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HomeMy WebLinkAboutStaff Report 350-09TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DATE: AUGUST 3, 2009 REPORT TYPE: INFORMATIONAL SUBJECT: Utilities SAP Billing Update This is an informational report and no action is required. BACKGROUND DEPARTMENTS: UTILITIES AND ADMINISTRA TIVE SERVICES CMR: 350:09 On May 4, 2009, the Administrative Services and Utilities Departments implemented SAP's industry-specific solution for utilities (SAP IS-U). This system replaced the Utilities Department's ten-year old Customer Information System (CIS), and is used to create and manage customer accounts, apply rates to recover commodity expenses and other costs, and collect customer revenue through billing, for the following utilities in the City: electric, gas, water, wastewater, refuse, storm drain, and fiber optics. Approximately 360,000 Utilities bills, for an estimated $198,500,000, are annually generated and invoiced. The new system was selected to both replicate the functionality of the prior Utilities CIS and bring key operational and performance improvements including an online utility bill payment and customer information website (My Utilities Account); efficiency gains over time through integration with the existing SAP financial system; centralized customer interaction tracking and account history; and integration with the geographic information system. Overall, the system as implemented is performing at a level that meets these requirements. Since the system went online, however, a number of post-implementation issues have arisen causing challenges for a small number of customers and the Utilities organization. This report outlines the issues, the resolutions, and the ongoing work to ensure our customer service standards are met. DISCUSSION Utilities Billing Issues The implementation of the SAP software has had an impact on both customers and the Utilities Department's abilities to conduct business in a timely manner. As described below, the number of customers that have been affected is approximately six percent. Although the billing problems are addressed and corrected when they are identified, details of some of the problems have been publicized. CMR: 350:09 Page 1 of5 The main issues that affect business include: • Bill Print Errors There have been a relatively small number of incorrect calculations in the bill printing system, leading to errors in the detailed billing summary on the first page of those bills. In nearly all cases, the amount balance on the pay stub was the correct amount owed. Staff has adjusted the system configuration to reflect appropriate amounts. • Billing Errors There were approximately 70 cases where customer bills erroneously indicated that their bank accounts had been charged by the City. These customers were contacted by phone and informed of the erroneous information on their bill. There were approximately 850 cases where customer bank accounts were erroneously charged twice for the same monthly bill due to a mistake in the business process, not the result of a system error. Individual letters were sent to the affected customers, a press release was issued by the City, each customer account was corrected, and follow-up phone calls were made by Utilities staff to approximately 35 customers to ensure that the corrections had been accurately made to the customers' bank accounts. Bank overdraft fees resulting from the problem were reimbursed to three customers via a credit on their Utilities bill. Water and energy efficiency rebates, previously processed and mailed to customers as separate checks were all being applied to the outstanding balances of the monthly Utilities bills. Respecting the wishes of the majority of Utilities rebate customers, staff will determine if both options can be accommodated, or will return to the previous separate check issuance procedure. • Billing Delays Delays of up to 60 days have occurred in the billing of approximately 1100 customers due to data errors created during the transfer of information from the old billing system to the SAP system. These errors occurred because the bills were in mid-process, when the data transfer occurred. The bills have been extremely difficult and time consuming to fix because of the need to manually reverse and reenter data in SAP, prior to continuing with the billing process. • High Volume of Telephone Calls and Customer Communications. The Utilities Customer Services section is continuing to receive telephone calls at high rates due to both resolved and unresolved issues related to the SAP conversion. Call rates are over a 1000 per week, exceeding the Customer Service Center capacity of approximately 850 calls per week, resulting in either wait times of up to 30 minutes, or "abandoned" calls where customers hang-up prior to reaching a customer service representative. Roughly, 30 percent of incoming calls are currently being "abandoned," the number of phone calls, however, is expected to drop after current bills have been paid and as new bills are issued. In an effort to relieve some of the phone workload, a phone message offering waiting customers the option of sending an e-mail with their questions was added. E-mail questions and requests have been higher than anticipated with response times to customers taking anywhere from one to three days. Many of the queries are related to problems in the SAP billing system or with information included on the bills that have more recently been resolved. Customer Service Center walk-in customer traffic has also increased by 100% over historical levels (now averaging 60-70 customers per week) further adding to the unanticipated workload. • Additional Work Created by Account Verification Controls in SAP CMR: 350:09 Page 2 of5 Quality control parameters were established in the SAP billing system to ensure that accurate bills are sent to customers. Bills with data out-of-range of those parameters are pulled out of the processing queue for detailed review prior to being sent to the customers. The initial billing parameters set in SAP resulted in very high numbers of bills being pulled out of the processing queue to await manual review and processing. The suspension of bill processing can occur for several reasons which might all apply to any given account (missing information, meter reads too high/low). The first billing problem encountered causes suspension of the billing process and requires a fix before the billing process can continue. A second problem on the same accounts, but encountered sequentially, will again halt the process and require intervention. Similarly, a third or fourth problem will result in the same process suspension. The process to address each identified problem requires labor intensive and involved manual intervention and resolution. The ranges used to trigger bill suspension have been re-set by staff to be less sensitive, but still reasonable triggers, and the number of bills being pulled out of the queue has been reduced to approximately 700 per day. By direct contrast, the pre-SAP average number of bills requiring manual intervention was approximately 100 per day. Staff continues to refine the parameters to catch billing problems while allowing correct bills to continue through the billing process. • Increased Process Times Even with extensive training prior to the "go-live" of the SAP system, Customer Service Representatives continue to be challenged by the newness of the system. This has led to delays in the handling of different types of customer calls and requests. Analysis indicates a 100 to 300% increase in the current "per-transaction processing times" for Customer Service Representatives compared to the same period last year. These transactional delays have contributed to longer times to resolve customer issues, increased telephone wait times, greater numbers of billing-related e-mails and phone calls, and more dropped and abandoned phone calls from customers. As staff gains experience, transaction times are expected to be significantly reduced. • Business Process Errors Processing errors by staff have occurred due to unfamiliarity with the new processes in SAP and the need for more process controls. Resolution of Billing Issues Through both pre-and post-installation discussions with other utilities that have implemented the SAP customer billing system, it appears that the Palo Alto experience is rather typical during the initial months of rollout. The Palo Alto billing system is more complicated than that for most other utilities, and many of the problems derive out of the complexities of billing for up to seven utility services with varied rate, refund, proration, and rebate structures. In response to the billing issues staff has implemented a number of initiatives to mitigate the issues discussed above. They are as follows: • Since go-live, a support team consisting of ASD, Utilities, and Axon Consultants has been in place to correct program deficiencies. • A specialized team of staff and consultants was assembled on July 20 to correct the remaining accounts that have not been billed due to problems created in the transfer from the old billing system. As of July 25, fifty percent of the approximately 1,100 original unbilled accounts have been processed and await final billing. Staff will continue to address the remaining bills in backlog in the coming days, and by mid-August, it is CMR: 350:09 Page 3 of5 • estimated that all accounts in the original billing backlog will have been billed at least once. • Two additional, temporary staff members have been assigned to the Customer Service Center to answer the phones, resolve billing issues, and process work requests. • A monitoring program is in place tracking the backlog of work and customer wait times. • Customers have been encouraged to send problems by email to avoid long wait times in the phone queue. • A web page was created where customers can get information on the problems that are occurnng. • Account verification controls have been revised to reduce the number of bills needing manual review prior to billing. • Business processes have been revised and documented to reduce the chance of human- caused errors. Significant progress has been made to correct the problems outlined above. The results of the problem resolution have been a decrease in backlog of unresolved account billings. New billing issues are being investigated and resolved, and the number of new issues is steadily decreasing. The Customer Service Center is reducing the backlog of work and in the next few months will reach the point when they can meet the daily demand for investigating billing issues, and responding to customer calls, in a reasonable time. On an ongoing basis, the focus of the SAP team will be to review work practices to gain efficiencies that will improve service to the customer, and reduce workload on Customer Service and Meter Shop personnel. Temporary staffing resources may be required to manage the workload resulting from the transitional period until the system stabilizes, and programming changes are completed. Staff believes that after the transition period, the organization will experience the planned benefits from the new functionality of the system, including greater data accuracy, improved reporting capability, and improved quality control of business processes. Online Bill Pay System -"My Utilities Account" When released to full customer participation, the My Utilities Account (MUA) website is where customers will be able to view account information and pay their utility bills. The system was released to beta test users in May. The City received positive reviews, identification of problems, and suggestions for system improvement from the beta testers. The beta period continued into July to enable final configurations and to address problems in the system in preparation for making MUA available to all customers. The MUA system is close to being ready for final release, however, a final launch date will not be determined until the current customer service levels are significantly improved. The first priority of staff is to return to desired customer service levels so that we can fully support users on the new system without adversely affecting service to customers that currently contact the Customer Service Center. The MUA system allows customers to make utility payments via credit card. The system uses an encryption method called "Secure Sockets Layer" (SSL) to protect financial transactions from CMR: 350:09 Page 4 of5 unauthorized access during data transfers. While staff originally indicated to Council that credit card numbers would not be stored, storage of credit card information is required by SAP in order to maintain a transactional audit trail. Credit card information is stored separately and securely from the server being accessed by customers for online transactions. Additional security measures to protect credit card information were implemented including data masking (preventing viewing by unauthorized persons) and full encryption (encoding of data, with access restricted to authorized employees), with the exception of the last four digits to allow verification of customer identity. The security configuration of the system fully conforms to Purchase Card Industry (PCI) standards by encrypting consumer credit card numbers. RESOURCE IMPACT With the initial migration to SAP complete, ongoing maintenance needs and cost will be assessed. Staff will return to Council with a recommendation for funding of the ongoing Utilities SAP billing system maintenance. POLICY IMPLICATIONS There are no policy implications identified, however, enhancements to the system because of policy changes affecting the design of utilities rates will require future changes to the system. ENVIRONMENTAL REVIEW This report does not require review under the California Environmental Quality Act (CEQA) because it does not meet the definition of a "project" pursuant to California Public Resources Code Section 21065. ATTACHMENT None PREPARED BY: DEPARTMENT APPROVAL: DEPARTMENT APPROVAL: CITY MANAGER APPROVAL: CMR: 350:09 avid Ramberg, Assistant Director "I--.... m Marshall, Assistant Director .... ~..: om Auzenne, Assistant Director evin End by, Sr. Business Analyst Director of Administrative Services Page 5 of5