Secondly, those that are not on the grid yet, require that the grid be expanded to provide them with electricity services.

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2 EXECUTIVE SUMMARY This white paper broadly explores customer relationship management (CRM) practices in the electricity distribution sector in Nigeria. It identifies some of the existing challenges and how they can be improved with the use of ICT and better service design. In a country where more than half the population has access to electricity through millions of connections to the grid, the challenge facing the sector is better imagined than described. First, those that are privileged to be connected to the grid, need improved services. They need to be connected 24x7, occasional outages and blackouts need to be better communicated in advance, and the billing systems and payment systems of the electricity distribution companies (Discos) need to work seamlessly. These are no small tasks. Appropriate use of CRM solutions can catalyze many of the solutions to address these challenges. Secondly, those that are not on the grid yet, require that the grid be expanded to provide them with electricity services. This whitepaper documents the current state of the sector to draw a better understanding of the key actors and their roles. A few specific recommendations are outlined in the report using short, medium and long-term lenses. However, to move from identification of challenges and potential solutions to implementation of some of the recommendations on the ground, a series of concerted efforts are required by a number of key stakeholder groups. A well thought-out process needs to be initiated to get the ball rolling. This report may be viewed as a critical first step in making the business case for that process. OVERVIEW OF CRM Customer Relationship Management concerns the relationship between the organization and its customers. Customers are the lifeblood of any organization, be it a global corporation with thousands of employees and a multi-billion Naira turnover, or a sole trader with a handful of regular customers. The quality of your relationships with your customers is essential to running your business successfully. Recent global economic conditions have made it clear that staying close to your customers has never been more important. Customer Relationship Management (CRM) is a business strategy for putting customers at the center of your business, improving customer satisfaction and loyalty while reducing the costs of customer interaction. As companies carefully consider where to apply resources to drive their business forward, whether to enhance relationships with existing customers, establish relationships with new customers, or find new markets and exploit new business models -- CRM software consistently remains a top priority area of investment. Successful organizations use three steps to build customer relationships: determine mutually satisfying goals between organization and customers establish and maintain customer rapport produce positive feelings in the organization and the customers The ultimate purpose of CRM, like any organizational initiative, is to increase profit. In the case of CRM, this is achieved mainly by providing a better service to your customers than your competitors. CRM not only improves 2 P a g e

3 the service to customers; a good CRM system capability will also reduce costs, wastage, and And a new way of doing things: Processes that are capable and complaints. Effective CRM also reduces staff stress, because attrition - a major cause of stress, reduces as services and relationships improve. CRM enables instant market research as well; opening the lines of communications with your customers gives you direct constant market reaction to your products, services and performance, far better than any market survey. Good CRM also helps you grow your business: customers stay with you longer; customer churn rates reduce; referrals to new customers increase from increasing numbers of satisfied customers; demand reduces on fire-fighting and trouble-shooting staff, and overall the organization's service flows and teams work more efficiently and more happily. The modern approach to customer relationship management is based on satisfying all of the needs - people, systems, processes, etc. across the spectrum of an organization. So what do we need to make this quantum leap of customer integration? A new way of thinking: Change in paradigm Change in the messages sent and received Change in the overall culture effective Structures and systems that support a business centered on its customers Connectivity (end-to-end processes) both internally and externally (e.g.; with suppliers) On the auspices of the above information, developing an effective CRM should be paramount to every organization. An effective CRM is one in which the relationships with customers is ongoing, cooperative and built for the long term. Organizations who have many transitory relationships with customers consequently have to spend a lot of money on finding new customers. The cost of keeping existing customers is a tiny fraction of the cost of acquiring new customers. There are significant business benefits which accrue from an effective, integrated Customer Relationship Management approach. These include: Increased customer satisfaction, because they are getting exactly what they want (i.e. exceeding expectations) Ensuring that the focus of the organization is external Growth in numbers of customers 3 P a g e

4 Maximization of opportunities (e.g. increased services, referrals, etc.) Increased access to a source of market and competitor information Highlighting poor operational processes Long term profitability and sustainability Forward thinking organizations understand the vital need to maintain a strategic focus on CRM and to resource and manage it appropriately. Reduced costs, because the right things are being done (i.e. effective and efficient operation) Highlighting competencies required for an effective CRM process The following characteristics are associated with delivery of excellent CRM: Reliability Responsiveness Accessibility Safety Courtesy Consideration Communication Recognizing the customer Competence CRM however has certain conditions. The organization and the customers both have sets of conditions to consider when building the relationship, such as wants and needs of both parties; Organizations need to make a profit to survive and grow Customers want good service, a quality product and an acceptable price Good CRM can influence both sets of conditions CRM can have a major impact on an organization through: Shifting the focus from product to customer Streamlining the offer to what the customer requires, not want the organization can make NIGERIA ELECTRICITY REFORMS HISTORICAL TREND Electricity grew from few kilowatts used to serve the colonial masters in Lagos, Nigeria in the late 19th century to the Electricity Corporation of Nigeria (ECN) established by Act of parliament in In 1962, Niger Dams Authority (NDA) was set up to develop hydroelectricity which was merged with ECN to form National Electric Power Authority (NEPA) in Decline in electricity generation capacity in an ever increasing population, with no visible plan to commensurately increase generating capacity, caused electric power demand to increasingly overshoot available supply. By year 2000, the problem sent Nigeria into electricity supply crisis, which caused the Federal Executive Council (FEC) in year 2001 to approve 4 P a g e

5 the National Electric Power Policy (NEPP), which called for fundamental changes to ownership, control and regulation of the power sector. The 2001 NEPP actually set the roadmap for Nigeria s power sector privatization, but due to the bureaucracy in government, the policy could not be signed into law until The signed document became the Electric Power Sector Reform Act 0f The ESPR Act 2005 translated NEPA into the newly incorporated Power Holding Company of Nigeria (PHCN) Plc. comprising of 18 separate successor companies e. Ineffective regulation f. High technical losses and vandalism g. Insufficient transmission and distribution facilities. h. Inefficient use of electricity by consumers i. Inappropriate industries and market structure j. Unclear description of roles and responsibilities. GENERATING (Genco) COMPANY PHCN PLC. SUCCESSOR COMPANIES TRANSMISSION COMPANY (Transco) DISTRIBUTION COMPANY (Disco) Kainji Power Plc. Shiroro Power Plc. Ughelli Power Plc. Sapele Power Plc. Afam Power Plc. Gerega Power Plc. Transmission Company of Nigeria Eko Electricity Distribution co. Plc. Ikeja Electricity Distribution co. Plc. Ibadan Electricity Distribution co. Plc. Benin Electricity Distribution co. Plc. Abuja Electricity Distribution co. Plc. Port Harcourt Electricity Distribution co. Plc. Enugu Electricity Distribution co. Plc. Kaduna Electricity Distribution co. Plc. Kano Electricity Distribution co. Plc. Jos Electricity Distribution co. Plc. Yola Electricity Distribution co. Plc. PHCN took over the assets, liabilities and employees of NEPA and was responsible for the generation (6 companies), transmission (a company) and distribution (11 companies). The PHCN s incorporated successors in the unbundling process are given in Table above; The problems or challenges which birth the reforms as highlighted by the government are as follows; a. Limited access to infrastructure, b. Inadequate power generating capacity c. Inefficient usage capacity d. Lack of capital for investment With the problems identified, the Reform Bill sought solutions through achieving the following five (5) objectives; a. Unbundled NEPA through 18 separate successor companies incorporated in PHCN. b. Privatized the unbundled entities c. Established a regulatory Agency (The new Nigerian Electricity Regulating Commission (NERC)). d. Established a rural electrification agency and fund (the same infested with corruption to the tune of N52billion causing its suspension between 2006 and 2009) e. Established Electric Power Consumer Assistance Fund 5 P a g e

6 Expectation of Nigerians of improved power supply remained a mirage as the newly incorporated PHCN performed below expectation. PHCN ceased to exist from 1st November 2013 following a successful privatization process by the Goodluck Jonathan government. CURRENT CUSTOMER RELATIONSHIP CHALLENGES IN THE NIGERIAN POWER SECTOR Over the years, the Nigerian Power Sector has performed below expectation. Several school of thoughts have attributed the poor performance to different reasons. The underlining factors common to these several school of thoughts is the customer relationship challenges with the Nigerian power sector that has culminated to poor performance includes but are not limited to the following: A. POWER LINES AND EQUIPMENT VANDALISM: Vandalisation, especially of the transmission infrastructures and underground cables around the distribution network has been a common occurrence, even before the on-going reforms. Most times, the vandalism is blamed on the power brokers behind power Generators importers. When such vandalisation occurs, it takes long period of time for the power authorities to be aware of it and address it because there is little or no medium for communicating such happenings to the appropriate authorities. B. COMMUNICATION BREACH/ GAP: There is a gap in the communication channel between the power distribution companies in Nigeria and its customers. Over the years, Nigerians have anticipated that this breach will be addressed but it is an issue that is yet to be resolved. Prolonged Power outages occur frequently without due communication to the customers of such outage. Despite such outages, the bills that come in at the end of the month outweigh the consumption. C. TARIFF HIKE: Consumers are not aware of the yard stick used by the Nigerian power companies to measure the amount of electricity consumption for a given time period, thus they tend to disagree with the bills issued to them, hence reluctant to pay up their bills. 6 P a g e

7 D. UNACCESSIBILITY TO HISTORICAL RECORDS: Records showing the historical transaction of a customer are not readily accessible by the customers. This usually culminate to disagreement between the customers and the power companies as to the actual amount of debt being owed because accruals are usually calculated without an appropriate methodology. E. DELAY IN ATTENDING TO EMERGENCIES: Emergencies such as damaged electrical cables, poles, faulty transformers usually occur. When such emergencies occur, there are no help lines with which the affected customer can channel his/ her complaint and as such the issue remains unresolved for a long period of time. CRM SOLUTIONS Customers are the lifeblood of any organization. Thus to ensure continuity, it is vital that a sustainable relationship is established. CRM has helped reduce the challenges faced in establishing a sustainable relationship with customers through its various solutions. These solutions will solve the various problems facing the power sector through improving customer satisfaction. Some of the most reliable and widely used CRM solutions include; Microsoft Dynamics and SAP CRM Several CRM solutions will help mitigate these challenges. Microsoft Dynamics is an integrated Software Solution to simplify complex management of electricity through; managing power usage intelligently, delivering power and analysis based on Customer demands, improve asset utilization, increase power availability. The current challenges of the Nigerian power sector enumerated above can be addressed through the use of Dynamics CRM. On this plethora, Dynamics CRM will help solve the above challenges through; 7 P a g e

8 Stakeholder Relationship Management; this entails demonstrating regulatory compliance, enhancing customer care and improving stakeholder relationship management. Advanced Insight and Segmentation; this offers advanced insight, segmentation to provide new value proposition to convince the customer. On demand and in Real time Monitoring; this improves billing accuracy, customer service and outage management by integrating customer usage information with enterprise systems. Single Custom dashboard; Set up alerts to track and monitor progress of different interactions, track enquiries, cases, complaints and service escalations The benefits associated with using MS Dynamics CRM in the Nigeria power sector cannot be overemphasized. Some of such benefits include; Empower agents and representatives with dynamic, unified desktop, front-to-back office integration. Automated process guides self-service users to the right answer, deflecting costly calls to cost center. Leveraging advanced analytics and real-time decisioning to recommend relevant offers. Interface-Outlook look alike, so it is easy to train your staff in system s operations. 90% more increased visibility into metering operations, billing accuracy, customer service and relationship management. 80% Reduced outages, improve reliability and reduction in response times for fault resolution. Dynamics CRM in the Contact Center - Keeping Multiple Source System Data in Sync. SAP CRM for the Utilities Industry helps companies retain customers. WALLDORF, Germany - August 8, 2002, announced that a growing number of utility companies are benefiting from implementing the industry-specific customer relationship management (CRM) capabilities of SAP Customer Relationship Management (SAP CRM) for the utilities industry. The seamlessly integrated solution of SAP CRM and SAP Utilities, introduced by SAP AG, addresses utility companies heightened focus on customer retention. Utility companies have found they must offer more customer-oriented services to deepen customer relationship. The integration of SAP Utilities and SAP CRM gives energy providers greater transparency and efficiency in their product offering, service, and sales processes and the ability to improve customer service and customer loyalty. Software solutions for power companies must be able to support two process chains: the purchasing and provision of power and customer relationship management from the first contact and contracting, to the delivery of agreed services, final billing, and customer support. With the seamless integration of the front-end system of SAP CRM with the back-end system, SAP Utilities gives utility companies a complete solution to manage business processes related to the procurement, provision, and billing of energy services as well as the roll out of customer programs and service centers. Both SAP solutions share a common database, so comprehensive customer information from the billing system of SAP Utilities forms the basis for 8 P a g e

9 detailed CRM analytics and efficient customer support. In addition, the seamless integration of SAP CRM for the utilities industry reduces total cost of ownership (TCO) and expedites return on investment (ROI). The end-to-end integration between SAP Utilities and SAP CRM ensures that valuable customer data from the industry solution is directly available for customer relationship management. With this foundation, utility companies are able to carry out detailed customer and demand analyses that are the basis for efficient and successful customer relationship management. CASE SAMPLE OF THE USE OF CRM SOLUTIONS IN THE POWER SECTOR OF OTHER COUNTRIES To date, several utility companies around the globe have implemented CRM solutions and are currently serving millions of customers. These companies include German GASAG in Berlin, GEW RheinEnergie AG in Cologne, EnBW of Baden-Wurttemberg, entega in Darmstadt, Energie AG in Austria, the Swiss Romande Energie AG, the Danish NESA, Metrogas in Chile, Electrone in Italy, and Bristol Water in Great Britain. An additional 21 utility companies worldwide are currently implementing CRM projects, aimed at serving another 11.2 million customers The following examples gives proof of utility companies that have already implemented the CRM integrated solution, reporting on increased customer loyalty and higher efficiency in the companies business processes. Energie AG, the leading energy and Infrastructure Company in Upper Austria, supplies electricity to 410,000 customers throughout the country. The energy company, based in Linz, Austria, was looking for a solution to optimize business processes in order to meet the requirements of the deregulated market. Its priorities were customer service, new billing procedures in line with unbundling guidelines, and energy quantity balancing with the required exchange of data. Energie AG was the first company worldwide to implement the energy data management capability from SAP, and they were also the pioneer for the new integrated solution. Leo Windtner, CEO of Energie AG, said, The complexity of transactions has clearly increased with the deregulation of the electricity market. SAP s software solution helps us to take care of our customers in a more comprehensive yet efficient way. We have achieved higher customer satisfaction and more efficient operating procedures. Romande Energie AG The Swiss Electric Company Romande Energie, provider of alternative energy, was looking for new ways to service its 180,000 direct and approximately 60,000 indirect customers. Its main goal was to maintain and increase its market share through a high level of customer satisfaction. The company also sought to improve the structuring of marketing activities to allow for more effective planning and implementation. Increased employee satisfaction was another issue. To meet these objectives, Romande Energie implemented an efficient call center, which today operates on the basis of integrated functionality from SAP CRM. Currently, millions of customers around the globe have purchased CRM solutions to drive a customer-centric business model. RECOMMENDATIONS CRM is an integrated approach to identifying, acquiring, and retaining customers. Its goal is to make it easy for customers to do business with the organization any way they want at any time, through any channel, in any language or currency and to make customers feel that they are dealing with a single, unified organization that recognizes them at every touch point. Recommendations were developed keeping this broader goal in mind. The following which are enhanced by CRM solutions are recommended for adoption in the Nigerian power sector as it will help eliminate the current customer 9 P a g e

10 relationship problems faced in the sector; Each of the distributors should have 24/7 dedicated call centers. Complaints or issues raised by a customer through call centers or customer service centers should be recorded and handled by an adequate grievance tracking system with specific time lines. That way it could be treated as a good KPI tool for assessing the quality of services by distributors. necessary forms, usage and payment history information, options for online application and bill payment, load shedding forecasting, etc. When providing access to the online data, for example personal billing and usage history, proper security and privacy measures need to be incorporated. SMS based notifications and status updates of any query or complaint could be considered as an efficient tool of customer relationship management. Bu t an accurate linking of mobile phone numbers with the meter numbers is a required first step in this effort. At present, majority of the Discos maintain their own database system to record data in a very general format. CRM focused software (i.e. MS Dynamics or SAP CRM) could be leveraged or developed to streamline the customer support and services. Over the years, internet users in the country have increased tremendously, this presents a good platform to electricity distribution companies for staying in touch with a large pool of their consumers online. Each of the Discos should have interactive websites offering online services, such as downloading of CONCLUSION The electricity sector in Nigeria is at the crossroad. Doing more of the same is not going to yield the supply and distribution of electricity the country so urgently need to continue its growth journey. Fundamental shift in mindsets, disruptive innovation in products and service design and delivery and above all, an unwavering 10 P a g e

11 commitment by the leadership to improve the energy situation in the country is much needed. The analysis and recommendations put forward in this report are intended to make a meaningful contribution towards this journey. Author s Profile Patrick Okusiriki is a staff of Signal Alliance Limited. He works with the project management unit. His wealth of experience was built on the auspices of motivation, love for literature, and desire to impact. This white paper is his first published piece of literature, though he has other works to his credit. He is a graduate of accounting from the University of Port- Harcourt. About Signal Alliance Founded in 1996, Signal Alliance is an end-to-end IT Company which specializes in systems integration has grown to be a most vibrant, forward moving ICT company in Nigeria with offices in Lagos and Abuja FCT. With solid industry experience spanning across the major sectors of the Nigerian industry, Signal Alliance offers services in the areas of Technology Support, Network Infrastructure, Enterprise Applications and Service Assurance. Signal Alliance boasts of highly skilled and certified consultants as well as major strategic partnerships with World industry giants such as Microsoft, Cisco and CA Technologies. The company prides itself on its ability to gain a thorough understanding of clients businesses and using appropriate technology as a bridge between where the client is and where it wants to go. Our Vision Our vision is to be a leading global ICT company shaping the market and the future of IT. Our Mission Our Mission to provide unique ICT solutions through skilled professionals, excellent customer engagement and dependable processes. Contact Us Lagos Office 8th Floor, UBA House, 57 Marina, Lagos. Abuja Office 3, Fez Street, Off Kumasi Crescent, Wuse 2, Abuja, Telephone , , , [email protected] Website 11 P a g e