B-5 Customer Care Enhancement (CCE) Project Enhancement (CCE) Project CPCN Application Workshop CPCN Application Workshop September 9, 2009 Terasen Gas. A Fortis company. T ERASEN G AS - CPCN C USTOMER C ARE E NHANCEMENTS E XHIBIT
Agenda g • Introductions Introductions • June to August Activities – Cost Update • Project Overview j • Change Drivers • Alternatives Analysis • Project Costs • Customer and Societal Benefits • Summary S • Regulatory Process Terasen Gas. A Fortis company. 2
June to August Activities June to August Activities Since June, three key activities have taken place to reach updated costs: Acti it Activity Project Component Impacted Project Component Impacted Comments Comments Insourced Call Centre Competitive labour agreement supports a cost 1. Workforce Agreement effective in province solution Billing Operations (COPE 378) Insourced Call Centre Location and facilities assessments – Western Insourced Call Centre Location and facilities assessments Western Canadian focus Billing Operations Requirement for two call centers – redundancy for 2. Facilities Analysis emergency handling Focus on workforce sustainment Insourced Call Centre RFQ Process for call centre technology suite completed Aspect Software Inc selected 3. Call Centre Technologies Supports multi-channel communications and the ability to migrate to more cost effective self serve options Completion of the above activities has enabled the refinement of project costs. Updated Project costs – reduction of $33 million to $122 million. Terasen Gas. A Fortis company. 3
Project Overview j A) Terasen Application 1) CIS Software & 2) Customer Care Implementation Services Customer Care Enhancement B) Commission Request Project 2) CIS 2) CIS Implementation & Maintenance 1) CIS 3) Call Centre Software 4) Billing & Back Office Amended Application prepared to reflect Commission’s request. Terasen Gas. A Fortis company. 4
Change Drivers g The project was initiated in response to 3 external drivers: 1) Business Environment 1) B siness En ironment 2) C stomer Care Ad ances 2) Customer Care Advances 3) Utility Outsourcing Industry 3) Utilit O tso rcing Ind str BC energy environment Increasing focus on energy Customer service as means of Move to strategic sourcing models efficiency & conservation differentiation + + + + More complicated array of Maintain existing and attract new p y g Critical systems and functions Critical systems and functions energy options & issues customers under direct management of utilities rather than outsourced Transactional activities remain Competitive environment Technology advances and changing customer requirements outsourced Commodity price volatility Service channel evolution Service channel evolution Provides organizational flexibility Provides organizational flexibility Changing customer perceptions Changing customer perceptions and control to adapt to change Organizational flexibility Growing use of alternative energy Terasen’s new customer care model will provide: Flexibility to enable faster, more efficient and effective response to customer needs and market place change Direct control over critical customer touch points and information assets to allow enhanced quality of service Terasen Gas. A Fortis company. 5
What Options Were Considered? a Op o s e e Co s de ed In assessing its customer care functions, Terasen Gas assessed 4 potential models: 1) Status Quo; 2) Full outsourced model; 3) Full insourced model; and, 4) Strategic sourcing model. Step 1: Identified Options Step 2: Decision Considerations Step 3: Result Option Comments Decision Considerations In house support for customer facing and 4.Strategic 4 Strategic In house support for customer facing and Customer value C t l Options Considered O i C id d sourcing complex functions Model flexibility and 1.Status Quo Provide direct ownership of customer responsiveness 2.Fully outsourced experience Ownership of customer Continue to outsource high volume, low 3.Fully insourced experience complexity transactions complexity transactions 4 Strategic sourcing 4.Strategic sourcing Market comparability Provide organizational flexibility to Cost to support change respond to change Response to change in the future will be market competitive A strategic sourcing model was determined to be the best customer care model available to successfully address the implications of the evolving BC energy market, customer needs, and utility outsourcing industry industry. Terasen Gas. A Fortis company. 6
Agenda g • Introductions Introductions • June to August Activities – Cost Update • Project Overview j • Change Drivers • Alternatives Analysis • Project Costs • Customer and Societal Benefits • Summary • Regulatory Process Terasen Gas. A Fortis company. 7
Alternatives Analysis – CIS Software y • Ownership – Direct ownership – Software provided as a service • Software Software – Buy (Commercial off the Shelf) – Build • Evaluation Process – Competitive Process • Facilitated by independent 3 rd party (Micon Consulting) y p p y ( g) • CIS Options – SAP – Oracle O l – Peace Terasen Gas. A Fortis company. 8
Alternatives Analysis – CIS Implementation y p • CIS Implementation Strategy – Phased Implementation – Full Implementation • Implementation Resourcing Strategy p e e tat o esou c g St ategy – Engage experienced and qualified System Integrator – 3rd party expertise with specific skills to augment System Integrator skills g – Terasen SMEs and technical support • System Integrator evaluation – Competitive Process – Competitive Process • Facilitated by independent 3 rd party (Micon Consulting) – Each System Integrator was encouraged to provide proposal for both SAP & Oracle CIS both SAP & Oracle CIS – Preferred System Integrator – HCL Axon Terasen Gas. A Fortis company. 9
Alternatives Analysis – CIS Maintenance y • CIS Maintenance Strategy – Maintain with Terasen Gas employees – Outsource maintenance • Key consideration – Total cost of ownership was key to overall decision – All three components (software, implementation and ongoing All three components (software implementation and ongoing maintenance) must be considered in unison to make final determination • An SAP CIS solution implemented by HCL Axon and maintained by Terasen Gas employees represents the lowest total cost of ownership for Terasen Gas the lowest total cost of ownership for Terasen Gas and its customers. Terasen Gas. A Fortis company. 10
Key Components Of The Call Centre y p The Insourced Call Centre analysis included 3 key components: 1) Staffing; 2) Facilities; 3) Technology. 1) Staffing 2) Facilities 3) Technology 200 Terasen FTEs Primary Facility – Unified IP Solution + + Lower Mainland from Aspect COPE affiliated Leased Building Software Inc New Collective Secondary Facility – Agreement Interior; Purchased Building An Insourced Call Centre is the best model for delivering service that our customers require. Terasen Gas. A Fortis company. 11
Call Centre Analysis - Staffing Ca Ce e a ys s S a g Step 1: Establish criteria Step 2: Evaluation Process Step 3: Result Comments Approximately 200 FTEs based on 1.Staffing Levels historical volumes Evaluation Process Flexible workforce Third party expertise to Third party expertise to Criteria Criteria Local hiring – focused on customer 2.Skill set / model staffing 1.Staffing requirement competency value requirements Specialized skill set – multi-channel 2.Skill set / Peer review / competency response compensation strategy Regional knowledge and utility 3.Cost / Sensitivity analysis Sensitivity analysis Compensation expertise related to new communication channels Targeted compensation package to 3.Compensation Strategy address call centre demographics COPE labour agreement Flexible Flexible – addresses the special addresses the special needs of this unique workforce In partnership with COPE a market competitive agreement supporting work force flexibility has been negotiated. Terasen Gas. A Fortis company. 12
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