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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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© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 1
Utilities: Towards
Greater Customer
Centricity
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 2
Agenda
Introduction
Background and Methodology
Customer Centricity Today and Tomorrow
Improving Customer Centricity
Conclusion
1
2
3
4
5
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 3
Introduction
Relevance of Customer Centricity in a Changing World
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 4
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 5
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 6
Background & Methodology
Why and How of the Survey
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 7
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 8
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 9
Customer Centricity Today and Tomorrow
Current Practices and Projection for Next Year
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 10
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 11
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 12
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 13
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 14
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 15
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 16
Improving Customer Centricity
The Way Forward for Utilities
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 17
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 18
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 19
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 20
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?
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 21
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 22
Conclusion
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 23
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 24
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 25
For more details please visit the link below:
http://www.wipro.com/customer-centricity-for-utilities/
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 26
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
© 2014 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 27
Thank You ©Wipro Limited, 2013. All rights reserved.
For more information visit www.wipro.com
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