Streetworks – the unwelcome face of utilities

We’ve all been there – sitting in the car or on a bus wondering why we’re stuck in an endless queue of traffic, inching along at a snail’s pace. Then the temporary lights and cones appear, along with engineers in high vis jackets. Roadworks! ‘Utilities’ are digging up the road, causing all this disruption.

The public despair at the associated inconvenience, but at the same time we expect our utilities to be available 24/7, so they are a necessary evil. As a society, we cannot function effectively without them, with the volume involved being quite significant:

  • Estimated costs of traffic delays caused by streetworks to UK plc each year = £4.3bn
  • Annual number of streetworks undertaken by utility companies each year = 1.5m

Utility companies, their contractors and service providers, are acutely aware of the disruption caused and are constantly striving to reduce the impact through the adoption of new technologies, more efficient processes and increased staff competency. Balancing all this against the backdrop of maintaining regulatory compliance and of course minimising operational and/or penalty costs, is key.

So why is this such a costly challenge for Utilities? After all, surely it’s just digging a hole, carrying out a repair or an infrastructure project and filling the hole back in again, isn’t it?

If only it were so simple. Just like the proverbial iceberg, the general public only see the tip, or in this case the size of the hole! The parts that go unseen are the myriad of preparation and planning activities that have to take place before a single cone hits the highway. Risk assessments, method statements, noticing/permitting requirements, provision/collation of utility drawings, to name but a few. Mistakes here can cause a streetworks job to go badly wrong and have consequences for brand reputation, cost and regulatory non-compliance.

The important area of preparation and planning cannot be ignored when looking to drive streetworks efficiency and productivity improvements and to help drive down cost.

At Sopra Steria we’ve developed an outsourced ‘Safe Dig’ service to help realise the benefits from these desired improvements, and have seen savings through:

  • Reduced back office costs and improved efficiency in the transactional processing
  • Fast high quality service driven by metrics
  • Scalable service with low risk transition
  • Electronic drawing files – drawings can be accessed in the office or in the field via mobile devices
  • Robust management information system and analytics support informed decision making

How do we do this? Ask me by getting in touch by email or visit Safe Dig for more information.

 

Why the utility industry has lots of synergy with the insurance sector

If we had a choice none of us would “choose” to spend our hard earned money on utility bills – gas, electricity and water. Whilst all essential services, they just don’t have any aspirational value to us living in the developed world. A huge amount of infrastructure and capital investment has been made over the past decade assuring our utility services in the UK, so we tend (rightly or wrongly) to expect these services to “just work” and be there when we need them. This makes it difficult for utility companies to create a relationship with us – their customers – as most don’t want, or see, any value in having any contact or a relationship with our utility companies.

Typically, there are four journeys we will take with a utility company:

  1. To register or amend our details, or leave the provider. Currently for water companies this can be a relatively rare event given the current lack of competition and choice in the industry and we see our water bill more like an additional tax
  2. To query our bill. For gas and electricity companies, this is the most likely reason we will contact a utility company today, as the majority of the industry still runs on estimated bills. The planned roll out of Smart meters, however, will dramatically change bill queries, which in turn will drive down customer interactions
  3. To complain – the most frequent reason for us to contact utility companies! According to the Institute of Customer Services the utilities industry remains rooted to the bottom of the UK Customer Satisfaction Index (UKCSI)
  4. To report a fault, for example, when a loss of service occurs. This is the time when we expect and demand a high level of engagement, given the inconvenience the service loss will cause

These “customer” journeys tend to be very similar with the insurance sector. A small amount of contact occurs at the time when we register for an insurance policy, amend our details or exit. We might query the price at the time of renewal, although more and more, we do this through price comparison web services. The insurance industry ranks higher for customer service than the utility companies in the UKCSI so customer complaints tend to be fewer in number, but do still occur. And, when we have a problem – typically an event has occurred where we need to make a claim – we expect that claim to be processed with ruthless efficiency and by staff who show huge empathy to our circumstances.

This final customer journey, processing a claim, is one where the insurance companies have invested in heavily to differentiate themselves. Expensive advertising by insurance companies will often focus on how they manage claims, recognising the distress we may have at such times. Therefore, utility companies should invest in their people, processes and systems as well to provide much needed support during a loss of service – a very stressful time, particularly for vulnerable people.

Finally, insurance premiums, like utility bills, are ones we would all prefer “not” to pay but we know we “need” to ensure we have insurance policies to cover our loved ones, property, vehicles and possessions.

Utility companies should aspire to benchmark themselves against the leading insurance companies. Aspiring to align themselves with the best in class customer service organisations, such as John Lewis or Amazon is a flawed strategy – the companies at the top of the UKCSI all offer a product or service that we “want” rather than we “need”. Perhaps this is why British Gas has picked an insurance industry veteran, Mark Hodges from Aviva, to be their new Managing Director?

Dawn of the Utility Triple Play?

With the fast approaching water retail competition for business customers coming to fruition in April 2017 a number of interesting dynamics are potentially going to materialise. Notwithstanding the initial challenges all the existing water companies will have to grapple and come to terms with around transforming their businesses in anticipation of market go live, one key dynamic will be new entrants into the market.

New market entrants, who potentially could be waiting in the wings? Who might be investigating moving into the water retail market? Straight away certain sectors spring to mind who are already operating in these types of market space, and as such already have much of the required infrastructure in place and understand the dynamics of how to successfully operate in these competitive market spaces. Typically, companies in the electricity and gas retail space along with telco operators, who would appear to be the likeliest new players?

As if to validate this point, Ecotricity, although ruling themselves out of entering the water retail space, for now, citing their requirement to concentrate on their core energy business, does illustrate the point that new market entrants are giving consideration to entering the new water retail market.

In light of these potential new entrants, and more importantly the areas they already operate in, could we see, what up to now has been a typical telco space offering, the ‘triple play’ (ie video, voice & data)? Could we see a new entrant to the market who offers a utility triple play of electricity, gas and now water to business customers as a bundled service offering? Is this a natural progression of the now common dual fuel offering?

This type of offering could present some interesting differentiator dynamics, especially in the areas of tariff innovation, and thus cost along with perceived customer single point of contact benefits for all utilities. When looking at different business customer demographics it’s quite easy to see the utility triple play offering appealing to the larger volume SMEs, where cost and simplicity would be key drivers in the provisioning of utility services. Large volume water users and multi nationals will present more of a challenge as they will be looking at a larger criteria of requirements than SMEs, so any potential new entrant looking at offering a utility bundled service will face the challenge of needing to broaden out their offering accordingly.

It will be interesting times ahead – monitoring over the coming months the emergence of any new entrants into the market, their background and planned strategies and, who knows, maybe we will see the Dawn of the Utility Triple Play!