr. Utility Analyst Energy Efficiency Snohomish County PUD

Transcription

1 Dunning Redesign Using BRF Mridula Sharma / SAP-CIS Program Implementer Michael Coe / Sr. Utility Analyst Energy Efficiency Snohomish County PUD

2 Snohomish PUD Service Area

3 Snohomish PUD The utility is the second largest public utility in the Pacific Northwest and the 12th largest in the United States. It is the largest of 28 PUDs in the state of Washington The utility is one of the leaders in tidal and geothermal energy research in the Pacific Northwest, both of which are clean, reliable and plentiful in the region. The PUD headquarters is located in downtown Everett with satellite offices placed in five major communities throughout the county: Arlington, Edmonds, Monroe, Snohomish, and Stanwood. Snohomish County PUD has developed and led regional conservation programs for more than 25 years The PUD is at the forefront in the research and development of tidal power. It continues to research additional sites in the Northwest for potential geothermal energy production.

4 Snohomish PUD Electric Utility Water Utility On September 1, 1949, the PUD became primarily an electric utility with the purchase of the electrical distribution system from Puget Sound Power & Light Company to serve all of Snohomish County and Camano Island Serves over 726,000 residents and businesses Covers 2,200 square miles in Snohomish County and on Camano Island The PUD s Solar Express program helps consumers interested in solar by providing cash incentives, low-interest loans and educational support The PUD is at the forefront in the research and development of tidal power 2013 Electric System Budget: $721 million In the early years, the PUD was primarily in the water distribution business, beginning operations on January 17, The Lake Stevens Water System was the first project to be organized and built. Other projects followed, like the Beverly Park Water System and Sunnyside Water System. Operates 12 separate water systems Supplies over 254 million cubic feet (retail and wholesale) Key Facts: 20 reservoirs, 384 miles of linear pipe; 2,330 fire hydrants; 6,762 valves 2013 Water System Budget: $16.1 million

5 Happy Path Read a Meter Utility sends an invoice 15 days for customers to pay the bill Customer pays the invoice within 15 days

6 Collection Steps

7 Business Changes 20 days 30 days 35 days 40 days

8 Additional Changes Time Duration Overdue amount Remove action items within steps Add/Modify existing fees Flexibility

9 If Residential Customer, use Procedure 1 If Comm. Customer, use Procedure 2 If Final Account, use Procedure 3 If this kind, use Procedure (etc.) Traditional Approach If this kind, use Procedure 4 If this kind, use Procedure 8 If this kind, use Procedure 5 If this kind, use Procedure 7 If this kind, use Procedure 6

10 Collection Strategy Business Rules Framework used instead of Conventional ABAP A series of Collection Steps Collection Steps used to first determine Account Type A set of Rules Defined Criteria of Rules e.g. Outstanding amount, Number of days past due, credit points Action Type

11 Decision Tree Used for Evaluation Amount Age Credit History Decision

12 Credit Rating Dunning by Procedure Dunning Level 2 Change of Approach Dunning by Collection Strategy Collection Step 2 Amount Days Dunning Level 1 Amount Days Dunning Data BRF Plus Collection Strategy Dunning History

13 Benefits of Collection Strategy Flexible and dynamic evaluation Linear as well as decision-tree based possible Configurable instead of programming Possibility of integrating manual and automatic activities Logging and tracing of rules execution Faster turnaround times for changes Reduced cost for change

14 Collection Strategy Business Rule X Business Rule Y Residential Rule Z Organization's specific business rules for collections They: - determine the treatment path of customers - control the execution of the dunning program

15 Context information can be used for decision-making such as: Creditworthiness Dunning Balance Zip code Industry Code Number of Broken Promise to Pay Minimum Days in Arrears Context Information

16 Capacity Planning Upper limit for number of activities that can be processed # of dunning notices to be processed # of customers receiving early reminders # of accounts queued for disconnection Dunning Balance Option to execute an alternative activity

17 Performance Success Evaluation Collection Success is determined based on the time it takes for an outstanding debt to be paid A new activity is available that calculates the success Information is available for analysis in BI along with the dunning history Use Champion Challenger Analysis to identify the most successful collection strategies

18 Performance Success Evaluation

19 Performance Success Evaluation

20 Performance Success Evaluation

21 Average Reminder Counts

22 Improved Payment Rates

23 New BI Content Business Partner Items in Delta Mode Dunning History in Delta Mode BI-Content for Business Partner Items BI-Content for Dunning History Payment History Returns History Work Items Collections Contacts in CRM including related FI-CA objects

24 Existing Row # STEP_LAST Age of Newest IS IS Open Item MONTHLY MEDICAL IS EXEC IS_ESS ADJUSTED DUNNING AMOUNT AGE OF OLDEST OPEN ITEM E_STEP 1 DN FALSE TRUE >=80 USD >38 Z013 Create Case DNEA DN FALSE TRUE >=80 USD >38 Z016 Create Case DNME 2 DN FALSE FALSE >=80 USD >38 Z006 Disconnect and Service Notification 3 Rem >15 FALSE >=80 USD >30 Z025 Disconnection Notice - Bi Monthly 4 Empty/Z017 FALSE >=25 USD >15 Z004 Reminder Notice 5 DN TRUE TRUE >=80 USD >23 Z016 Create Case DNME 6 DN TRUE FALSE FALSE >=80 USD >23 Z006 Disconnect and Service Notification 7 DN TRUE TRUE >=80 USD >23 Z012 Create Case DNED 8 DN TRUE TRUE >=80 USD >23 Z013 Create Case DNEA 9 Empty/Z017 >15 TRUE >=80 USD >15 Z025 Disconnection Notice - Bi Monthly

25 Implementation Design and Implementation ~ 1 month Quick issues turnaround Easy to train support staff Data Conversion (transition data conversion)

26 Business Drivers for Change Get a better handle on bad debt $4,000,000 credit write offs in 2011 Discovered that not all customers are the same yet we treated them the same 9% of customers make up 70% of at risk accounts Old dunning process was invoice level and linear

27 Leverage BRF to: Implement late fees and disconnection fees Designed a consistent payment arrangement policy Stop sending reminder notices Stop collecting at the door Process Change Made resources available to those who need financial assistance and were currently not receiving any

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29 Outstanding Amount 120+days $12,000,000 $11,000,000 $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 July August September October November December January February 7/1/2011 to 2/29/2012 7/1/2012 to 2/28/2013

30 Business Benefits Current write off level is $2,900,000 Collected over $500,000 in late and disconnection fees in the first six months. Minimal complaints to our Board of Commissions or General Manager Change in our culture

31 Questions?