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Cloud Based Mobile Workforce

Management:
An Optimal Solution for Utilities

2016 Blumberg Advisory Group, Inc.

Introduction
State of the Energy Utility Industry
Companies in the Energy utility industry face a number of
critical trends that are impacting their operational effectiveness,
financial performance, and overall customer experience.
Political, environmental, and commercial pressures have
pushed utilities in regulated and unregulated markets to deploy
smart meters/smart grid technology. This in turn has led to a
deluge of data that utilities must manage in real-time. When
used effectively, this data can help to anticipate and avoid
service issues, and proactively respond to failures and outages
before they occur. In addition, rising environmental awareness
and active energy consumerism is forcing utilities to offer new
energy efficiency programs and install distributed generation
technologies (e.g., solar, wind, etc.). In parallel, many utilities
must support an aging infrastructure with an aging workforce.
These factors have made a major priority of achieving ongoing
cost reductions in operations and increasing flexibility of field
workers while managing reduced headcount.

Utilities are turning to various stakeholders and business units


within their operations to implement strategies to effectively
deal with these trends. Chief among these stakeholders is the
field service organizations representing Customer Service,
Transmission & Distribution, and Generation each of which
feels the challenge of cost-effective and timely service delivery
differently.

Rising Cost of Field Service


Service organizations within the utility industry
bear a great deal of the financial burden and
operational responsibility for meeting consumer
demands for reliable service and shareholder requirements for
predictable financial returns. Indeed, managing the field service
workforce is one of the largest operating expenses, accounting
for approximately 46% of the typical utilitys operating and
maintenance (O&M) expenditures.1 Unfortunately, these
expenditures have been rising since 2003 as a result of increases
in both field service workloads and operating costs. This trend
is due to the challenges and complexities associated with
managing an aging workforce, responding to increases in
capacity utilization, deploying complex new technologies,
and a growing demand for a wider range of services, taxing
an increasingly old infrastructure. This makes profit and
shareholder value tough to achieve with regulators keeping
rates low on behalf of consumers.
As a result of these challenges, utilities have been forced to
take a stricter look at their operations and maintenance (O&M)
expenditures. The more complexities involved in managing a
field service workforce, the more likely the utility is to experience
issues with field service operating efficiency. A closer look at
many utilities shows that much of this inefficiency is due to
poorly defined processes for scheduling field service events
and lack of visibility into how crews use their time. According
to industry analysts, approximately 25% of an average utilities
O&M budget is spent on inefficient, un-optimized work due
to this lack of operational visibility.2 In some instances field
service workforces spend less than 50% of their time on actual
maintenance or construction work.3 The rest of the time is
spent on non-productive tasks like administrative reporting,
suboptimal travel routes, repeat visits, and unnecessary truck
rolls resulting from duplicate work orders, wrong addresses,
customer unavailability, etc. While some of these are prerequisite to running the business, others are a result of legacy
processes, and the systems that support them.

1. Milstead, Rob Realizing Hidden Value: Optimizing Utility Field Service Performance by Measuring
the Right Things, Sapient Corporation, 2007
2. IBID
3. Radabaugh, Tina and Scalise, Joseph Field Service: Reenergizing a Hidden Asset, Bain & Company,
September 06, 2011

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Improving Operating Efficiency through


Workforce Management
Leaders among utilities are accelerating the trend of
understanding that utilities can improve both responsiveness
and productivity through more intelligent and automated
planning and scheduling of field service work. This can be a
daunting task given the volume of service events, the volume
of crews, the number of territories, and the need to respond
quickly to scheduled and unplanned events. As an example,
with only 1 crew responding to 10 jobs, the number of possible
scheduling scenarios is 3,626 X 10.4 For a large utility with over
5,000 crews and 50,000 service activities per day the number
of possible scheduling permutations is astronomical.
This fact avails the need for intelligent tools to assist the
planners and schedulers - enabling them to become exception
handlers that focus on the problematic work that both requires
their expertise, and is a smaller percentage of the work.
Most utilities underestimate the impact of sub-optimal
workforce management on the bottom-line. If crews are
scheduled too tightly they miss customer commitments and
compliance dates. If work is scheduled too loosely crews may
be idle as much as 50% to 60% of the time.5

Utilities that implement state of the art, Workforce


Management solutions are likely to experience a 20% to
30% increase in field worker utilization and productivity

To overcome these inherent shortcomings, utilities have turned


to Mobile Workforce Management Systems (MWFM) to obtain
better accuracy and precision around scheduling service

activities and planning work. Simply, these tools automate


the complex array of decisions and permutations involved
in building an optimal schedule. It does this in real-time by
taking into account the extensive amount of information (e.g.,
resource details, work data, scheduling policies, etc.) that serve
as input into these decisions and calculations. More importantly,
state of the art MWFM (a.k.a. Field Service Management, FSM)
solutions are capable of producing scheduling scenarios that
minimize costs and simultaneously maximize both productivity
and customer satisfaction. Furthermore, companies who
implement these types of solutions are likely to experience a
20% to 30% increase in field worker utilization and productivity.6
While the promise of gains in productivity and efficiency provide
ample incentive to implement a MWFM, the most compelling
rationale lies in its ability to improve customer satisfaction,
which research has shown that customer satisfaction has a
impact on shareholder value. According to J.D. Power and
Associates there is a strong positive correlation between
customer satisfaction and approved Rate of Return on Equity
(ROE).7 J.D. Powers analysis of trend data over a 14 year
period reveals that a 10-point improvement in the customer
satisfaction index (100 to 1,000) yields a 0.04% increase in ROE
for utilities. In other words, a utility requesting a rate change
on a $1Billion equity base could expect to receive an additional
$400,000 for every 10-point improvement in the customer
satisfaction index. Moreover, utilities in the top quartile of the
index were able to yield an ROE increase of 0.6% compared
to those in the bottom quartile which translates into a $6M
increase in earnings available to shareholders on an equity
base of $1B.8 These findings demonstrate that a utilitys ability
to achieve positive customer satisfaction ratings leads to a
positive regulatory environment that supports investments
in new technology which in turn further enhance customer
satisfaction levels and reduce costs.

4.
5.
6.
7.

Milstead, Rob
Radbaugh, Tina and Scalise, Joseph
Identifying Compound Interest in the Field Service Workflow, Utility Products, Volume 8, Issue 9
Federico, Lillian, Heath, Andrew, and Seldin,Dan Ph.D. How Customer Satisfaction Drives Return on
Equity for Regulated Utilities, J.D. Power, McGraw Hill Financial, October 2015
8. Federico, Heath, and Seldin

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Cloud Based MWFM and the


CapEx/OpEx Dilemma
The emergence of cloud computing has led to the proliferation
of Software as a Service (SaaS) based enterprise systems.
Unfortunately, the Utility industry has been slow to adopt
these type of applications. Although investments in cloud based
MWFM solutions can have a dramatic impact on improving
customer satisfaction, many utilities have been slow to make
these investments because they require a rate change request
before state regulators. The rate structure change process exists
to accommodate large and long term capital investments in
infrastructure while allowing Utilities to receive an approved
Rate of Return in the range 9% to 11% on capital expenditures.9
It also creates a very strong incentive for utilities to use all
of their available CapEx budgets and take assertive action to
capitalize costs.
Despite this fact, utilities have been forced to rethink the whole
CapEx investment model in light of recent developments in
cloud computing. Under the cloud computing model, companies
convert high front-end capital investments into lower ongoing
subscriptions that are treated as operating expenditures. This
has been viewed very favorably in other industries. However,
the regulated rate of return in the utility industry has led to
the status quo which favors capital investment in software over
cloud adoption. As such, adoption of cloud solutions has been
much slower in the utility industry than in other industries.
On the other hand, the cloud software market is growing 10
times faster than the traditional on-premises market.10
As a result, on-premises software applications are becoming
fewer and far between thus placing even greater pressure on
utility CIOs to consider cloud applications. This is in addition
to the new technology, new expectations, and new innovation
that come with cloud.
According to IDC, cloud applications will make-up half the IT
portfolios of over 60% of utilities by 2018.11 The utilities that
are leading the adoption of cloud solutions are those who have
made the shift from CapEx to OpEx in their treatment of cloud
solutions, breaking away from the traditional financial model.
Rather than waiting for regulators to clarify the treatment of
SaaS, they are making the business case themselves through

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the implementation of agile solutions that offer a number of


benefits over traditional on-premises software. Some utilities
are starting with cloud for simpler business lines like Customer
Service that produce fast ROI, require more rapid innovation
(e.g. around customer engagement) but where infrastructure
data is not perceived as at risk on the cloud.

Benefits of Cloud Based MWFM Solutions


There are of course a number of legitimate technical and business
reasons why utilities should consider making a proactive shift
to the cloud environment. First, Cloud offers greater strategic
agility within the IT environment because cloud vendors are
responsible for providing sufficient computing capacity. This
means that utilities can be more responsive to unforeseen
events and business demands. Second, Cloud applications
provide for continuous upgrades at no additional costs. This
helps utilities immensely particularly when the vendor has
extensive industry domain knowledge and can incorporate
best practices into their solution. This is extremely critical in
the cloud world since these solutions require that utilities
work within the constraints of the feature functionality that is
immediately available. Third, cloud applications are typically
designed with modern user interfaces which minimize adoption
time and user training costs. Fourth, cloud applications and the
model upon which they work enables rapid time to value. New
applications can go live in a matter of weeks versus months as
is the case with on-premises solutions. This is critical in todays
environment as the complexity of the distribution grid and need
for additional revenue streams requires utilities to adapt more
quickly than ever before. Fifth, and most importantly, cloud
solution providers are subject to tighter security standards
and more frequent audits than the typical utility. As a result,
they offer an improved level of security.
9. Flebowtiz, Jill; Eastman, Robert; Torchia, Marcus and Berggren, Erik, Business Strategy: Making the
Case for SaaS in Utilities
10. Eastman, Robert and Karlskind, Mike, Utilities in the Cloud A Realistic Approach, ClickSoftware
Webinar, November 19, 2015
11. IBID

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Benefits of Cloud Computing to the Utility Industry


a Strategic agility
a Continuous upgrades at no additional cost
a Built for user adoption
a Offers rapid time to value
a Greater security over on-premises
One of the areas in which cloud solutions can have the greatest
and most immediate impact to utilities is in the area of field
service and Mobile Workforce Management (MWFM). This is
because field service plays such as critical role in responding to
business challenges facing the utility industry. As referenced

earlier, lower authorized ROE and funding rates for CapEx and
OpEx by state regulators has created an environment where
utilities need to be extremely effective in optimizing field labor
efficiency and productivity to achieve earnings expectations
of shareholders. In addition, demands for increased reliability
among consumers has led to increased spending on aging
infrastructure and funding on upgrading the energy grid which in turn has led to increased workloads for field crews.
Furthermore, the desire of utilities to improve the customer
experience and maintain high levels of customer satisfaction
during routine service requests and major outages requires
that utilities possess the right tools and technologies to proactively manage customer expectations.

Value of MWFM in responding to Key Business Drivers


Key Business Driver

Challenges to Utility

Value of MWFM

1. Regulatory compliance for field


Accountability, documentation and
inspections & maintenance
verification of inspection

Optimize inspection schedules,


capture key asset status and details,
streamline operations

2. Reliability for utility stakeholders




Prioritized service to critical aging


infrastructure, managing short & long
cycle work, real-time crew allocation
and time sheets

Manage inspections and ensure


compliance, provide greater field
visibility, rapid and accurate labor
& overtime reporting

3. Increased customer satisfaction




Provide customer self-service,


communicate with customer during
outages, reduce outage frequency and
duration

Enable customer self-service,


proactively notify customers of
estimated restoration times,
drive outage prevention

4. Managing catastrophic events


Quickly mobilize resources, speed-up

damage assessment process, rapidly

on-board and manage mutual

aid/contractors

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Optimize dispatch & scheduling of


resources, gain greater field visibility,
increase # of damage assessment per
day, and facilitate faster on-boarding
for mutual aid workers

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Best in Class MWFM Functionality


Cloud-based MWFM provides an agile, highly secure, and low
cost solution to utilities seeking to overcome these challenges.
In selecting a cloud-based MWFM, utilities are advised to
consider best in class solutions that contain the following
feature-functionality:
Schedule & Dispatch: Best in class MWFMs contain feature rich
functionality for job scheduling, appointment booking, and work
order management. Algorithms within the optimized scheduling
function ensure the schedules are automatically built with the
best possible scenarios that minimize travel, whitespace, and
overtime while ensuring that work crews arrive within the time
frame promised to the customer. In addition, schedules can
be renewed up to the hour, minute, and second so they are
optimized through-out the day.

Enterprise Mobility: This capability is extremely critical for


any type of MWFM regardless of industry. Enterprise mobility
allows seamless interaction between field workers, office
staff and all back-office functions. These apps offer real-time
communication and full-visibility to field workers and dispatchers
thus improving efficiency, productivity, and customer satisfaction.
This is especially critical as on-boarding of mutual aid workers
shifts from in-person to remote via mobility that works on any
current device.

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Shift Management: Shift scheduling functionality ensures all


roles and positions are staffed to desired capacity level hours,
days and weeks in advance. It also takes into consideration
employees preferences and allows employees to enter and
request changes on their own schedules while adhering to
union and regulatory rules. Pattern optimization features should
also exist within this function to logically create shifts and shift
schedules that match the forecasted workload, capabilities and
availability of workers, as well as union and regulatory policies.
Planning & Forecasting: Demand forecasting takes into account
past experiences, trends, seasonality, and business cycles to create
credible forecasts and plans for the entire organization, individual
business units, product lines or any other view of the business.
Utilities can produce more optimal resource allocation plans
looking out any time frame into the future using capacity-planning
tools that are found within state of the art MWFM solutions.
Performance Measurement: MWFM solutions are not
complete without business intelligence and analytics that
can provide granular, user-defined reporting for critical
KPIs, including: work backlog, SLA compliance, travel costs,
resource utilization, and more. Best in class MWFM solutions
are capable of providing a user-defined dashboard of KPIs for
data driven insight into service performance. By utilizing this
capability, utilities can obtain a broad and detailed picture
of the root cause and effect of issues, enabling corrective
and/or preventive actions in a timely manner.
Contractor Management: This capability area enables
utilities to gain greater control and visibility over their
service contractor network. As a result, utilities can ensure
a consistent service experience to their customers. By
generating immediate proof of service delivery completion,
utilities can monitor and manage customer commitments
as well as speed order to cash time for contractors.

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Utilities should also consider the expertise of their MWFM


vendor when selecting a solution. It is absolutely critical
that the vendor possess knowledge of the utility industry
operating characteristics as well as field service processes,
key performance indicators, and best practices. Knowledge of
these factors ensures that the utility will achieve measurable
and sustainable improvements in customer satisfaction and
service productivity and efficiency in both the short and long
term. More importantly, utilities who select a cloud solution
provider with this level of expertise can rest assured that new
releases and updates will continue to incorporate best practices
as well as include new developments (i.e., applications) in
work force management.

Utilities seeking to implement a cloud based MWFM should


also take into account the vendors experience in the utility
industry. Ideally, the vendor should be able to demonstrate how
its solution has been able to facilitate collaboration between
key stakeholders in the service delivery value chain - customers,
operations, and field resources. The system should be designed
by the vendor to provide centralized optimization of field
resources regardless of the duration and complexity of the
work. In other words, manage workflows ranging from routine
customer visits, to emergency outages, to short and long-cycle
construction projects. The vendors solution should not only
be able to support multiple business lines within the utility
but facilitate the sharing of work and resources between these
business lines. This experience is vital towards maximizing cost
savings and Return on Equity.

About the Author


Michael R. Blumberg is a Certified Management
Consultant (CMC) and president of Blumberg Advisory
Group, Inc. His firm focuses on providing clients
with strategic and tactical assistance for improving
the overall profitability and quality of Field Service
operations. Michael is a results oriented, business
leader with unequaled background in the HighTechnology arena. He is highly skilled at developing
innovative business strategies that effectively respond

to industry trends and market requirements, and


leverage internal systems and processes resulting in
improved financial and operation performance for his
clients. Mr. Blumberg is a prolific author and frequent
speaker at industry events and conferences. Michael
may be reach at 855-643-9060 ext. 703 or via email at
michaelb@blumberg-advisor.com. Michaels blog is
accessible at www.michaelrblumberg.com. Follow him
on twitter via @blumberg1.

2016 Blumberg Advisory Group, Inc. All rights reserved. No part of the material protected by this copyright may
be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording,
broadcasting or by any other means without written permission from Blumberg Advisory Group, Inc.

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07

About ClickSoftware
ClickSoftware is a leading provider of automated mobile
workforce management and service optimization
solutions for the enterprise, both for mobile and inhouse resources. As pioneers of the Service chain
optimization concept, the companys solutions provide
organizations with end-to-end visibility and control of
the entire service management chain by optimizing
forecasting, planning, shift and task scheduling, mobility
and real-time management of resource and customer
communication.

Available via the cloud or on-premises, ClickSoftwares


products incorporate best business practices and
advanced decision-making algorithms to manage
service operations more efficiently, in a scalable,
integrated manner. ClickSoftwares solutions have
become the backbone for many leading organizations
worldwide by addressing the fundamental question of
job fulfilment: Who does what, for whom, with what,
where and when. The company is headquartered in the
United States and Israel, with offices across Europe,
Latin America and Asia Pacific.

Contact Us
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