Customer Experience Management Transformation 5th November 2014

[European Utility Week – Disclosure] Additional disclosure with written approval from HCL only

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Introductions / Contact

Kris Hillstrand SVP – Technology and Operations Kris.H@HCL.com 617.818.0392 (m/txt)

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HCL At a Glance

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Balanced Portfolio, Strategic Focus on Utilities

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Agenda

¡  Define Issue / Problem: Utilities Customer Experience. Obstacles to Service Transformation / Smart Energy Agenda

¡  Describe HCL approach to problem resolution: HCL Customer Experience Management (CEM) solution offering.

¡  Highlight a case study – Direct Energy Alberta CEM transformation.

Slides 4-5

Slides 6-9.

Slides 10-17

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Customer’s experience expectations have been established by innovators outside of the Utilities Industry

¡  Table stakes: Customers engage in the energy category infrequently – when they do, they expect service excellence.

¡  Channels: Interaction expectations are rapidly evolving. Increasingly, consumers expect to interact on their terms, on their time, and on their favored platform.

¡  Engagement: Customer satisfaction is enabled through, customer awareness and anticipation. Trust is enabled though operational transparency and education.

¡  Simplicity: Best in class customer experience is uncomplicated. Human factors engineering and industrial design matter. Customers expect an elegant interaction masking the complexity of the markets and technologies that serve them.

¡  Brand Consistency: It helps to stand for something and to reinforce what you stand for in every interaction.

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Smart Utility / Smart Home – Customer Experience Aspirations

Ambition

¡  Establish customer relevance of smart meter and other near real time data.

¡  Establish role of trusted energy advisor to customers.

¡  Position goods and services beyond the meter:

§  Innovative demand response / direct load control

§  Core Positioning amongst the “internet of things”. Smart Home Services Aggregation / Smart Energy Consumption Management

§  Energy related intelligent asset sales, financing, operations (from thermostats to rooftop solar).

Current Limitations to that ambition

¡  Engagement – Driving a rich “conversation” with consumers. Anticipating needs and providing proactive service based upon behavior, interaction, market trends and the needs of “like” customers. (think Amazon, Netflix, Harrah’s).

¡  Channel Shift – Increase customer self service via Web, Mobility, Social Media, Text, IVR, others. (think USAA, Apple)

¡  Transparency – Provide situational awareness in an age of of increasingly transparent logistics (think UPS, FedEx, Uber).

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Agenda

¡  Define Issue / Problem: Utilities Customer Experience. Obstacles to Transformation.

¡  Describe HCL approach to problem resolution: HCL Customer Experience Management (CEM) solution offering.

¡  Highlight a case study – Direct Energy Alberta CEM transformation.

Slides 4-5

Slides 6-9.

Slides 10-17

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The Utility CEM Business Case Challenge

Customer Experience Management Transformation – is difficult to “green light”. More difficult to execute.

¡  CIS replacements are complex, costly and disruptive - impacting hundreds of core business processes, thousands of users and millions of customers. And CIS alone falls well short of the state of the market.

¡  Operational benefits, technology and implementation costs are uncertain. Departmental distrust inhibits accountability and drives to incremental, tactical and often disjointed solutions.

¡  Transformation benefits are often discounted by uncertainty and diffuse stakeholder accountability.

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In response HCL CEM offers:

¡  Reference Architecture across all aspects of Customer Experience.

¡  Multi Channel customer interaction with industrialized performance measurement. Social Media, Web, Mobile, Agent assisted, IVR, virtual agent and chat with conversation portability across platforms.

¡  Differentiated customer experience (interaction, correspondence selling) enabled by real time analytics / in memory computing.

¡  Transformation Project, Technology and Business Operations Cost and Benefit Certainty.

¡  Business Process Operations – tailored to balance your control, cost and risk objectives.

¡  Financial and Solution constructs designed to optimise Opex, CapEx, Cash flow, Recovery or other objectives.

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CEM – Alternatives

Solution Construct Premise Delivered Private Cloud Multi-Tenant Cloud

Operations Performance Risk In Sourced Multi Sourced

Champion / Challenger HCL Managed Service HCL

Transitional Operations

Scope / Transformation Traditional CIS CIS +

Traditional Channels CIS+ Integrated Multichannel

CIS + Integrated Multichannel & Multi Actor

Investment Performance Risk Fixed Price / Fixed Scope Implementation

Fixed Price Implementation w/ Operational Cost Hedge

Fixed Price Project w/ Central Operations Control & Flex Operations

Fixed Price Project w/ Fixed Price Operations & Certain Business Results

CEM – Alternatives Direct Energy Configuration

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HCL’s Customer Experience Management Reference Architecture

IVR

Scale Operations Centers

Predictive Dialer

Routing

Specialty Ops Center(s)

CRM (campaigns)

Customer Information

Credit & Collections

Back office

CRM / CIS / Billing Contact Mgt.

Planning & Analytics

BW

WFM

Marketing / Credit

Ops. Analytics

Customer’s Phone, eMail, Web, SMS, Social Media

Technologies: Private Cloud, Multi-tenant Cloud or Premise delivered.

¡  SAP Customer Interaction and Revenue Management Cycle including: ISU, CRM, Open Text, HANA BW, Real Time Offer Management, Mobility and Web Solutions

¡  Genesys Interaction Channel Management: Automated Call Distribution (ACD), IP Telephony, Interactive Voice Response (IVR), Call Recording, QA, Speech Analytics, and back office workforce management (iwD), Web/Mobile/Voice Context Data Mgt., Social Analytics Integration

¡  Topyx Learning and Content Management, Blue Pumpkin Forecasting and Workforce management, Services Now IOM

HCL – Utilities and Power CEM Operations Services

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•  Business Process Operations: Houston TX || Guatemala City Guatemala || Manila Philippines •  Technical Operations: Noida India || Chennai India || Houston TX •  Data Center Operations: Wooddale IL || Richardson TX

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Service Alternatives

¡  Operations SME augmentation during project Execution

¡  Interaction Forecasting, Workforce Scheduling, Real Time Management and Performance reporting

¡  Transitional Sourcing / Bubble Staffing: Post Go Live “Stabilisation” Business Process Operations Services

¡  Specialty Operations (Escalations, Investigations, Change Management / Training)

¡  Scale Operations

¡  Managed Services with committed / certain business results.

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Agenda

¡  Define Issue / Problem: Utilities Customer Experience. Obstacles to Transformation.

¡  Describe HCL approach to problem resolution: HCL Customer Experience Management (CEM) solution offering.

¡  Highlight a case study – Direct Energy Alberta CEM transformation.

Slides 4-5

Slides 6-9.

Slides 10-17

……………………………… ……………………

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Direct Energy – Corporate Overview

North America Europe / ROW

Upstream: E&P, pipeline, generation

Trading / Storage

Downstream (retail)

We are Here

HCL serves the Direct Energy North American Retail line of business. Direct Energy North America is a $10B subsidiary of Centrica PLC, a FTSE 100 company.

Geography Line of Business

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Direct Energy - Alberta

DE Alberta

§  1+ Million customers

§  Gas and Electric

§  Regulated and Competitive

§  2+ Million calls per year

Rest of DE retail

§  2.25M customers

§  Gas and Electric

§  Competitive

§  7+ Million calls per year

We are Here

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CEM – Alternatives

Solution Construct Premise Delivered Private Cloud Multi-Tenant Cloud

Operations Construct In Sourced Multi Sourced

Champion / Challenger HCL Managed Service HCL

Transitional Operations

Scope / Transformation Traditional CIS CIS +

Traditional Channels CIS+ Integrated Multichannel

CIS + Integrated Multichannel & Multi Actor

Cost / Benefit Certainty Fixed Price / Fixed Scope Implementation

Fixed Price Implementation w/ Operational Cost Hedge

Fixed Price Project w/ Central Operations Control & Flex Operations

Fixed Price Project w/ Fixed Price Operations & Certain Business Results

CEM – Alternatives Direct Energy Configuration

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Direct Energy - Implementation of HCL reference Architecture

IVR

Scale Operations Centers

Predictive Dialer

Routing

Specialty Ops Center(s)

CRM (campaigns)

Customer Information

Credit & Collections

Back office

CRM / CIS / Billing Contact Mgt.

Planning & Analytics

BW

WFM

Marketing / Credit

Ops. Analytics

Customer’s Phone, eMail, Web, SMS, Social Media

Technologies: Private Cloud, Multi-tenant Cloud or Premise delivered.

¡  SAP Customer Interaction and Revenue Management Cycle including: ISU, CRM, Open Text, HANA BW, Real Time Offer Management, Mobility and Web Solutions

¡  Genesys Interaction Channel Management: Automated Call Distribution (ACD), IP Telephony, Interactive Voice Response (IVR), Call Recording, QA, Speech Analytics, and back office workforce management (iwD), Web/Mobile/Voice Context Data Mgt., Social Analytics Integration

¡  Topyx Learning and Content Management, Blue Pumpkin Forecasting and Workforce management, Services Now IOM

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Engagement Scope – Direct Energy Business Process Operations

Front Office Services - inbound and outbound call handling including:

•  Service,

•  Sales,

•  Billing,

•  Credit

Back Office Services including:

•  escalations,

•  correspondence,

•  billing exception management,

•  cash processing,

•  credit data management

•  offline interactions – eMail, SMS, and chat (future)

500 (peak), 300 (steady state) FTEs

Service delivery locations in Manila, Guatemala City, Noida

•  Symmetric Scale Operations in Manila and Guatemala City

•  Command Center / Escalations in Houston,

•  Shared Service workforce forecasting / scheduling in Noida

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Selected KPIs / Commercial Performance Measures

Technical Performance Business Performance

•  Go Live Date

•  Severity 1 errors ahead of Go Live date

•  Percentage of Business Requirements

met ahead of go live date

•  System Availability

•  Incident response times

•  Incident resolution times

•  Self Service Adoption Rates

•  Billing Accuracy

•  Billing Timeliness

•  Average Speed of Answer

•  Average Handle Times

•  First Call Resolution Rates

•  Customer Satisfaction

•  Compliance with Law and Regulation

Given HCL’s construction, technical and business operations responsibilities, commercial incentives and penalties are aligned to both inputs (technical performance) and outcomes

(business performance).

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Committed Benefits

Certain business outcomes –

¡  Charging Mechanism: Cost per Customer invoiced monthly

¡  Call option – right to insource / resource at any time at known cost

¡  Operational and Technical Transparency

¡  Post Go Live Operations Performance Certainty – HCL absorbs all “change” human performance effectiveness risk

Operations outcomes

¡  Eight figure operations cost reductions

¡  >20% increase in customer self service

¡  Committed levels of Customer Satisfaction, Agent Efficiency, First Call Resolution, Billing accuracy and timeliness, Collections list penetration

¡  Cross Channel interaction awareness, consistency, visibility, Cross Sales / Up Sales.

¡  Differentiated service levels and interaction paths

Technical outcomes –

¡  Fixed price for certain outcomes.

¡  Full asset and Intellectual property transfer at conclusion of services term

¡  Operational platform including:

§  SAP ISU CCS, HANA, Mobility, and Web Self Service, Real Time Offer Management (next phase)

§  Genesys, ACD, IVR, VOIP, SoftPhone, Speach Analytics, MultiChannel Integration

§  Services Now – IT Service Management Platform

§  Topyx - Learning management and Content management solution.

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Background slides

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Customer service leaders

Company   Excellent   Good   Fair   Poor  JPMorgan  Chase   31   40   18   11  Ace  Hardware   30   51   15   4  Google   30   49   14   7  Nordstrom   30   50   16   4  Wells  Fargo   30   37   18   15  MicrosoD   30   47   18   6  Bed  Bath  &  Beyond   29   56   13   2  Hampton  Inn   29   51   17   3  Sheraton   29   49   19   2  Lowe's   29   50   18   3  Capital  One   29   38   21   12  eBay   29   50   16   6  Kohl's   29   49   18   4  AutoZone   28   55   15   2  Subway   28   46   21   4  Groupon   28   44   19   9  U.S.  Postal  Service   28   44   19   8  Dollar  Tree   28   44   23   5  Dell   28   47   17   9  Holiday  Inn   28   51   18   3  CVS   28   49   18   5  Home  Depot   28   50   17   6  JPMorgan  Chase   28   40   19   13  DirectTV   28   31   21   20  

Source: WSJ / Zogby. Analytics 2014

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Notice / Transparency / Education