Global Utility
Background
Since February 2004 The Customer Value Group (CVG) has provided support and guidance to the Global Utility with whom we worked on a number of the component parts of its global drive for working capital improvement. One of the main elements of this collaboration has involved the analysis and restructuring of cash collection and customer services management procedures within the Global Utility’s industrial and commercial arm.
The Challenge
As part of a former state-owned monopoly, they had never previously had to worry about the implications of competition and customer retention. The commercialisation of the business has, in effect, resulted in the system’s inability to manage efficiently industrial and commercial customers to the demanded market standards.
CVG Approach
The analysis demonstrated not only the need to adopt new processes and practices, but also the need for an overhaul of systems so that the company could cope with the required process changes.
We identified an opportunity to reduce debt by improving the cash collection process, but the system didn’t have the capability to undertake the customer segmentation and differentiation we wanted to apply, and this is vital to ensuring that the bulk of a company’s collection efforts are focused upon the customers who will deliver the greatest cash return
Siobhan McHugh, Project Manager
The Results
The software system went live in October/ November 2004, and within six weeks, £4.2m of additional cash was delivered with multiple payback on their investment. Following such positive early results, the Global Utility with whom we worked delivered an additional cash flow improvement of around £100m within 18 months. Their early successes with The Customer Value Group have therefore encouraged them to extend the implementation within their organisation to include customer service functionality essential to ongoing customer retention.
Quotes
Changing processes to accommodate their need to compete not only resulted in generating quick wins, but also allowed them to identify problem areas within their organisation which required change.
Once we’ve treated the symptoms, we work backwards to identify the root causes, and eliminate them
Dickie Bielenberg, MD of CVG
The satisfaction expressed by the Global Utility speaks for itself.
Building a collections system in-house was possibly an option, but there was a concern that if we had tried it, there would have been a long implementation, with high costs, problems with integration, and the data would have been generally transactional (without the task management in CVG).
Internal Project Manager
CVG provided the best option for a ‘black box’ turn-key solution. They have a high standard of people, and general consulting skills are very well-integrated into the business. We went to market with an outline of our requirements and spoke to five companies.
Project Sponsor
CVG provided the best option for a ‘black box’ turn-key solution. They have a high standard of people, and general consulting skills are very well-integrated into the business. We went to market with an outline of our requirements and spoke to five companies.
We devised a template for assessing the relevance of each product including previous history, cost, and service offering, short-listed three, and put them forward to the project board. Other products we looked at were London Bridge, Talleyman, Siebel, and Credica. We felt that CVG provided an excellent opportunity in terms of deployment time, cost, and business customisation. There was a very strong willingness and eagerness on the part of CVG to deliver what we needed, and we thought it a good opportunity to have something developed for our business. There is a great deal of willingness from the team to support our requests and requirements.
Project Sponsor
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Bridging the Gap
The tighter economic conditions have prompted businesses looking for competitive advantage with their customers to implement best practice software that integrates AR credit and collections with customer service management, as Dickie Bielenberg explains.
Customer Services Manager, Global Utility
