realizing hidden value: optimizing utility field service...

Energy and Utility Insights

Utilities

Realizing Hidden Value: Optimizing Utility Field Service Performance by Measuring the Right Things

© 2007 Sapient © 2007 Sapient corporation

About the Authorrob Milstead serves as the north american lead for Sapient’s energy and Utilities practice. in this capacity, he manages strategy and business develop-ment 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 implementa-tions, 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 chal-lenges 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: [email protected]

Realizing Hidden Value

� © 2007 Sapient corporation

Report HighlightsField 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 analy-

sis. 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 imple-

ment 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.

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

Contents

�© 2007 Sapient corporation

Navigating a Challenging Operational EnvironmentShrinking profit margins, challenging regulatory envi-ronments, 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 upgrad-ing 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



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 advan-tage 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 met-rics, allocate service resources, and forecast needs accurately. Yet customer expectations are a power-ful 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 imple-ment 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 manage-ment 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 pro-vide long–term benefits.

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

Not All Data Is Created EqualDespite 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 perfor-mance 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 cre-ates 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 productiv-ity 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.

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

Talent and effort metrics provide important insights into field force effectiveness,

helping utilities optimize performance.



Why Time Data Is CriticalWhile orders can vary considerably, top performers will execute their work as efficiently as possible, regard-less 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.

By analyzing employee time, utility supervisors can create a holistic workforce management methodol-ogy that considers and optimizes workforce planning, workforce scheduling, and performance management, replacing the predominantly manual and subjec-tive 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.

additionally, utilities can use new insights to iden-tify 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 criti-cal approvals for implementing new performance management processes and tools. While this can be difficult, utilities can bol-ster their position by developing and articulating a solid business case that provides a compelling rationale, new metrics pro-posed, measurement strategy, roadmap, and workforce communication plan. Utilities should be prepared to dis-cuss how they will coach and train low achievers to improve their productivity.

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

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.

�© 2007 Sapient corporation © 2007 Sapient corporation

Moving ForwardSo 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, specifi c objectives, and the mea-surable business results of an optimized field service performance management

program. rolling out a new performance management tool or process requires effective change manage-ment. 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 specifi c objectives they are seeking and why. Most importantly, the project team should identify specifi c 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

A Roadmap for Change

3. Understand what you have: conduct technical due diligence of what data is available in current and planned systems. Determine the feasibility of col-

lecting required metrics before implementing the new performance management tool and processes. it may be possible to retrieve some information directly, but other metrics may be derived from multiple pieces of data. the process of retrieving infor-mation from multiple sources can be tricky so early analysis will help inform the total effort and the overall timeline for the implementation.

4. Prepare to measure progress: analyze your existing data, if possible, to create a baseline that leverages histori-cal data. if you’re introducing new metrics

for performance evaluation, it may be difficult to determine a baseline. intuition and industry bench-marks 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.

5. Analyze options: create a detailed busi-ness case of possible solutions. one size does not fit all, given the wide variances in utilities’ sizes, services, territories, and

field forces. Measurement systems will range from packaged software to existing system enhancements and process changes. evaluate all of your options and

understand their costs and business value to focus your decision making. performance management does not have to be an expensive problem to solve. Significant value can usually be achieved with minimal invest-ment. completing a business case will help you evaluate your options against critical criteria.

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 implementa-tion. 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.

The data you already possess is often the critical starting

point for creating new measurement baselines.

�© 2007 Sapient corporation © 2007 Sapient corporation

Leading Energy Services Company Uses Insights to Optimize Field Force EffectivenessSapient worked with a leading energy services pro-vider 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.

ConclusionSapient 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 employ-ees 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.

Case Study

• 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.

Business Challenge



About Sapient’s Energy and Utilities PracticeSapient 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 suc-cess has led to multi–year partnerships with our clients, enabling us to serve as a trusted advisor and collaborator on solving their toughest challenges.

�. proven expertise in solving clients’ challenges, with a success rate that is three times the industry average

�. Deep insights into energy and utility companies’ strategic and operational imperatives, gained in the context of multi–year partnerships with our clients

�. Global access to the right expertise, with a highly skilled workforce that is rigorously trained in the industry business processes, applications, and infrastructures

�. a unique delivery methodology, Sapient | Approach, that delivers results in weeks, not months, enabling companies to identify and quickly respond to market changes

What Makes Sapient Different Sapient helps energy and utility companies suc-ceed. 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.

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

• 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 compre-hensive planning process, to inform workforce planning, budgeting, and operational reporting

Results

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For more information, please visit www.sapient.com/utilities or contact us at + 1 617 761 1676.

© 2007 Sapient corporation © 2007 Sapient corporation

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