ACCELERATING YOUR PATH

TO METER-TO-CASH AND
REVENUE-CYCLE EFFECTIVENESS
Ed Krause, Utilities Partner and Meter-to-Cash Leader, CSC

Whether youre in the process of deploying smart meters or your deployment

process is complete, your contact centers, billing operations, business processes,
information systems applications and employee training efforts are likely
lagging behind.
When it comes to smart meter and smart grid deployment, few utilities have
planned for the impact of new technologies on back-office operations and
systems, and the processes and people that drive them.
Meter-to-cash innovation and efficiency is essential to the profitability and
viability of your business. The pressure is on to reduce your costs and improve
service by replacing your manual, paper-based processes with new technologies.
And, because these functions are the primary link to your customers and revenue
generation, its critical that you introduce innovation that enhances revenue
collection while boosting customer satisfaction.

Is your organization ready to seize the opportunities ahead?

Your business processes and channels must enable a new wave of Internetsavvy and smart phone customers who will demand detailed access to
usage and billing information via the Internet or in-home devices.

The Impact of Meter-toCash Applications

Effective meter-to-cash
applications can mitigate the
impact of:
Outdated, poorly-defined
business processes
Escalating amounts of data
Changing and complex rate
structures dynamic pricing
on legacy billing systems
Customer care/call centers,
billing, payment, and collection
costs
Increasing contact volumes

Your customer service representatives and account representatives will be

called upon to walk customers through the new technology and new
functionality which will significantly increase your customer-service
demands.
Youll need to leverage new technology and functionality to more efficiently
translate customer-usage data into cash receivables. But, with numerous
companies pitching numerous solutions, how do you determine which
technology and approach is best to meet your specific needs? How do you
integrate your back-office systems to enable the new technology?
Your customer systems and processes must be able to handle the
tremendous increase in data, as well as the complex rates calculated by
time-of-day and time-of-use structures. This is the most significant and most
costly factor with implementing smart metering/grid.
To many, the challenges of the smart utility are comparable to the deregulation
wave that occurred a decade ago. The coming changes will be just as large and
demanding to your business operations, processes and back-office systems.
Though most utilities prefer to take on change in small bites, there is no avoiding
one truth: once you commit to a smart-metering initiative, youll be in and in
a big way. But with these challenges also comes great opportunity.

Optimizing Operational Efficiencies, Improve Customer Satisfaction

Due to the need for significant investment, you may be utilizing manual backoffice processes to accomplish cycle customer billing. The vast majority of
utilities still mail paper bills and a large majority of customers continue to pay by
check. A great number of customer contacts are still handled by live agents at
significant cost.

Smart utility technology will effect

meter-to-cash operations by:
Having an initial high cost and
impact to legacy infrastructure
and systems of AMI
implementation
Causing the need for substantial
changes to business processes
from account set up to
account closure/disconnect
Prompting rapid advances in
monitoring, communication and
display devices
Generating a high level of
complexity in billing and
customer interactions as a result
tiered, real-time and peak-rate
structures

In light of the fact that the average cost per customer call soared from $3.93 in
2004 to an average of over $5.25 in 2010 with some reaching as high as over
$6.50 Obviously, Utilities are feeling the pressure to optimize operational
efficiencies and reduce costs. Unfortunately, these costs will only continue to
increase if the utility continues to operate as it had 10 to 15 years ago.
According to a Chartwell survey, the most pressing business imperative facing
utilities is the need to embrace new, Web-based technologies (even Smart
Phone applications) to improve efficiencies and achieve high levels of
customer satisfaction.
But utilities must also improve credit and collections. By better managing
customer data, you can improve billing accuracy and ensure that payment is
current for all services rendered.

Meter-to-Cash Functions Are Growing in Importance

Meter-to-cash functions generate revenue and touch every critical back-office
area. So the more efficient you can make these processes, the better your
business will perform. Lets examine these functions.
Account creation involves processing a customer request, checking credit,
establishing the account and generating a field-service ticket to activate
service (in some cases installing the meter).
Field services involves scheduling, dispatching, routing, order tracking and
asset management.

Using advanced analytic

programs and software to assist
customers

Meter data management collects and validates customer usage, and creates
billing determinates that are sent to the Customer Information System (CIS),
where the appropriate rates are applied to the customers usage. The bill is
then calculated, verified, printed, mailed, emailed, etc.
Payment processing where your customers payment is received and
applied can be handled by credit card payment, check with the bill stub,
payments a local pay stations within local cities, and in some cases payment
directly to your utility.
A customers payment history is closely monitored within the CIS, and when
a customer fails to pay (or pay late) the CIS applies late charges and in
some cases issues disconnect notices for temporary termination of services.
The credit and collections area also has the ability to adjust charges, process
credit requests, collect on late payments, and process write-offs for bad debts.

Most Pressing Business Challenges in Billing and Payment

Technology
(CIS, Integration,
Web-based, etc.)

20

Credit and collections

While Many O and M Costs

Continue to Rise

13

Migrating customers
to alternative
billing programs

10
Average Cost Per Call

Reduce bill exceptions

2007

Reduce costs

2004

10

15

20

$4.57

$3.93

$2.00

$4.00

Number of Respondents to Chartwell Survey

Source: Chartwells Customer Care Report 2008

Point of View: Meter-to-Cash Function

Meter-to-Cash Involves All the Critical Back Office Areas of Utility
Account
Creation
Process Customer
Request
Perform Credit
Check
Establish Account
Generate Field
Service Ticket

Field
Services

Scheduling
Dispatch
Routing
Order Tracking
Asset
Management
(Meter Asset)

Meter Data
Management
Data Collection
Data Validation

Billing

Payment
Processing

Receive Payment
Prepare Bill
Process Payment
Process/Price
Usage Data
Apply Payment
Bill Verification
Generate and
Transmit Bill (EBP
Print and Mail, etc.)
Process Complex
Bills
Update A/R

Credit and
Collections
Process Credit
Request
Adjust Charges
Collections
Issue Shut-Off
Order
Process
Write-Offs

Customer Care
Process In-Bound Customer Requests
Outage
Service Order/Service Request
Account and Payment Information
Customer Complaints/Complements

Process In-Bound Customer Requests (Contd)

Customer Programs
Disconnect/Reconnect
High Bill Complaint
Process Out-Bound Customer Contacts

These functions incorporate all aspects of the ongoing revenue cycle.

Inefficient processes affects revenue, customers and the Public Utility
Commission (PUC) in the following ways:
Loss or delay of revenue collection
Unnecessary costs impact profits
Lowers customer satisfaction and increases complaints
Regulatory bodies mandate service levels and remedies
By improving your meter-to-cash performance, you can improve cash flow.
Also, by boosting efficiency and performance, youll streamline operating costs
and provide enhanced customer service.
Typical issues and symptoms that
cause inefficiencies are:
Budget constraints within
legacy CIS systems and meter
data management systems
Multiple non-integrated
applications (issues tracking,
CIS, scheduling, routing and
outage management)
Poorly defined business
processes
Manual back office processes
Increased customer contacts
and demands
Inefficient customer contact
management and issue
resolution processes

Where Should You Begin?

When it comes to managing meter-to-cash functions, you may be looking for
ways to introduce technological innovation and improve collections. Your
solution should address these concerns:
Where are the customer service expectation gaps with my current
services?
What strategic or operational changes will impact the volume and cost of
our bad debt write-offs?
How do we balance technology and human interaction to provide quality
customer care at a reasonable cost and within regulatory guidelines?
How can I improve business process and information technology
capabilities to improve quality and drive down meter-to-cash costs?
What alternative delivery models for the meter-to-cash functions might
provide greater efficiency and cost/volume flexibility (e.g., vendor
services, BPO and IT sourcing)?
You need to know how, specifically, a transition to smart meters will impact
your operations.
Start by defining all the barriers standing between your current state and the
promises of smart utility innovation.

Outdated and Legacy CIS Billing Systems

Because many utilities are saddled with outdated billing systems and, in many
cases, still using paper-based processes and other manual processes they have
limited options for clearing accounts receivable backlogs. Additionally, many
legacy CISs cannot handle dynamic pricing and rates that will be applied,
potentially, to thousands of readings per month. Investing in new or upgraded
systems could ease such backlogs it could allow you to consolidate/centralize
your billing operations so you may better mine billing data and produce accurate
invoices that recover full payment for services rendered but many utilities are
reluctant to make specific meter-to-cash investments. The result: revenue is
being left on the table.

Savvy, Demanding Customers Require More Customer Engagement

Todays average utility customers have been transformed by the Internet. They
can acquire instant information bank balances, mortgage statements, the
ability to pay bills online to manage their bills and financial affairs.
Specifically, they demand the same capabilities to manage their utility bills. They
seek instant access via web applications and Smart Phone interaction to detailed
utility billing information. But customer surveys at utilities across the country
show that customers are not satisfied with the services they are receiving.
Todays utility customers are pressing you to deploy smart metering technologies
so they may proactively manage their energy usage and make intelligent
decisions. They want online tools that enable them to see what their appliances
are consuming. They want the flexibility to control their consumption, by
avoiding peak rates, so they may reduce their consumption, their bills and their
carbon footprint.
Web functionality will play a sizable role as smart utility functionality is
embraced its also critical in meeting the information needs of customers in a
manner that reduces phone calls to your customer services representatives. Youll
must use new media web chat, texting, messaging and mobile applications
to offer the conveniences your customers demand.

Inability to Handle a Massive Increase in Data Flow

Modernizing your processes, procedures and the back-office systems to handle a
massive increase in data flow will be a considerable challenge.
Consider: whereas traditional meters produce a reading once every month, smart
meters produce a reading every 15 minutes or 2,880 times a month (when there
are 30 days in a month). In some cases, utilities are planning on reading down to
the minute.
To handle such an increase in data, you must develop new business processes
and integrate disparate back-office systems into a single, enterprise-wide system
that provides detailed visibility into customer information, performance metrics
and your entire supply chain. Data storage and data management should be part
of your overall smart metering strategy. This is one that will likely come back to
haunt you in the end.

Regulatory Bodies
A third challenge involves regulators. They are pressuring you to embrace the
capabilities of the smart utility to monitor, predict and prevent or reduce
outages, while you improve operational efficiencies and drive significant
improvements in customer satisfaction. In many cases, they are not giving
utilities more money through increased rates, so utilities will have to be smarter
and more efficient.

Business Impact Posed by New Processes and Technologies

To improve efficiency, customer satisfaction and meet the demands of
regulators, modernization of your processes, systems and tools most of them
designed to support a far less data-intensive program will be a necessity.
But such modernization leads to important questions that demand
comprehensive answers:
Which business processes will be impacted the most by the installation of
new technologies, which include smart meters, smart thermostats and
home area networks? The time from outage detection to resolution will be
impacted the most, according to many utilities.
Which applications will be impacted? Work and asset management
applications? Outage management applications? Integrated Voice
Response (IVR) for outage notification? Web portals for outage
notification?
How will your staff be impacted? How will field crews, dispatch and
customer service representatives need to adjust to a host of new demands?

Your Path to Improvement: Meter-to-Cash Effectiveness

Assessment, Strategic Modernization
To improve meter-to-cash services, many utilities are moving forward on smart
utility programs; they have begun, or are considering, advanced metering
infrastructure (AMI) and smart grid installations and pilots.
AMI will provide utilities with the information needed to promote energy
efficiency, detect outages and fraud, deliver more accurate billings, as well as
the potential to offer pre-paid power options and remotely switch supply
on/off.
Utilities with customer analytics and/or customer relationship management
(CRM) applications will be able to use this new data to perform advanced
analytics and predictive modeling to better understand their customers energy
usage patterns and potential interest in other services and appliances. Such
analytics can provide insight on commercial and retail customer usage patterns
and future energy requirements based on attrition, population growth and
changing demographics.
The addition of combining customer usage data with other information, such
as weather, calendar, econometrics and pricing, etc., will allow for more
accurate predictive decisions based on granular data.
The result: more timely and accurate information that is used for load and
demand forecasting to make better decisions for purchasing supply and
managing load across the gridlines. And, to the end customers, better service
and the ability to manage usage patterns to decrease their energy usage.
Creating specific pilots within a specific utilities service territory is a very useful
investment that can determine the strategic path for AMI/smart grid. Pilots will
determine the real cost of a full deployment, validate the technology and
determine the business changes that will be needed within the organization.
Considering the many challenges and obstacles that stand in the way of true
innovation and effectiveness, the most efficient, cost-effective way to advance
these improvements is to take a comprehensive, strategic approach.

Rather than focusing on various projects related to meter-to-cash functionality,

we recommend a four-phased assessment approach that will define, from the
enterprise level, issues, challenges, opportunities and strategies to allow you, in
the most economical manner possible, to advance a back-office program that
generates the highest level of revenue at the lowest cost.
A rigorous methodology will help you:
Discover You need to gather information from recent surveys, anecdotal
information and the current IT strategy, current organization charts,
budgets, and any improvement projects that may be in the pipeline. You
need to collect any process documentation that may exist, collect metrics
and performance reports and define interview strategies. Plans for smart
metering/AMI initiatives should be input to this discovery phase.
Assess The assessment process involves interviewing representatives
from your meter-to-cash organizations and relevant IT areas. Analyze
responses to the interview questions, then analyze the data collected
during the discovery phase to define costs, performance metrics, and so
on. Youll also need to determine, define and analyze any process
deficiencies.
Recommend During this phase, you need to compare your current
performance and cost metrics against industry norms. You need to
identify challenge areas (organization, roles, process, IT, etc.), then craft
targeted recommendations for each M2C functional area. You need to
quantify the potential gains from making recommended improvements
and prioritize a list of recommendations across assessment areas.

CSCs Assessment Approach

A Four-Phased Approach to
Developing the Improvement Plans
for Increasing the Effectiveness of
the Meter-to-Cash Process

Plan During the planning phase, you need to create a high-level plan,
strategy and roadmap for recommended changes (including timing,
sequencing/dependencies). At this phase, you will determine initial
investment requirements and target-savings ranges. This will create a
case for action.

ASSESS
1 Focus and Prioritize

Major Activities

Discover

Gather information
(recent survey,
anecdotals, Ops and IT
strategy improvement
project portfolio, current
org charts, budgets, etc.)
Collect Process
Documentation (any and
all that exists)

Assess

Recommend

Interview representatives
form M2C organizations
and relevant IT functions

Compare current
performance/cost metrics
to industry norms

Analyze responses to
interview questions

Identify challenge areas

(organization, roles,
process, IT, etc.)

Analyze data collected in

discovers costs,
performance metrics, etc.

Collect metrics,
performance reports

Analyze specific process

deficiencies

Finalize interview list

Assess M2C function

against maturity model

Craft targeted
recommendations for
each meter-2-cash
functional area

Plan

Create a high-level plan

and Roadmap for
recommended changes
(including timing,
sequencing/dependencies
Initial investment
requirements and target
savings ranges Case for
Action

Quantify improvement
potential

Work
Products

Prioritize list of
recommendations across
assessment areas
Assessment data
collection requirements
Stakeholder interview list

Data analysis results

Interview results
Consolidated analysis

Prioritized lists of
improvement
recommendations

High level plan for change

initiatives and directional
business case

Assessing Your Meter-to-Cash Functions

As you work through the four phases of assessment, youll analyze six areas:
Business Processes Focus on what is done, how activities are carried out
and in what sequence, what rules are followed, and the type of results
obtained.
Organization Examine the people and organizations involved in the
change. These include your culture, capabilities, roles, team structures and
organizational units.
Location Determine where your business is conducted.
Technology Assess the hardware, system software enterprise
architecture and communications infrastructure that enables your support
solutions and services.

Ed Krause
Utilities Partner and
Meter-to-Cash Leader, CSC
Ed Krause is a partner with CSCs
Global Chemical, Energy & Natural
Resources Group and leads CSCs
Meter-to-Cash/Revenue Cycle
Management solution practice.
Hes also a client relationship
executive within our utilities
practice.

Application Focus on the capabilities, structure, and user interface of

software applications and application components that will be used to
support the change.
Data Concentrate on the content, structure, relationships and business
rules for the data used by the business processes, applications and
organization.
Once the current state of your operations are thoroughly assessed once you
have a clear vision of the areas you can improve youll be able to define a clear
path for improving your meter-to-cash systems and processes in line with your
strategic business goals.
This will help you define a set of short- and long-term high-value initiatives that
are targeted to improve your effectiveness and/or measurably reduce operational
costs that align with your smart utility initiatives.
At this point, youll be able to establish a value map around three considerations:

For more information about the

optimal path to Meter-to-Cash
and revenue-cycle effectiveness in
the smart utility era, contact us at
PowerYourPerformance@csc.com
or call us at (U.S.) 800.272.0018.

Business Benefit The estimated level of benefit (high, medium, low) that
each initiative can deliver to your strategic business units.
Cost Estimated level of cost for the implementation of the initiative.
Strategic Fit Estimated level of support for your overall meter-to-cash
strategy.
By following this path, youll devise a sound strategy that leverages technology
innovations to drive continuous improvement in your operations in the most
rational, logical, cost-effective manner allowing you to take the long view on
preparing your systems and operations for the data-intensiveness of the
smart utility.

Worldwide CSC Headquarters

The Americas
3170 Fairview Park Drive
Falls Church, Virginia 22042
United States
+1.703.876.1000
Europe, Middle East, Africa
Royal Pavilion
Wellesley Road
Aldershot, Hampshire GU11 1PZ
United Kingdom
+44(0)1252.534000
Australia
26 Talavera Road
Macquarie Park, NSW 2113
Australia
+61(0)29034.3000
Asia
20 Anson Road #11-01
Twenty Anson
Singapore 079912
Republic of Singapore
+65.6221.9095

About CSC
The mission of CSC is to be a global leader in providing
technology-enabled business solutions and services.
With the broadest range of capabilities, CSC offers clients
the solutions they need to manage complexity, focus on
core businesses, collaborate with partners and clients,
and improve operations.
CSC makes a special point of understanding its clients and
provides experts with real-world experience to work with
them. CSC is vendor-independent, delivering solutions that
best meet each clients unique requirements.
For 50 years, clients in industries and governments worldwide
have trusted CSC with their business process and information
systems outsourcing, systems integration and consulting needs.
The company trades on the New York Stock Exchange under
the symbol CSC.
www.csc.com

Copyright 2010 Computer Sciences Corporation. All rights reserved.

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