Energy and Utility Insights
Realizing Hidden Value:
Optimizing Utility Field Service Performance
by Measuring the Right Things
Utilities
© 2007 Sapient corporation
Realizing Hidden Value
About the Author
Rob Milstead serves as the North American lead
for Sapient’s Energy and Utilities Practice. In this
capacity, he manages strategy and business development activities for Sapient’s utilities solutions.
During his eight years at Sapient, Milstead has led
a wide array of programs spanning both business
operations and IT within the energy industry. These
programs have ranged from strategic business process
improvement initiatives within specific operational
areas, to complex multi–vendor IT system implementations, to business–specific programs which have helped
clients identify efficiency gains and drive business
improvements enabled through technology.
Milstead has a deep understanding of the challenges faced by utilities and the role of IT in enabling
business transformation and efficiency. His areas of
expertise include field service management, work and
asset management, customer information system
replacement, and business and IT strategy.
Milstead holds an M.A. in integrated marketing
and communications from Florida State University.
He is based out of Sapient’s Atlanta office.
Rob Milstead
Director, Energy and Utilities Practice
Sapient
Phone: (770) 407-3398
E-mail: rmilstead@sapient.com
© 2007 Sapient corporation
Report Highlights
Field service workforces offer a tremendous oppor­
tunity for achieving improvements in efficiency, cost
reductions, and service delivery. In fact, analysts
estimate that utilities could recoup up to 25% of
their operations and maintenance (O&M) budgets if
fieldwork were fully optimized.
While many utilities have invested in improving field
service and reliability, most are missing out on an
easy way to drive performance through time analysis. Between technicians’ start and stop times each
day lie ample opportunities for increasing efficiency.
By creating a clearer picture of how technicians
use their time, utilities can design and implement cost–effective initiatives that create rapid
value. One utility that implemented this approach
recovered 26 minutes in each technician’s day
and is using new insights to inform workforce
planning, budgeting, and operational reporting.
To obtain additional copies of this white paper,
please visit www.sapient.com.
Contents
Navigating a Challenging Operational Environment .................................................................................... Page 3
The Business Process Stumbling Block........................................................................................................ Page 4
Not All Data Is Created Equal . ...................................................................................................................... Page 5
Why Time Data Is Critical .............................................................................................................................. Page 6
Moving Forward ............................................................................................................................................. Page 7
Conclusion ..................................................................................................................................................... Page 9
Case Study .........................................................................................................................................................Pages 9-10
What Makes Sapient Different . ..................................................................................................................... Page 10
About Sapient’s Energy and Utilities Practice . ............................................................................................. Page 10
© 2007 Sapient corporation
Realizing Hidden Value
Navigating a Challenging
Operational Environment
Shrinking profit margins, challenging regulatory environments, demanding customers, and shareholder
pressures are causing utilities to take a hard look at
their operations and maintenance (O&M) expenditures.
For many, field service workforces offer a tremendous
opportunity for achieving improvements in efficiency,
cost savings, and service delivery. What’s at stake:
the 25% of the average utility’s O&M budget which is
spent on inefficient, unoptimized work due to a lack
of operational visibility, say industry analysts.
Many utilities have sought to improve field service
availability and reliability by implementing or upgrading field force automation programs. While automation
initiatives can be successful, they require significant
cash outlays and multi–year change management
initiatives to gain workforce acceptance and full
usage of new capabilities. For utilities that use union
workforces, the path forward can be even more
challenging. However, for many utilities, such large–
scale, costly initiatives may not even be an option:
According to Gartner, the average utility allocated only
2.25% of its revenue to IT initiatives in 2006.
A Drive for
Operational Efficiency
© 2007 Sapient corporation
The Business Process Stumbling Block
Some 58% of
industry–leading
companies say
poorly defined
business processes
prevent them
from optimizing
field service
productivity, finds
AberdeenGroup.
© 2007 Sapient corporation
Technology is important. However, knowing how to
exploit new functionality and the data these systems
create is equally critical and not always a part of the
initial system implementations. To take full advantage of new capabilities, utilities should make the
right business process changes to convert data into
organizational insights that can fine–tune field service
performance. This is a formidable challenge: While
100% of best–in–class firms are striving to increase
field service productivity in a wide array of industries,
58% say poorly defined business processes stand in
their way of achieving this goal, finds AberdeenGroup.
Among the culprits: an inability to measure individual
employees’ performance, create enterprise cost metrics, allocate service resources, and forecast needs
accurately. Yet customer expectations are a powerful motivator for solving field service issues, with
best–in–class companies citing it as the number–one
market pressure driving optimization programs. Vocal
and empowered, customers are not afraid to use their
clout to generate negative media attention, lobby for
legislative change, or take their business elsewhere.
Fortunately, there is an easier way to improve field
force performance. Most utilities can easily access
field service time data by leveraging the capabilities of
work management applications. By thinking about this
data differently, and creating a clearer picture of how
service technicians use their time, utilities can implement cost–effective initiatives that create rapid value.
Between technicians’ start and stop times each day lie
ample opportunities for increasing efficiency. Efficiency
is a critical starting point for realizing hidden value, as
it provides powerful metrics that can be used to guide
development of a comprehensive workforce management strategy that addresses planning, scheduling,
and measurement; as well as assess progress against
goals. Nonregulated utilities may choose to pursue
more far–reaching goals than regulated utilities as
they are not bound by restrictive rate cases, but both
can create operational visibility and gains that will provide long–term benefits.
Realizing Hidden Value
Not All Data Is Created Equal
Despite their field service objectives, many firms
lack a complete picture of workforce effectiveness.
The culprit? Volume– and cost–based metrics, which
can’t be easily correlated to workforce productivity
or individual technicians’ performance.
Employee time—how it is spent and how effectively it
is spent—is a simple but profound metric that directly
or indirectly influences a wide array of key performance indicators, including service response time,
customer satisfaction, productivity, speed to resolution,
and profitability. Identifying and correcting even a few
minutes of wasted time per employee each day creates immediate O&M savings by allowing employees to
complete more orders daily and reducing overtime pay.
As an example, Sapient recently helped a leading
energy services company implement a performance
management system at its operating utilities. One
key component, an electronic scorecard, enabled
the company to identify and fine-tune 26 unoptimized
minutes per technician daily within one month of tool
rollout. With a 500–member field force, the company
was able to enhance operational performance and
customer service across a number of indices, improving
its competitive position. (See case study on pages 9-10.)
While analysts’ predictions on field force productivity vary, most agree that utilities could stand to gain
between 1–3 hours daily per field service employee.
Since field service employees represent 46% of the
average utility’s workforce, according to Gartner,
these savings can be significant.
Talent and effort metrics provide important
insights into field force effectiveness,
helping utilities optimize performance.
Sapient believes that time metrics are critical to
developing a deeper understanding of workforce
performance because:
•They provide a better and fairer measure of employee productivity
•They facilitate insights that can shape training,
improving the performance of all employees
•They can improve operational decision making
in near–real–time
• They can enhance the accuracy of workforce
planning and scheduling
© 2007 Sapient corporation
Why Time Data Is Critical
While orders can vary considerably, top performers will
execute their work as efficiently as possible, regardless of their work type or locale. Using top performer
data as a starting point, utilities can baseline the
average time required to execute critical orders,
compare workers within a specific territory, make
cross–territory assessments, and ultimately even
compare utilities. This methodology helps utilities
move beyond current measures, which don’t permit
detailed order analysis or offer broader insights.
Additionally, utilities can use new insights to identify developmental needs, implement training and
feedback programs, and incent and reward top
performers. Conversely, utilities can track the progress
of low achievers, terminating those employees who
can’t be coached to better performance and are putting
a strain on scarce resources.
Obviously, utilities that use union workforces will
need to involve union management early, to acquire
their buy–in and obtain critical approvals for implementing
new performance management
processes and tools. While this
can be difficult, utilities can bolster their position by developing
and articulating a solid business
case that provides a compelling
rationale, new metrics proposed, measurement strategy,
ro a d m a p , a n d w o r k fo rce
com­munication plan. Utilities
should be prepared to discuss how they will coach and
train low achievers to improve
their productivity.
Technicians’ daily schedules provide data insights utilities can use to optimize
productivity. Identifying and correcting even a few minutes of wasted time each
day creates immediate O&M savings.
By analyzing employee time, utility supervisors can
create a holistic workforce management methodology that considers and optimizes workforce planning,
workforce scheduling, and performance management,
replacing the predominantly manual and subjective processes many use today. Understanding and
optimizing time also allows supervisors to hire the
right number of contractors for routine and seasonal
work, forecast needs for a wide range of scenarios,
and minimize overtime and the need for contractors.
While productivity issues affect
regulated and nonregulated
utilities differently, they can benefit both. Regulated
utilities can use this approach to help hit their rate of
return quickly and easily or drive an aggressive cost
improvement program after an acquisition. Meanwhile,
nonregulated utilities can use this approach to create
process improvements that deliver long–lasting
savings and shareholder value.
New Insights Into
Field Service Performance
© 2007 Sapient corporation
Realizing Hidden Value
Moving Forward
So how would a utility implement time–based analytics? Utilities should:
1.
Assess the status quo: Develop an
understanding of how field operations
are measured today. Document the current
state at project onset to determine what is
working and should be continued, and what gaps
will require process improvements. Utilities can also
choose to execute this process while implementing
a new field force automation system so that they
can capitalize on the new information it will provide.
this information is likely new and different than what
is available today, so only proper analysis and upfront
planning will help users realize maximal value.
2.
Create a measurable vision: Document
the vision, specific objectives, and the measurable business results of an optimized
field service performance management
program. rolling out a new performance management
tool or process requires effective change management. employees and their supervisors, who have
been using the existing method of measurement for
many years, may be intimidated by or antagonistic
towards a new approach. Building consensus early and
communicating objectives throughout the program
is critical to success. employers should share the
rationale for the program and the specific objectives
they are seeking and why. Most importantly, the project
team should identify specific measures at project onset
to measure progress. Value is achievable through a
variety of means, so understanding and agreeing on
what’s important matters for everyone involved.
A Roadmap for Change
7
© 2007 Sapient corporation
3.
Understand what you have: Conduct
5.
Analyze options: Create a detailed busi-
technical due diligence of what data
ness case of possible solutions. One size
is available in current and planned
does not fit all, given the wide variances in
systems. Determine the feasibility of colutilities’ sizes, services, territories, and
lecting required metrics before implementing the
field forces. Measurement systems will range from
new performance management tool and processes. It
packaged software to existing system enhancements
may be possible to retrieve some information directly,
and process changes. Evaluate all of your options and
but other metrics may be derived
understand their costs and
from multiple pieces of data.
business value to focus your
The process of retrieving infordecision making. Performance
The
data
you
already
possess
mation from multiple sources
management does not have to be
can be tricky so early analysis
an expensive problem to solve.
is often the critical starting
will help inform the total effort
Significant value can usually be
point
for
creating
new
and the overall timeline for the
achieved with minimal investimplementation.
ment. Completing a business
measurement baselines.
case will help you evaluate your
options against critical criteria.
4.
Prepare to measure progress:
Analyze your existing data, if possible, to
create a baseline that leverages historical data. If you’re introducing new metrics
for performance evaluation, it may be difficult to
determine a baseline. Intuition and industry benchmarks may provide some direction, but often the
data you already possess is the critical starting point.
Analyze available information for previous time periods
to help document the starting points for improvement.
This is important for training and communication:
Employees and supervisors will want to understand
what data is used to establish goals and where
it has been obtained.
© 2007 Sapient corporation
6.
Plan for success: Develop a phased
program roadmap with quick wins. Success
cannot be achieved overnight. Outline
all initiatives to make sure that you are
correctly tracking progress during the implementation. Break the project into short phases that deliver
business value to assess results and increase buy–in.
Additionally, a phased approach will allow multiple
stakeholders to evaluate progress and fine–tune the
approach to maximize value. Technology, process,
and change management are all key components;
the project team needs to understand and manage
interdependences to ensure maximal success.
Realizing Hidden Value
case Study
Conclusion
Sapient believes that field service time data is a
treasure trove of hidden value. While many utilities use
select measures to assess workforce productivity, few
have realized the full potential of time–based analytics.
By improving their understanding of how their employees spend their time, utilities can fine–tune operational
performance. Whether it’s translating time savings
into increased order completions, matching training
initiatives to real needs, or using analytics to inform
planning processes, time–based efficiency initiatives
can deliver success without the time requirements
and change management headaches of larger–scale
productivity initiatives. Equally importantly, they provide
real value for a modest investment, creating results
that will resonate with shareholders, executives,
and field managers alike.
Leading Energy Services Company
Uses Insights to Optimize Field
Force Effectiveness
Sapient worked with a leading energy services provider operating utilities in multiple states to optimize
the performance of its field force. Sapient delivered
an advanced performance management system which
used an electronic scorecard to provide efficiency data
at both the enterprise and individual technician level.
The company has incorporated the scorecard into its
field operations planning process, including workforce
planning, budgeting, and operational reporting.
Business Challenge
•Improve insights into field force performance
to optimize service delivery
•Enhance supervisors’ ability to manage the field
force and fine–tune service strategies
• Support the company’s operational improvement
program
Better understanding and
use of data enabled this energy
services leader to improve all
aspects of field service
decision making.
© 2007 Sapient corporation
What Makes Sapient Different
Approach
• Develop business strategy and design new
processes and systems to measure performance
•Evaluate, select, and implement a performance
management tool
•Pilot solution at smaller subsidiaries before
rolling it out across the company
•Enable supervisors to measure amount of time
technicians spend on each work order by tracking
start times; work efficiency based on order type
and zip codes; off–route percentage; stop times;
and quality, attendance, and safety data
• Field technicians receive monthly scorecards,
with authorized work interruptions factored
into results; these metrics are aggregated to a
yearly performance ranking
Sapient helps energy and utility companies succeed. We have 15 years of the right expertise, gained
while working side–by–side with our clients in their
unique operational environments and creating
solutions that meet their business objectives, while
delivering value that users can see and quantify.
1. Proven expertise in solving clients’ challenges,
with a success rate that is three times the
industry average
2. Deep insights into energy and utility companies’
strategic and operational imperatives, gained
in the context of multi–year partnerships with
our clients
3. Global access to the right expertise, with a highly
skilled workforce that is rigorously trained in
the industry business processes, applications,
and infrastructures
4.A unique delivery methodology, Sapient |
Approach, that delivers results in weeks, not
months, enabling companies to identify and
quickly respond to market changes
Results
•Achieved 20–25% efficiency improvements with
field service workforce, allowing technicians
to complete more orders daily
• Baseline data can be reviewed and adjusted
to accommodate continuous improvement
programs
• Client incorporated scorecard into comprehensive planning process, to inform workforce
planning, budgeting, and operational reporting
About Sapient’s Energy
and Utilities Practice
Sapient helps companies innovate their businesses,
delivering the right results on time and on budget.
Our Energy and Utilities Practice leverages deep
industry insights, a proven approach, and the right
expertise to meet clients’ strategic and operational
imperatives. Our ability to consistently deliver success has led to multi–year partnerships with our
clients, enabling us to serve as a trusted advisor and
collaborator on solving their toughest challenges.
For more information, please visit www.sapient.com/utilities or contact us at + 1 617 761 1676.
© 2007 Sapient corporation
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© 2007 Sapient corporation