report - strategic interventions for a customer-driven distribution utility
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Strategic Interventions for a Customer-driven Distribution Utility
EXECUTIVE SUMMARY
The Electricity Act has given way for introduction of competition in the retail
markets in many forms a licensee developing parallel distribution infrastructure
in an area, customers having a choice in selection of their distributors under open
access provisions etc. This in turn requires distribution utility processes to
undergo major changes to evolve as a more customer friendly organisation. And
the business model would also have to change from being an asset and
engineering intensive business to a commercially driven customer oriented
businesses which derive their value from their ability to attract and retain
customers.
In order to achieve tangible improvements in the customer service, it is essential
to identify the typical steps that each customer will go through, which can be
termed as customer life cycle management process. The process starts with a
new customer seeking service. The next step is service provision, which includes
the basic service of providing reliable and quality power at affordable tariffs to
meet the demand, and the various ancillary services such as fault repairs, changes
in connected load, connection shifting etc. along with the value added services
such as cost reduction through DSM, energy audit services etc. For this a
proactive approach by the utility is important.
The next part of lifecycle covers the charges for the services given and the
collection of dues. This forms the most critical area of reforms and major
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dissatisfaction arouses out of this reason. Any inefficiency in the billing and
collection processes results in swift exit of customers.
Relationships in electricity business, not being time bound; so it is necessarily
required that instead of transactional relationship with the customers, the utilities
focus on process approach such as
process reorientation towards customer satisfaction identifying the
touch points with customers.
simplified entry procedures advance planning of networks to ease
subscription to consumers
use of integrated IT & MIS in improving customer relationships
electronic presentation, payment and reminder of bills, billing and
payment history, online resolution of simple bill disputes, online fault
booking etc.
value addition by providing ancillary services
innovative and customer friendly measures call centres, drop boxes at
their convenience
The project aims to bring forth such areas in which strategic actions when taken
can lead a utility to empower its customers and thus enhance its own value
Customer Issues
The concept of customer service is almost non-existent in most distribution
companies. In fact, there is a lack of a formal organization construct, unlike say
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the telecom industry, to address customer needs. This means that customers need
to interact with multiple entities for any service request. The result is that
customers frequently face long delays in resolving technical and commercial
complaints, encounter uncooperative attitude of staff and need to make unofficial
payments to resolve their issues.
Major issues by which a customer is not satisfied with the service of utility are:
Poor availability and quality of power
Multiple contact points
Tedious processes and bribery
Limited payment modes
Poor customer service
A survey was done amongst domestic consumers to reveal the level of
satisfaction they have from the distribution utility processes, procedures and
service standards
which revealed the following facts:
There is no provision to regularly monitor whether the time limits are
adhered to or not in case of non conformance to standards.
Reporting mechanisms are not strictly followed
Analysis of the survey's results clearly reflected the dissatisfaction, and
wide gap between expectations and services delivered.
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To the consumer the two most important aspects that emerged were
grievance handling and metering and billing.
Based on the above observations, following recommendations were made
Frequent interaction with the consumer forums must be done by the
distribution utility to yield areas of customer dissatisfaction and to act
upon such issues so as to increase overall effectiveness of the utility.
Distribution utilities in the state must arrange wider publicity to
Complaint Handling Procedure, drawing the attention of the consumers.
Procedures to be adopted for the complaints regarding interruption or
failure of power supply, voltage complaints, load shedding, scheduled
outages, problems in metering and billing, disconnection and reconnection
of power supply, delay in providing new connections must be provided by
the utility through any means like print advertising, direct mail, sales
literature, public relations, utilities website, etc.
All the distribution utilities must define Customer Service Standards
consisting of:
Overall Standards, i.e. the ability to restore supply after a failure of the
distribution system, management of voltage complaints, actual meter
reading, billing and response to customers petitions; and
Guaranteed Standards, involving the supply quality, time to connect
new customers, time to respond to customers requests and compliance
to the service conditions, and reconnection of supply in case of having
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been disconnected. For the guaranteed standards, penalization in terms
of fine can be established. The utilities will have to compensate
affected customers in case the guaranteed standards cannot be met.
There is a need to streamline the grievance redressal procedure, as a
consumer usually has to approach to various levels within a utility. Thus,
the process of grievance redressal is time consuming and cumbersome
Updation of customer information system with databases of customers,
regular updates of mapping system so that all of the customer's account
information is available when a customer calls in to 24-hour call center.
Another area which needs improvement is metering systems. Automated
meter reading system or AMR must be introduced in phases. This system
will automatically read meters so the utilities don't have to send their
employees into the customers' homes and backyards. Automated meter
reading will improve the quality of meter reading, help the utilities gain
operational efficiencies, and provide customers with timely energy
information.
Work management system of the utility must be made effective. This
system helps manage work at a company level. It gives a high-level view
of workload and helps offices communicate effectively to ensure that the
utility meets the customers' needs.
Customer Relationship management systems must be designed in such a
way that employees get information about customers' accounts when they
are out in the field meeting with customers.
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A step further in customer services area can be achieved by the utility by
centralizing a number of their field functions. This doesnt mean closing
field offices, but rather shifting the emphasis from addressing walk-in
customers' needs to more of an operationally focused field office.
Bill payment systems can be extended to forms like on-line payments,
payments directly from customers' bank accounts, or payment at pay
stations, etc.
Creation of an on-line access for the larger customers to provide them with
energy information tailored to their business environment can also be a
way to enhance customer service.
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INDEX
1. Introduction 1
1.1 Objective 5
1.2 Significance of the Problem 6
1.3 Review of the Literature 8
1.4 Conceptualization 13
1.5 Operationalisation of the Concept 14
1.6 Focus of the study 20
1.7 Limitations 21
2. Research Methodology
2.1 Research Design 22
2.2 Universe and Survey Population 23
2.3 Sample Size and Technique 24
2.4 Data Collection 25
2.5 Data Analysis 27
3. Strategic Interventions for Distribution Utility 28
4. Statistical Analysis 48
5. Summary 56
6. Recommendations 57
7. Conclusion 60
Annexure-I
Annexure- II
Bibliography
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1. INTRODUCTION
The distribution system in India is often characterised by inefficiency, low
productivity, frequent interruption in supply and poor voltage. Evidently, some
fundamental changes are imperative in the working of the power sector entities to
realise the vision of reliable, affordable and quality power for all by 2012. The
reform process is in progress in several states under the overall guidance of MoP.
It is aimed at bringing about sustainable improvements in the operations of the
utilities and making them viable businesses. The reforms have brought about
various improvements in operational structure, commercial
orientation, transparency in operation and overall customer orientation in several
states. However, there has been limited success in institutionalising these changes
and sustaining these improvements over a period of time. Therefore, the need of
the hour is to institutionalise the changes and bring about sustainable, pervasive
improvements.
WHO IS A CUSTOMER ?
A customer is the most important visitor in our premises.
He is not dependent on us. We are dependent on him.
He is not an interruption on our work. He is the purpose of it.
He is not an outsider on our business. He is part of it.
We are not doing him a favour by serving him. He is doing us a favour by giving
us an opportunity to do so.
-Mahatma Gandhi
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Most people in business serve three kinds of customers
Final customers- People who will use your product or service in daily life
and, you hope, will be delighted. Theyre also known as end users.
Intermediate customers- These are often distributors or
dealers who make your products and services available to the final
customer.
Internal customers- People within your organization who take your work
after youve finished with it and carry out the next function on the way
toward serving the intermediate and final customers.
CUSTOMER DRIVEN ENTERPRISE
A customer driven enterprise constantly challenges itself to answer four questions:
1. What are our customers needs and expectations, and which of these needs
and expectations matter most to them?
2. How well are we meeting those needs and expectations?
3. How well are our competitors meeting them?
4. How can we go beyond the minimum that will satisfy our customers, to
truly delight them?
Ways to become a customer driven organisation
Ask the customers how well you are currently serving them?
Give them a chance to tell you
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what they want,
where youre failing,
where youre succeeding
The companies that do so consistently and act upon their findings reap massive
benefits.
Because quality of service is hard to quantify, companies often fail to learn their
customers opinions about it. But a good guide is a structure described in five
dimensions which can be summarized with the acronym RATER:
Reliability: the ability to provide what was promised, dependably and accurately
Assurance: the knowledge and courtesy of employees, and their ability to convey
trust and confidence
Tangibles: the physical facilities and equipment, and the appearance of personnel
Empathy: the degree of caring and individual attention provided to customers
Responsiveness: the willingness to help customers and provide prompt service
Customer driven organization means moving
FROM TO
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motivation through fear and loyalty motivation through shared vision
an attitude that says its their problem ownership of every problem that affectsthe customer
the way weve always done it continuous improvement
making decisions based on assumptions
and judgment calls
doing it with data and fact-based
decisions
everything begins and ends with
management
everything begins and ends with
customers
functional stovepipes where departmentbase decisions solely on their own criteriacross-functional cooperation
being good at crisis management and
recovery
doing it right the first time
depending on heroics driving variability out of the process
a choice between participative or
scientific management
participative and scientific management
Building a customer-driven organization involves focusing on some key
dimensions like:
Information
Technology
End-to-end processes
Behaviour
Resources
Orgnanisation structure
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1.1 OBJECTIVE
Since the passage of Electricity Act 2003, developments in the power sector have
gained momentum. The most important and the irreversible change is the shift
from the monopoly business to the competition, with the utilities gearing up to
transform through internal reforms and restructuring. In this new environment,
only the customer orientation and service quality offered by the utility would
decide the eventual winner, i.e. the future of a successful electricity business
would be based on ownership of customer rather than ownership of assets.
This project aims to bring forth customer service strategies to be undertaken by
the distribution utilities (put forward as a result of survey conducted amongst
domestic customers) so as to evolve successfully into a business where customer
is the sole arbitrator of performance.
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1.2 SIGNIFICANCE
Customers in a distribution utility are faced with problems of quality and
reliability of service, power outages, billing and collection inefficiencies,
improper remittance handling measures, etc. There is an inherent gap in the
customer expectations of the service and the service actually delivered to him (as
depicted by the figure on next page). To bridge this gap, utilities need to focus on
various areas leading to customer satisfaction because it is the customer base, and
the customer service and retention measures of the utility which will be of prime
importance in near future of competitive electricity markets and these will help
decide the utilitys future performance.
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Principal Disparities Affecting Service Quality
Consumer
expectationsConsumer Perceptions
of Service Delivery
Service quality level
experienced by consumers
Consumer Expectations
Management Perceptions
of Consumer
Expectations
Intended Level of
Service Quality
Intended Level of
Service Quality
Management Perceptions
of Consumer Expectation
What is communicated
about the service to
consumers
Service quality level
experienced by consumers
GAP
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1.3 REVIEW OF THE LITERATURE
Excerpts from the Electricity Act, 2003
The Act specifies certain obligations for the distribution licensee or the utility
towards customers
Duties of distribution licensee
42. (5) Every distribution licensee shall, within six months from the appointed
date or date of grant of licence, whichever is earlier, establish a forum
for redressal of grievances of the consumers in accordance with the
guidelines as may be specified by the State Commission.
(6) Any consumer, who is aggrieved by non-redressal of his grievances
under sub-section (5), may make a representation for the redressal of his
grievance to an authority to be known as Ombudsman to be appointed or
designated by the State Commission.
(7) The Ombudsman shall settle the grievance of the consumer within such
time and in such manner as may be specified by the State Commission.
Duty to supply on request
43. (1) Every distribution licensee, shall, on an application by the owner
or occupier of any premises, give supply of electricity to such premises,
within one month after receipt of the application requiring such supply
Provided that where such supply requires extension of distribution
mains, or commissioning of new sub-stations, the distribution licensee
shall supply the electricity to such premises immediately after such
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extension or commissioning or within such period as may be specified
by the Appropriate Commission.
(3) If a distribution licensee fails to supply the electricity within the
period specified in sub-section (1), he shall be liable to a penalty which
may extend to one thousand rupees for each day of default.
The Electricity Supply Code
50. The State Commission shall specify an Electricity Supply Code to
provide for recovery of electricity charges, intervals for billing of
electricity charges disconnection of supply of electricity for non-
payment thereof; restoration of supply of electricity; tampering, distress
or damage to electrical plant, electric linesor meter, entry of distribution
licensee or any person acting on his behalf for disconnecting supply and
removing the meter; entry for replacing, altering or maintaining electric
lines or electrical plant or meter.
Consumer protection: Standards of performance
57. (1) The Appropriate Commission may, after consultation with the
licensees and persons likely to be affected, specify standards of
performance of a licensee or a class of licensees.
(2) If a licensee fails to meet the standards specified under subsection
(1), without prejudice to any penalty which may be imposed or
prosecution be initiated, he shall be liable to pay such compensation to
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the person affected as may be determined by the Appropriate
Commission
Provided that before determination of compensation, the concerned
licensee shall be given a reasonable opportunity of being heard.
(3) The compensation determined under sub-section (2) shall be paid
by the concerned licensee within ninety days of such determination.
Different Standards of performance by licensee
58. The Appropriate Commission may specify different standards under
subsection (1) of section 57 for a class or classes of licensee.
Information with respect to levels of performance
59. (1) Every licensee shall, within the period specified by the
Appropriate Commission, furnish to the Commission the following
information, namely:-
(a) the level of performance achieved under sub-section (1) of the
section 57;
(b) the number of cases in which compensation was made under sub-
section (2) of section 57 and the aggregate amount of the
compensation.
(2) The Appropriate Commission shall at least once in every year arrange
for the publication, in such form and manner as it considers appropriate,
of such of the information furnished to it under sub-section (1).
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Quality of service: role of regulators
The ERC (Electricity Regulatory Commission) Act 1998 enjoins upon the
central electricity regulator to seek advice from the central advisory
committee on "matters relating to quality, continuity, and extent of service
provided by the licensee;.energy supply and overall standards of
performance by utilities".
The OER (Orissa Electricity Reform) Act 1995 mandates the regulator to
"regulate the purchase, distribution, supply and utilization of electricity,
the quality of service,.". Similar provision exists in the Acts setting up
regulatory authorities in Karnataka, Gujarat, UP, and AP.
Some regulators have also taken certain initiatives to address issues of quality for
improvement of customer service. In Orissa, the electricity regulator through its
Distribution (conditions of supply) Code 1998, has set the service standards
required to be provided to consumers by a distribution utility. These standards are
backed up by provisions for imposition of penalties for violations, and penalties
prescribed are very high. There are also procedures for grievance redressal by the
utility and by OERC (Electricity Regulatory Commission). Similarly, overall
performance standards have also been set for distribution and retail supply: for
example, distribution companies have to bring down voltage variations within
declared limits within fifteen working days of complaint in 60 percent of cases.
Standards of service in Orissa
Sl.No. Type of service Time limit for rendering the service
1. Low voltage 15 days in case of local problems and 6 months
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requiring augmentation of distribution system
2. Restoration following
interruption/failure of powersupply
24 hrs. in all cases except in case of major
failures involving transformers and 11 KVfeeders including its terminal equipments, where
it shall not exceed a maximum of 7 days
3. Duration of load shedding or
scheduled shutdown exceeding 12
hrs./day or continuing for more
than 6 consecutive days
Prevent such recurrence within 72 hrs. of
complaint
4. Metering problems
a) Meter supplied by Licensee
Defect rectified within 30 days and if meter
needs replacement the said replacement has to be
made within 30 working days from the date of
removal of the meter
b) Meter supplied by Consumer Engineer required to advise the consumer
suitably for testing/repair/replacement within 7
working days of noticing the defect
Meter testing, if so desired by the consumer in
Licences testing laboratory, is to be done within
15 days of deposit of fees by the consumer
Engineer will install correct meter within 14
days of handing over of the said meter by the
consumer
5. Billing errors 60 days
6. Disconnection and reconnection
of power supply
30 days
Though we see quality of service provided by the distribution utility is laid
prime importance by the government and the regulators, and many states have
taken initiatives in this direction also, yet there is scope for improvement.
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1.4 CONCEPTUALISATION
Utilities, for the most part, are still monopolies, albeit regulated. Distribution
utilities have a 'captured' base of customers or consumers. Today customer care is
a primary focus of most utilities. All utilities are looking for ways to touch their
customers. Various kinds of customer satisfaction surveys are being conducted by
the utilities to find the overall satisfaction of the customers from the utilities
services.
But, we must realize that the 80-20 rule applies here too. Eighty percent of the
efforts in the customer care/customer service area are for 20 percent of the
customers. And, this may even be stretching it. Utilities and municipalities who
have attempted to measure these activities report that it may be fewer than 20
percent of our customers who generate over 80 percent of our customer care work.
It is important that utilities continue to provide excellent customer service to rest
80 percent group because, if they do become unhappy, even if they cannot
necessarily leave the utility and select another service provider, they can easily
join and ultimately increase the size of that 20 percent group, resulting in either a
lower level of customer service to this group, or increasing the utilities costs of
serving them. Either way it is something the utility does not want.
Another very important, and many times missed aspect, is to consider the other
group of customers who are the utilities internal customers. A utility has to
integrate its functions to work efficiently as a tool for the customer service
organization and back-office organizations like billing, collections, cashiering, etc.
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1.5 OPERATIONALISATION OF THE CONCEPT
OWNERSHIP OF CUSTOMERS
The electricity business is evolving from a monopoly to a competitive market and
the utilities are gearing up to face the challenge through internal reforms and
restructuring. Though this is certainly a step in the right direction, in this new
environment, only the customer orientation and service quality offered by the
utility would decide the eventual winner. The future mantra of a successful
electricity business would be the ownership of customer rather than ownership
of assets.
New order in distribution
Developments in the power sector have gathered momentum since the passage of
Electricity Act, 2003. Some major shifts in the external environment of the
distribution companies have already manifested, the most important change being
the irreversible move from being a monopoly business to a competitive market.
The Electricity Act has already created an enabling environment for competition
in bulk and retail power markets. Retail competition can now take many forms- a
parallel licensee with his own distribution infrastructure, or a consumer/ retailer
leveraging existing distribution assets under the open access provisions, or a
consumer setting up a captive power station without accessing a distribution
network at all. In each case, the customer will be able to choose his power
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supplier rather than being compelled to buy power from the distribution licensee
in his area.
The inevitability of competition is now evident from the fact that various state
electricity regulatory commissions (SERCs) have already issued draft guidelines
for distribution-level open access. What this means for the incumbent utilities is
the emergence of a new order where the customer will be the sole arbitrator of
performance.
Emerging business value drivers
With the changing environment, the processes in the retail selling side of
electricity distribution companies would undergo a major transformation. The
business model itself would change from being an asset- and engineering-
intensive business to a customer oriented and commercially driven business.
Though this may be new to the electricity distribution business- monopolies have
always experienced shifts in their value drivers when their industry has opened up
to competition. Monopolies derive value from their asset base- in the case of
distribution companies, this would mean infrastructure such as substations, lines,
geographic reach etc. However, competitive businesses derive value from their
ability to attract and retain customers. It is therefore not difficult to see that the
transformations required in the business are so far-reaching that they would affect
the core of the distribution business.
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Many reforming SEBs (and their newly created avatars- the unbundled
distribution companies) have started recognizing this change and a few have also
taken the first steps towards creating organizations that are customer friendly.
Customer life-cycle management process
In order to achieve tangible improvements in customer service, it is essential to
identify the typical steps that each customer will go through, which can be termed
as the customers life cycle with the organization. In electricity distribution
customer relationships are not time bound and hence, should not be seen with a
transactional approach but with a process approach.
The typical process starts with a new customer seeking service, wither by seeking
a new connection or by transfer of an existing connection to a new person.
The next step is service provision, which encompasses the basic service of
providing reliable and quality power at affordable tariffs to meet the demand.
Along with this, utilities could also provide various ancillary services such as fault
repairs, changes in connected load, connection shifting, name changes etc. as well
as value-added services such as assistance in cost reduction by demand-side
management, energy audit services etc.
The next part of the life cycle covers the charges for services provided and
collection of dues. This is often the most critical area identified for reform, with
the maximum potential for causing customer dissatisfaction. It has been observed
that a lacuna in billing and collection processes results in the swift exit of
customers.
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Process reorientation towards customer satisfaction- the real challenge
The best way to start improving customer processes is to identify the key touch-
points with customers. These are the key interfaces with the customers, such as a
customer coming to obtain a new connection, sending bills to customers, receiving
customer complaints, receiving payments from customers, etc. Improvements in
touch-points should be the first items on the agenda and each one should be
reviewed to make them simple, efficient and customer friendly. Often, in this
process, utilities will fine-tune processes and get the additional benefit of saving
their own time and costs.
Simplified entry procedures
The entry process for new customers assures prime importance in a competitive
environment, as customers tend to give a lot of weightage to the ease with which
they can subscribe to the services. Towards this goal, utilities need to make it easy
and convenient for customers to apply for new connections. In addition, the
company should also carry out advance planning of networks for reducing service
commencement time.
Framework to improve customer touch-points- use of informationtechnology
The companies would need to reorient the nature of management information
systems, and consequently, the use of information technology (IT) to improve
customer connectivity. An essential element in the customer-oriented approach is
the deployment of various IT systems to provide data to customers in a friendly
manner. It is important to provide facilities such as electronic presentation and
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payment of bills, billing and payment history, online resolution of simple bill
disputes such as arithmetical errors, online fault booking, etc.
Value addition by providing ancillary services
Offering ancillary services would leverage the technical expertise of the utility ina
manner that would bring advantage to both the utility and the customer. For
instance, by proper demand-side management it may be possible for the utilities to
flatten its load curve and would lead to savings by the customer. Providing
subsidized categories of customers with upgrades to more energy efficient
technologies to control their drawals is another example of such a win-win
situation.
Customer retention- innovative efforts
Many utilities have started the process of building on various customer-friendly
measures with the objective to retain valuable customers by offering them
maximum convenience.
A number of utilities have created call centers to create a central point to receive
customer complaints. A few have even centralized all customer interaction by
creating kiosks that handles all the activities, such as obtaining new connections,
excess billing complaints, etc. Some have started providing bills to customers in
the language of their choice, which also provide a basic idea of consumption
based on hours of usage of typical household gadgets.
Andhra Pradesh has introduced a bill presentation and payment system called e-
seva. This acts as a concentration point providing citizens access to bills and
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forms from various government departments, including the distribution
companies. The infrastructure created for this purpose allows for online payment
of electricity bills in addition to payment at any one of the e-seva kiosks, member
bank ATMs, drop boxes etc. The increased convenience in bill payment leads to
lower default rates.
The Gold Card scheme that was in practice in Karnataka is also a good example
of a customer outreach initiative. The scheme was designed to provide its large
customers with express privileges. Clear and transparent eligibility criteria were
developed considering past payment, annual consumption etc. Efforts were made
to provide quality services to these gold customers and ensure that they are
retained through a continuous feedback mechanism to identify and redress their
problems on a priority basis. Though the scheme is not in operation today, it was
quite popular and demonstrated an effective way of reaching out to the most
critical customers and ensuring their satisfaction.
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1.5 FOCUS OF THE STUDY
A monopolistic environment causes organizations to lose their customer focus.
However, the monopolies in the electricity distribution business have realized that
their sector is on the cusp of a competitive era where empowered customers will
be calling the shots. And like many other sectors, the winner in the new era will be
the entity that owns the maximum number of customers and not necessarily the
assets.
The main objective of this project is to obtain an overview of the customer focus
strategies of the distribution utility and to analyze the areas for improvement. This
is because for a utility, customer is regarded as a king.
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1.6 LIMITATIONS
The conceptualization of a competitive era in which customer is the main focus of
the utility will actually take some time to evolve in Indian distribution sector,
though to some extent, it is underway.
This report does not analyze the companys perspective, i.e. means to stop power
thefts, AT&C loss reduction etc. which are the main reasons for poor quality of
service to customers.
Time constraint and sample size can be considered other limitations of this
project. However a fairly good sample has been analyzed within prescribed time
limits.
The cost perspective for improving customer service strategies both at utilities and
the consumers end have not been analyzed in great details.
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2. RESEARCH METHODOLOGY
2.1 RESEARCH DESIGN
The research design is the conceptual structure within which research is
conducted; it constitutes the blue print for the collection, measurement and
analysis of data. As such the design includes an outline of what the researcher will
do from writing the hypothesis and its operational implications to the final
analysis of data. This research deals with the customer service strategies to evolve
successfully in this competitive era.
The basic purpose of the research is to see the customer services strategies in the
current scenario and suggest areas of intervention (from the consumers
perspective) for the same to improve the current shape.
This is an analytical kind of research study. Analytical research studies are those
studies, which are concerned with analyzing the characteristics of a particular
individual, or of a group after discussion with the individual/group. Here I have
obtained the primary data from the respondents in the form of a questionnaire and
then analyzed and interpreted the same as per my perceptions to reveal the status
of customer satisfaction in a distribution utility.
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2.2 UNIVERSE AND SURVEY POPULATION
All items in any field of inquiry constitute a universe or population. A
complete enumeration of all the items in the population is known as a census
inquiry. It can be presumed that in such an inquiry, when all items are covered, no
element of chance is left and the highest accuracy is obtained. But in practice this
may not be true.
The universe in this case includes all the customers
External customers or end-users: domestic, industrial, commercial,
temporary
Internal customers
Due to limited time it was difficult to cover the entire universe. In this research
only the analysis for the external customers has been done, that too under the
category of domestic.
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2.3 SAMPLE SIZE AND TECHNIQUE
As stated above, due to the considerations of time and cost almost invariably lead
to a selection of respondents i.e., selection of only a few items. The respondents
selected should be as representative of the total population as possible in order to
produce a miniature cross-section. The selected respondents constitute what is
typically called a sample and the selection process is called sampling
technique. The survey so conducted is known as sample survey.
For the study, we use area-sampling technique. In area sampling the total
population is divided into a number of relatively small subdivisions which are
themselves clusters of still smaller units and then some of these clusters are
geographically selected for inclusion in the overall sample. In other words, cluster
designs, where the primary sampling unit represents a cluster of units based on
geographic area, are distinguished as area sampling.
Sample size: I have collected in total 25 samples.
Technique: Random Sampling
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2.4 DATA COLLECTION
The task of data collection begins after a research problem has been defined and
research design/plan chalked out. Data can be categorized into two types of data
viz., primary and secondary.
Primary data are those, which are collected afresh and for the first time, and thus
happen to be original in character. Common ways of collection of such data,
depending on the need of the research are:
Consumer / Customer Telephone Interviews
Executive Telephone Interviews
Focus Groups In-depth One-on-One Interviews
Intercepts
Mail Surveys
Mini Groups
Panel Research
Email Surveys
Internet Research
Usability Tests
Secondary data are those which have already been collected by someone else and
which have already been passed through the statistical process. The researcher
would have to decide which sort of data he would be using (thus collecting) for
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his study and accordingly he will have to select one or the other method of data
collection.
COLLECTION OF PRIMARY DATA
We collect primary data during the course of doing experiments in an
experimental research but in case we do research of the descriptive type as is our
case, then we can obtain primary data either through observation or through direct
communication with respondents in one form or another or through personal
interviews (unstructured). For this project report, data was collected through
questionnaires and interviews.
The questionnaire and the name of persons with their age groups and profile have
been attached asAnnexure-I & II.
COLLECTION OF SECONDARY DATA
When the researcher utilizes secondary data, then he has to look into various
sources from where he can obtain them. In this case secondary data from the
documents and survey reports has been utilized.
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2.5 DATA ANALYSIS
The data, after collection, has to be processed and analyzed in accordance with the
outline laid down for the purpose at the time of developing the research plan. This
is essential for a scientific study and for ensuring that we have all relevant data for
making contemplated comparisons and analysis.
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3. STRATEGIC INTERVENTIONS FOR A CUSTOMER
DRIVEN DISTRIBUTION UTILITY
The utility industry has been on a roller coaster ride for much of the past few
years. Caught in the midst of aging infrastructure, higher than ever demand, and
the need to cut costs, increase operational efficiency, and return value and
dividends; the utility enterprise must continue to focus on delivering the highest
quality of service and care to its customers.
The utility customer service imperative is simple and straightforward. Utilities
must provide reliable, affordable electric power to customers while also
communicating, billing, and collecting payment from customers in a courteous,
efficient, and proactive manner. Although this customer service imperative is
simply stated, in the world of utility operations this easy to state mission entails
complex business processes and creates multiple challenges for utility
management, staff, and information technology (IT) systems.
For many years, distribution utilities have been devising new information
technology strategies and spending millions on computer systems, software, and
business design to streamline operations, drive down internal costs, and create
new revenue opportunities. While there are many success stories and many more
lessons learned from across the industry, the majority of utilities are still not fully
customer service focused organizations despite their best efforts to improve
customer service, many utilities still see it as a business function rather than a core
business process. Truth be told, the distribution utilities still needs to understand
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that customer information and customer care are among the most important
functions of the utility enterprise and that customer information systems (CIS) and
customer care (often called Customer Relationship Management or CRM) really
do have bearing on every aspect of utility operations and utility planning and
decision making.
Over the past decade, utilities have invested substantial resources in CIS, CRM,
and other customer care systems and architecture. However, the distribution
utilities are only now beginning to realize that effective and efficient customer
service rests not only on hardware but on selection and deployment of customer
care applications (software) and customer service optimized business processes.
This same hardware- or systems-centric mode of investment has created an
environment in which many utilities possess a critical mass of customer care
technology, yet they are not realizing the level of cost savings, efficiency, or
customer satisfaction expected after making investments in CIS and customer care
infrastructure. This has led some utilities to the erroneous conclusion that
customer information and customer care systems are not worth the large
investment, and therefore, should not remain a high priority in the enterprise. On
the contrary, all indications are that customer service and customer care must be
the top priority in the utility enterprise.
Common Areas of Investigation for Utility Organizations:
1. Customer Satisfaction Analysis
2. Awareness and Satisfaction Toward Services Offered
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3. Perceptions Towards Core Services
4. Perceptions Toward Conservation Issues
5. Perceptions Toward the Utility
6. Commercial Customer Perceptions and Issues
7. Consumer Customer Demographic Analysis
8. Communications / Advertising Issues
9. Community Involvement Issues
10. Pricing / Billing Issues
11. Budget Billing
12. Power Outage Issues (Electrical Utilities)
CUSTOMER ISSUES
The concept of customer service is almost non-existent in most distribution
companies. In fact, there is a lack of a formal organization construct, unlike say
the telecom industry, to address customer needs. This means that customers need
to interact with multiple entities for any service request. The result is that
customers frequently face long delays in resolving technical and commercial
complaints, encounter uncooperative attitude of staff and need to make unofficial
payments to resolve their issues.
Major issues by which a customer is not satisfied with the service of utility are:
Poor availability and quality of power
Multiple contact points
Tedious processes and bribery
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Limited payment modes
Poor customer service
Challenges before a utility to improve their performance and enhance customer
satisfaction are in the following areas
Information
Technology
End-to-end processes
Behaviour
Resources
Orgnanisation structure
WHAT DOES THE CUSTOMER WANT?
The key needs of the customer are depicted in the figure below. These need to be
the focus of the IT applications.
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The focus of IT applications for customer benefit
The service levels to customers in the areas mentioned in the above figure could
be improved by monitoring the following parameters:
Quality and reliability of supply
Scheduled and unscheduled outages
Communication from SEBs on possible outages and outage time
Accuracy of bills
Inaccurate meter reading or no meter reading
Meter reading taken but not reported
No posting of collection
Changed meter status
Wrong calculation
Payment mechanisms
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Bill not delivered in time to make payment
Waiting time for bill payment
Preferred vs. available mode of payments
Complaint handling
Demand vs. provision of new connections
Responsiveness to bill queries
Preferred vs. available facilities to log complaints
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3.1 ROLE OF INFORMATION/COMMUNICATION IN CUSTOMER
SERVICE
It is important to make the contact that customers have with their utility company
- previously more of a bureaucratic nature - as attractive and as simple as possible.
The basis for this contact consists of efficient front-office functions in the utility
company's customer information system, which provides the customer with a one-
stop service facility and enable the utility company to apply the "one-face-to-the-
customer" principle. Call center solutions can further increase the efficiency this
brings.
The ultimate in customer focus can be achieved if customers are also able to use
their private Internet connection to accomplish service transactions and make
requests quickly and effortlessly, at the same time having access to useful
information about other services provided by their utility company.
Information to the customers from the utility can pass through following means
Dissemination of press releases, articles or special reports
Production of short documentaries on the distribution utilities of the state
to be broadcast on TV and radio programs.
Posters/ Slogans/ Phrases to be hanged/ pasted in the utilities offices
Disseminating the information of planned outage through rickshaws/ jeeps
etc. running in all localities to be affected by the outage.
How information flow in the utility help it in achieving customer service
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Benefits of Information Flow across the Organisation
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3.2 ROLE OF TECHNOLOGY IN CUSTOMER SERVICE
Technology Issues
Most distribution companies despite having to process large volumes of data are
sub-optimally supported by IT systems and automation. Use of electronic meters
and data loggers/ handhelds is rare. Most IT systems are homegrown packages
that lack integration, parameterization and robustness. Hardware and IT security
prevent issues on data integrity.
Benefits of improvement in IT technologies can enhance utilities value also. For
example, the South African power distribution utility has converted a majority of
its low value consumers to prepaid metering. This move has reduced their
administrative costs and also dramatically reduced the collusion between meter
readers and consumers at prepaid locations.
The gap in IT adoption globally and in the Indian power sector is apparent and
glaring and even the rate of overall technology adoption in India is on the lower
side. Globally IT is being used to enable operations at a transaction level thus
providing advantages like in-built process controls, workflow enabled
transactions, single point of data capture and support for timely strategic decision
making. On the other hand, in India, the core operations are still manual and
therefore face issues like adhoc decision making, poor data quality, long decision
making cycles and under utilisation of IT investments. In order to reap the benefits
of IT, the wide gap between India and global best has to be bridged.
How IT can help distribution utility to cater customer services
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Benefits of IT applications to customers
Customer benefitIT applications
The implementation of IT initiatives, though not an easy task, will result in
improvement in reliability and quality of supply, increased productivity, reduced
technical and commercial losses, customer satisfaction and a fundamental change
in the work culture. The computerised system will revolutionise the way that
utilities conduct their business by reducing operating cost, improving customer
service and increasing employee efficiency.
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3.3 PERFORMANCE OF END-TO-END PROCESSES TO ENHANCE
CUSTOMER SATISFACTION
The ultimate in customer focus can be achieved if customers are able to use their
private Internet connection to accomplish business transactions and make requests
quickly and effortlessly, at the same time having access to useful information
about other services provided by their utility company.
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3.4 ENHANCING EFFECTIVENESS OF DISTRIBUTION
COMPANIES THROUGH HRD
Customer care and service must be an inherent part of the value-added chain of
the utility.
Management Issues
These issues become even more complicated and challenging because of the
management style and work culture prevalent in these organisations. There is a
complete lack of accountability and while the technical skill-set available is
adequate, the availability of commercial skills and business acumen is inadequate.
As a result, focus on commercial issues and performance, which is critical to
shoring up the financial parameters is inadequate. Over manning and lack of cost
control also have contributed to creating unsustainable cost structures. Any
attempt to tighten up operations, is severely hampered by the absence of timely,
accurate and reliable management information because of weak data capture and
analysis.
Managing performance effectively to achieve business goals inquires continual
implementation and execution of the following tasks:
(a) developing and maintaining high quality of leadership,
(b) preparing right strategies to implement business plans,
(c) developing feasible and relevant goals and pragmatic action plan to implement
the same,
(d) intensifying performance monitoring, measurement and follow up
(e) basing rewards, penalties, promotions and transfers on performance;
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(f) stimulating the most capable, helping those who have unrealized potential
and terminating the incapable;
(g) conducting active and focused management by managers and of managers.
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3.5 MANAGEMENT OF RESOURCES TO ENHANCE CUSTOMER
SATISFACTION
The business model of distribution company should be viewed from the synergy
created by various perspectives in the distribution companies such as Customer,
Financials, Human Resources and Institutional Processes and Systems.
Today success will depend on the ability of a company to mobilise and exploit its
tangible as well as intangible assets to perform better and live up to the
expectations of the stakeholders. The intangible assets include capability to
provide timely quality power and services, motivated and skilled employees,
distinctive internal capabilities, andsatisfied and happy consumers/ customers.
Intangible resources and assets enable the distribution companies to:
Develop customer relationships that build trust;
Increasingly serve new customer segments;
Introduce innovative and services and options;
Ensure customized high- quality power supply and services at low cost and
with short lead times(i.e. possible to manage high value customer at off
peak hours at low rates);
mobilize employee skills for continuous improvements in process
capabilities, quality, and response times;
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3.6 HOW TO ALIGN ORGANIZATION STRUCTURE TO ENHANCE
CUSTOMER SATISFACTION
Integrating Employee and Customer Perspectives
CustomersServiceCenter
Employees
Product ServiceDevelopment
Employees
Innovative
A leader inthe industry
Reliable
Upholding HighQuality Services
Forwardthinking
Dependable
SalesGroup
Employees
While employees havingdirect contact with
customers see yourcompany as a company
that isreliable/dependable.
..but customersperceive your company
as Innovative andForward thinking
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3.7 QUALITY
Customerexpectations for service quality are rising, not only in regions where
they perceive more choice in the energy marketplace, but also because
experiences with service providers outside the energy industry are setting new
standards for performance. Infact, service that's not up to customer expectations
can have a quick and negative impact on a utility's bottom line.
Managing service quality cost-effectively raises difficult questions:
How do physical measures of service reliability and power quality relate to
customer satisfaction?
What other aspects of service drive satisfaction?
Improvement in quality of service implies
Stable voltage and frequency
Enhanced customer experience
Quality and reliability of supply can be improved with proper system maintenance
and faster action on outage complaints. For this, electric flow in the system should
be monitored on a real-time basis. The real-time information ensures that the
official concerned (distribution point) is aware of any breakdown / disruption at
the same time as the consumer. The customers affected with any outage should be
immediately identified and informed of the outage or a possible outage as well as
the approximate duration. This results in prompter action and better customer
relationship. Following are some of the IT applications, which can help in this:
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SCADA to start with and then progressing to distribution automation
Outage and work management system including trouble call management
system
for faster restoration of outages
GIS (Geographical Information System) for identifying area and
equipments
CIS (Customer Information System) using Internet, phones, call-centres,
etc.
IVR for complaints and call back on restoration of supply
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3.8 STANDARDS OF PERFORMANCE
Customer Perceptions: Achieving strong satisfaction requires understanding
how the customers perceive your companys performance
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3.9 PAYMENT MECHANISMS
Payments are currently made in person in most of the places. Only in few places,
payments can be made online or through the ATM. SEBs should adopt other
payment
mechanisms such as:
Electronic payments, including direct debit payments
Prepaid metering
Bar coding facility even when payment is made in person, for faster
payment
Multiple payment locations and not restricted to a particular division or
subdivision
For providing electronic payments, use of IT would be required for providing
interfaces with entities like banks and building Internet-based payment processing.
At present, SEBs allow only full payment and the system for providing credit
facility (part payment) is quite ad hoc. SEBs could put a system in place for
providing credit and monitor it. SEBs could also provide various payment options
such as budget payment (average payment) and seasonal payment depending on
the customers preference and credit rating. This requires credit analysis of
customers and segregation of good paying customers from bad customers.
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3.10 COMPLAINT HANDLING
At present, consumers find it very difficult to log their complaints. In most cases,
they have to go to the substation for supply related complaints and the concerned
offices for bill related complaints. Contact centres can reduce this kind of trouble
for customers. SEBs/Utilities should have:
Call centres with IVR for outages and bill related complaints
Call back from IVR on restoration of supply or redressal of any bill related
complaint
New connection is a major problem in all the SEBs. There is no suitable system in
most SEBs for availability of information or monitoring of application status.
SEBs must implement a system to enable the customers to know the status of their
applications in a transparent manner. On the process side, regulators could set
standards for SEBs in terms of timelines to provide new connections. All the basic
information for new connections should be easily and publicly available to the
customers either through a website or other communication channels.
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4. STATISTICAL ANALYSIS
1. Frequency and Duration of Outages(a) Is your power supply interrupted
never 0
rarely 7
sometimes 9
frequently 9
never
0%rarely
28%
sometimes
36%
frequently
36% never
rarely
sometimes
frequently
(b) If yes, what is the normal duration of such outage?
few minutes
24%
1 hr.
24%
2-4 hrs.
40%
>5 hrs.
12%
few minutes
1 hr.
2-4 hrs.
>5 hrs.
(c) Are you given prior notices of such outages?
never 3rarely 11
few minutes 61 hr. 6
2-4 hrs. 10
>5 hrs. 3
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sometimes 8
always 3
never
12%
rarely
44%
sometimes
32%
always12%
never
rarely
sometimes
alw ays
Remarks: It was observed that there are frequent power cuts occurring in
the customers premises occurring for generally one hour oreven more.
One major reason cited for this cut was the onset of summer,
but there were respondents who told that such power cuts are
daily occurrences and no prior notice is given of such outages.
Customers have to assume such occurrences based on routine
repetitions. Sometimes, newspapers and radio are used as a
medium to communicate such outages.
2. Do you encounter frequent high or low voltages?
never 6rarely 7
usually 10
always 2
never
24%
rarely
28%
usually
40%
alw ays
8%
never
rarely
usually
always
Remarks: Frequent drop in voltages is a major occurrence in many
customers premises. Due to this many are not able to use their
appliances at night times in summer. But this problem was
majorly observed in areas of SEBs operation.
3. Standardized billing procedure and format
(a) Is the bill formateasy to understand 11
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complex 5
difficult to understand 7
can't say 2
easy to
understand
44%
complex
20%
difficult to
understand
28%
can't say
8%easy to
understand
complex
difficult to
understand
can't say
(b) Is your bill generally
less than expected 3
as per expectations 10
more than expected 10
can't say 2
as per
expectations
40%
more than
expected
40%
can't say
8%less than
expected
12%
less than
expected
as per
expectations
more than
expected
can't say
(c) Do you prefer paying bill through
cash counter 8
drop boxes 6
online/ credit 8
any other means 3
drop boxes
24%
online/ credit
32%
any other
means
12% cash
counter
32%
cash counter
drop boxes
online/ credit
any other means
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(d) What is the average time taken to redress complaints related to meters
and bills?
within few hrs. 4
within 1 day 9
2-3 days 4
>3 days 8
>3 days
32%
2-3 days
16%
w ithin 1 day
36%
w ithin few
hrs.16%
w ithin few hrs.
w ithin 1 day
2-3 days
>3 days
Remarks: This is one area of prime concern for the utility as well as
customers. The bill format was generally understandable,
though some faced difficulty.
The expectations with the bill were met to a less extent.Dissatisfaction was apparent due to the use of the electronic
meters which gave rise to more bill amount than expected by
the customer.
It was clear from the survey that the customers want to opt out
of waiting in queues for bill payment and they want to opt for
other options depending upon the time and the risk involved.
Resolution of metering and billing disputes also raised concern
in minds of customers towards the utility because such
incidents consumed much of their working hours and so many
people opted for not complaining if the difference is not too
large.
4. Notices to consumers of their rights to seek relief at the commission
At what intervals does your utility issue notices for your information to
seek help of NGO, Govt., or Commission
once a month 5
six monthly 3
once in a year 5
never 12
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once a
month
20%
six monthly
12%
once in a
year
20%
never
48%
once a month
six monthly
once in a year
never
Remarks: The notices never get noticed to the consumers. Hardly are thecustomers made aware of where they can seek relief in case the utility
defaults.
5. Has your utility asked you to undertake various energy efficiency
programs?
always 11
usually 9
never 3
can't say 2
can't say
8%never
12%
usually
36%
alw ays
44%
alw ays
usually
never
can't say
Remarks: The energy efficient slogans and phrases find their place in
consumers bills and utilities offices. Some customers opt out
of choice using energy efficient lamps but many are forced to
use them because of problem of drop in voltage.
6.
7. Delays in establishing new service connections
(a) Do you observe delays in establishing new service connections?
yes 20
no 5
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yes
80%
no
20%
yes
no
(b) If yes, how many days delay was there?
1 week 4
2-4 weeks 11>1 month 6
2-6 months 4
1 w eek
16%
2-4 weeks
44%
>1 month
24%
2-6 months
16%
1 week
2-4 w eeks
>1 month
2-6 months
Remarks: Service connection delays are very common for customers, the
period ranging from 1 week to 1 month
8. What is your utilitys repair/ safety response times?
1hr. 8
2-6 hrs. 81 day 6
>1 day 3
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1hr.
32%
1 day
24%
>1 day
12%
2-6 hrs.
32%
1hr.
2-6 hrs.
1 day
>1 day
Remarks: Generally repair work is completed at the optimum time
depending on the situation and the intensity of the repair.
9. At what intervals your utility conducts specific maintenance programs
(of meters, service poles, service transformers)?
every month 5
2-3 months 6
breakdown occurs 14
every month
20%
2-3 months
24%
breakdow n
occurs
56%
every month
2-3 months
breakdown occurs
Remarks: The maintenance programs are generally undertaken once
breakdown occurs. No regular update of service connections
provisions are maintained at customers premises. Many a times, the
meter checker observes the meter related problems at manylocations but with outsourcing of such activities being done now,
we can assume the technical capability of such a person to look for
such disruptions.
10. Business office performance
(a) Are the employees in the customer care center helpful and
friendly?
always 7
usually 13
rarely 3
never 2
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alw ays28%
rarely12%
never
8%
usually
52%
alw ays
usually
rarely
never
(b) Are your calls in the customer care centers answered promptly, ie.
what is the average hold time?
30 sec 6
1-5 min. 13
>5min 4
>10 min 2
30 sec
24%>5min
16%
>10 min
8%
1-5 min.
52%
30 sec1-5 min.
>5min
>10 min
Remarks: This is one area where the utility is functioning well. The
customer care centers personnel co-operate with the employee
problems and try solving them but better integration of such
personnel with customer databases and records is required to
reduce the hold time.
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5. SUMMARY
There is no provision to regularly monitor whether the time limits are
adhered to or not in case of non conformance to standards.
Reporting mechanisms are not strictly followed
Analysis of the survey's results clearly reflected the dissatisfaction, and
wide gap between expectations and services delivered.
To the consumer the two most important aspects that emerged were
grievance handling and metering and billing.
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6. RECOMMENDATIONS
Frequent interaction with the consumer forums must be done by the
distribution utility to yield areas of customer dissatisfaction and to act
upon such issues so as to increase overall effectiveness of the utility.
Distribution utilities in the state must arrange wider publicity to
Complaint Handling Procedure, drawing the attention of the consumers.
Procedures to be adopted for the complaints regarding interruption or
failure of power supply, voltage complaints, load shedding, scheduled
outages, problems in metering and billing, disconnection and reconnection
of power supply, delay in providing new connections must be provided by
the utility through any means like print advertising, direct mail, sales
literature, public relations, utilities website, etc.
All the distribution utilities must define Customer Service Standards
consisting of:
Overall Standards, i.e. the ability to restore supply after a failure of the
distribution system, management of voltage complaints, actual meter
reading, billing and response to customers petitions; and
Guaranteed Standards, involving the supply quality, time to connect
new customers, time to respond to customers requests and compliance
to the service conditions, and reconnection of supply in case of having
been disconnected. For the guaranteed standards, penalization in terms
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of fine can be established. The utilities will have to compensate
affected customers in case the guaranteed standards cannot be met.
There is a need to streamline the grievance redressal procedure, as a
consumer usually has to approach to various levels within a utility. Thus,
the process of grievance redressal is time consuming and cumbersome
Updation of customer information system with databases of customers,
regular updates of mapping system so that all of the customer's account
information is available when a customer calls in to 24-hour call center.
Another area which needs improvement is metering systems. Automated
meter reading system or AMR must be introduced in phases. This system
will automatically read meters so the utilities don't have to send their
employees into the customers' homes and backyards. Automated meter
reading will improve the quality of meter reading, help the utilities gain
operational efficiencies, and provide customers with timely energy
information.
Work management system of the utility must be made effective. This
system helps manage work at a company level. It gives a high-level view
of workload and helps offices communicate effectively to ensure that the
utility meets the customers' needs.
Customer Relationship management systems must be designed in such a
way that employees get information about customers' accounts when they
are out in the field meeting with customers.
A step further in customer services area can be achieved by the utility by
centralizing a number of their field functions. This doesnt mean closing
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field offices, but rather shifting the emphasis from addressing walk-in
customers' needs to more of an operationally focused field office.
Bill payment systems can be extended to forms like on-line payments,
payments directly from customers' bank accounts, or payment at pay
stations, etc.
Creation of an on-line access for the larger customers to provide them with
energy information tailored to their business environment can also be a
way to enhance customer service.
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CONCLUSION
Every Customer Interaction Counts!
Thus its very important for any distribution utility to maintain service standards
and provide quality service to the customers to sustain in this competitive era.
Finally the single most important thing to remember about any enterprise is that
there are no results inside its walls. The result of a business is a satisfied
customer, inside an enterprise there are only cost centers. Results exist only on
the outside.
-Peter Drucker
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