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

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1 Energy and Utility Insights Realizing Hidden Value: Optimizing Utility Field Service Performance by Measuring the Right Things Utilities

2 Realizing Hidden Value About the Author Rob Milstead serves as the North American lead for Sapient s Energy and Utilities Practice. In this capacity, he manages strategy and business development 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 implementations, 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 challenges 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)

3 Report Highlights Field service workforces offer a tremendous opportunity 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 analysis. 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 implement 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 Contents 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

4 Realizing Hidden Value Navigating a Challenging Operational Environment Shrinking profit margins, challenging regulatory environments, 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 upgrading 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 A Drive for Operational Efficiency

5 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. 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 advantage 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 metrics, allocate service resources, and forecast needs accurately. Yet customer expectations are a powerful 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 implement 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 management 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 provide long term benefits.

6 Realizing Hidden Value Not All Data Is Created Equal Despite 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 performance 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 creates 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 productivity 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. Talent and effort metrics provide important insights into field force effectiveness, helping utilities optimize performance. 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

7 Why Time Data Is Critical While orders can vary considerably, top performers will execute their work as efficiently as possible, regardless 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. 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. By analyzing employee time, utility supervisors can create a holistic workforce management methodology that considers and optimizes workforce planning, workforce scheduling, and performance management, replacing the predominantly manual and subjective 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 identify 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 critical approvals for implementing new performance management processes and tools. While this can be difficult, utilities can bolster their position by developing and articulating a solid business case that provides a compelling rationale, new metrics proposed, measurement strategy, roadmap, and workforce communication plan. Utilities should be prepared to discuss 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

8 Realizing Hidden Value Moving Forward So 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. a measurable vision: Document the vision, specific objectives, and the measurable business results of an optimized 2.Create field service performance management program. rolling out a new performance management tool or process requires effective change management. 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 specific objectives they are seeking and why. Most importantly, the project team should identify specific 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

9 3. Understand what you have: Conduct 5. Analyze options: Create a detailed business case of possible solutions. One size technical due diligence of what data is available in current and planned does not fit all, given the wide variances in systems. Determine the feasibility of collecting utilities sizes, services, territories, and 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 information 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 from multiple sources The data you already possess management does not have to be can be tricky so early analysis an expensive problem to solve. is often the critical starting will help inform the total effort Significant value can usually be and the overall timeline for the point for creating new achieved with minimal investment. implementation. measurement baselines. Completing a business case will help you evaluate your options against critical criteria. 4. Prepare to measure progress: Analyze your existing data, if possible, to create a baseline that leverages historical data. If you re introducing new metrics for performance evaluation, it may be difficult to determine a baseline. Intuition and industry benchmarks 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. 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 implementation. 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.

10 Realizing Hidden Value case Study Conclusion Sapient 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 employees 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. Leading Energy Services Company Uses Insights to Optimize Field Force Effectiveness Sapient worked with a leading energy services provider 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. Business Challenge 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.

11 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 Results 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 comprehensive planning process, to inform workforce planning, budgeting, and operational reporting What Makes Sapient Different Sapient helps energy and utility companies succeed. 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. 1. Proven expertise in solving clients challenges, with a success rate that is three times the industry average 2. Deep insights into energy and utility companies strategic and operational imperatives, gained in the context of multi year partnerships with our clients 3. Global access to the right expertise, with a highly skilled workforce that is rigorously trained in the industry business processes, applications, and infrastructures 4. A unique delivery methodology, Sapient Approach, that delivers results in weeks, not months, enabling companies to identify and quickly respond to market changes About Sapient s Energy and Utilities Practice Sapient 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 success has led to multi year partnerships with our clients, enabling us to serve as a trusted advisor and collaborator on solving their toughest challenges. For more information, please visit or contact us at

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