Using an Outsource Strategy and Smart Bill Design to Improve Customer Satisfaction and Reduce Costs

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Using an Outsource Strategy and Smart Bill Design
to Improve Customer Satisfaction and Reduce Costs

Don Cohen Baltimore Gas Electric
Company October 26, 2006 AGA-EEI Workshop
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Who We Are

• Baltimore Gas Electric Company
• Americas first Gas Company founded in 1816
• A Constellation Energy Company
• Electric customers - 1,100,000
• Gas customers - 600,000
• Service 2,300 square miles encompassing Baltimore
  City and all or part of 10 Central Maryland
  Counties
• All businesses in State of Maryland
• Issue 1.3 million bills per month
• Territory is totally deregulated
• CIS SystemCustomer 1
• Energy Planning Network Award Winner 2005

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Who We Are

• Constellation Energy
• A Fortune 200 Company
• Nations leading competitive supplier of
  electricity to large commercial customers
• One of the nations largest wholesale power
  sellers
• Energy supplier to 72 of Fortune 100
• Edison Medal Winner 2005
• Fortune Blue Ribbon Company 2005
• Fortune Global 500 Company 2005
• Fortune Magazines Most Admired Energy Company
  for 2005
• Platts Insight Energy Company of the Year 2004
• Platts 250 Global Energy Company
• Ranked 1 Utility by Business Week 2005
• Revenues 17.1 billion in 2005

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Two Key Issues

• Why Outsource Bill Print ?
• Why Redesign the Bill ?
• How do our decisions impact our Customer
  Communications ?

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It all started with a Real Estate Deal
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Key Decision Factors

• Why Outsource
• Building Separation Project
• Obsolete Equipment
• Facilities Issues
• Printing a Core Competency ?

• Why Redesign
• Improve J D Power Ratings
• Create a more User Friendly document
• Reduce Call Center Traffic
• Process improvements
• Take advantage of outsource partners technology
• Reduce costs
• Resolve Platform Issues

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Why Outsource

• Building Separation ProjectBGE sold one wing of
  its corporate headquarters building. Insertion
  Equipment and Mainframe printers housed there.
• Obsolete EquipmentBoth insertion equipment and
  mainframe printers were purchased in mid 1990s.
• Facilities IssuesRelocate both insertion
  equipment and printers to a new Company location
  at a cost of 950K.
• Printing a Core Competency ?Should we still be
  in the printing business ?
• Two Significant Revelations !!!!!

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Why Redesign

• Improve J D Power RatingsBoost our ratings by
  providing our customer a simplified statement
  .Our bill is a complex document. Customer
  satisfaction is a big driver in the J.D. Power
  Ratings.
• Create a more user friendly documentIncrease
  font size, place important data on the front
  page, highlight the important customer data. We
  see this change as a driver in Customer
  satisfaction.
• Reduce Call Center TrafficA more user friendly
  bill could help reduce calls volumes.
• Process improvementsMove to industry standard of
  payment stub on bottom of bill. Move to duplex
  printing.

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Why Redesign

• Take advantage of outsource partners
  technologyOur outsource partner-
  R.R.Donnelly/Moore Wallace Business
  Communications Systems- is on the cutting edge of
  print technology.
• Reduce costs using duplex printingWe currently
  use simplex printing with a litho form. One half
  of our 1.3 million monthly bills are two page
  documents.
• Resolve Platform IssuesOur mainframe bill print
  software was not conducive to a bill redesign
  that we envisioned. Additionally, our vendor told
  us they will no longer support the version we
  were using.
• Find the Best Product for Us What other bill
  print software options exist ?

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Why Exstream Dialogue

• We maintain composition controlBGE has always
  been in control of bill composition and keeping
  it is a key component of our selection process.
• Flexible price structureOur outsource partner
  (Moore Wallace Business Communications Systems)
  already uses Dialogue. Exstream allowed us to
  purchase only the modules we needed for a test
  version. Moore Wallace already had the production
  engine.
• Ease of useWe reviewed several products and
  found that Dialogue presented the least learning
  curve for our users.
• Use XML for file transfersXML is becoming our
  corporate standard for data transfer. Dialogue
  offered that functionality.
• Outsource partner already familiar with and uses
  Dialogue Moore Wallace is a very large Dialogue
  shop and has technical expertise that we could
  leverage.
• Ability to customize billsWe are able to
  customize bill stubs and messaging without Cobol
  changes.

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Business Process Redesign Strategy

• Review previous customer comments
• Interview key BGE Management who interface with
  Billing Rates
• Hold focus Groups with Call Center personnel
• Create a Corporate cross section Redesign Team
• Secure bill samples from other Utilities
• Create a variety of Bill Prototypes
• Hold focus groups with a cross section of BGE
  customers
• Implement a Design based on input received

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Bill Redesign Project Timeline

• Spring 2003 Outsourcing Project start
• Summer 2003 Research, Internal Surveys, Select
  Redesign Review Team
• Interviews / Internal Focus Groups (Call Center)
• Review bills from other utilities
• Fall 2003 Prototype development
• Developed multiple samples for review /
  consideration
• Winter 2004 External Surveys
• Focus group review with customers (residential,
  commercial, low income, seniors, advocates)
• March 2004 Management Presentation and
  Project approval
• March 2004 Outsourcing completed
• Spring 2004 Development Effort
• Purchase Software (Exstream Dialogue)
• Billing consultant engaged (True Pro)
• Fall 2004 Finalize development
• System test
• Winter 2005 Production implementation March
  18, 2005

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Using an Outsource Strategy and Smart Bill Design
to Improve Customer Satisfaction and Reduce Costs

• Did we meet our goals ?

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The Results are in !!!

• 
  Planned
• Customer Satisfaction
• Improve satisfaction scores on JD Power Survey
• Cost Reduction
• Reduce the number of two page bills to 10.
• 
  Delivered
• Customer Satisfaction
• Ranked 1 in East Region for Commercial
  Customers. 37 points above industry avg.
• Ranked 3 in East Region for residential
  Customers. Up 3 points over 2004
• Well received by Customers and Customer
  Advocates
• Cost Reduction
• Significant reduction in number of two page
  bills, lt 1 are 2 page documents.
• Redesign bill release process to provide
  additional savings

The Proof is in
the printing !!!!!!!!! Two Page Bill Analysis
Total Bills Two Page Percent 1ST Year of
Outsourcing 14,731,948 5,377,861
37 1St Year after Redesign 14,886,357
27,569 .1
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Old Bill Form
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Old Bill Form Reverse Side
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New Bill Form
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Other Applications

• Customer Letters
• Collection Notices

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Our Keys to Success

• Listened to our Customers
• Picked Excellent Partners
• Moore Wallace BCS
• Exstream Software
• TruePro Consulting

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Don CohenBaltimore Gas Electric
Companydonald.cohen_at_bge.com

• Questions / Comments