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RESOLVING THE BILLING CRISIS
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Agenda
1. Welcome & Introduction
2. Public Finance Policy
3. Evolution of Public Finance Policy
4. Problem Definition
5. City Power & Joburg Water Issues
6. Property Unit Issues
7. Developmental Planning, Property Unit & PIKITUP Issues
8. Solution Definition
9. Progress to date
10. RSSC vs. MOEs Responsibilities
11. Approach & Methodology
12. Summary
13. Conclusion
2
Welcome & Introduction
A well functioning centralised Revenue Shared Services Centre (RSSC) function is an anchor in revenue generation
Aligns all efforts related to revenue generation across the City
Safeguards the surplus
Safeguards the liquidity level
But... We have a crisis in the RSSC function
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Public Finance Policy Guideline: Principles
Do’s (Symmetric) Don’ts (Asymmetric)
Fiscal Discipline:Spending within our means, balanced budget, revenue equalling or exceeding budget
Fiscal Expansionism:Increasing spending not informed by availability of resources
Fiscal Consolidation:Aiming for a budget surplus
Fiscal Erosion:Surge in budget deficit
Fiscal Sustainability:Maintaining prudent capital structure
Fiscal Cliff:Deficit spending in a climate of reduction in revenues and fiscal erosion
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Evolution Of Public Finance Policy Management
Political Leadership
TechnocracyLegislation
(Normative)
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Evolution Of Public Finance Policy Management: Political Leadership
They take lead in crafting public finance policy to achieve electoral (political) mandate
They are intimately, and proactively involved in translating legislation into programmes of action
They are the wise, informed agents of change, and provide leadership in the tenor and fervour of policy implementation
They enjoy absolute ideological and policy autonomy
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Problem Definition:
Scope
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• Across the City there are pockets of revenue and activities that impact the City’s revenue
• Efforts are not coordinated
Problem Definition
ORIGINAL SITUATION
Technical Issues → Unresolved Issues → Negative Perception → Questionable Credibility
CURRENT SITUATION
Questionable Credibility → Questionable Practices → High Frequency of Disputes
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Problem Definition
ISSUES
Inconsistent flow of the value chain
Low coverage of physical reading, ↑estimates (↓Credibility = ↑Disputes)
Incorrect readings from MOEs
Incorrect readings used by RSSC
Questionable accounting practices
Fraudulent practices such as creation of fictitious accounts
Fraudulent devaluation of properties
Possible legal contraventions
Inconsistent processes
Inadequate customer care
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City Power & Joburg Water
Issues
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Property Unit Issues
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Developmental Planning,
Property Unit & PIKITUP
Issues
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Solution Definition
LEADERSHIP
Request Executive Mayor for elevated authority over all City revenue related matters to be granted to MMC for Finance
Similar setup has been observed in Cape Town
To improve financial management and controls, Finance Directors in departments should report to Group Finance
VALUE CHAIN
Tightening the value chain
Developmental Planning → MOEs → Group Finance
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Solution Definition
METER READING & MANAGEMENT
Meter reading to be done by Group Finance, thus improving accountability
Timeous notification of changes in meter hardware
Thorough testing of meter hardware and software
Sufficient control in meter hardware changes
Frequent physical audit of meters
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Solution Definition
PEOPLE, PROCESSES & SYSTEMS
Reviewing processes, policies, and procedures
Conducting supplementary valuations
Improving the capacity of the valuation department
Recruiting qualified and skilled people
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Progress to date
CUSTOMER ACCOUNTS
Forensic audit on customer accounts are on going.
System access for individuals who are under investigation has been revoked.
PAST CREDIBLE INTERVENTIONS
A diagnostic exercise is underway looking at the interventions which were supposed to be implemented.
PROPERTY VALUATIONS
Properties that were fraudulently devalued have been rectified.
CUSTOMER SUPPORT
Active participation in unblocking processes.
Active participation in issue resolution.18
RSSC Responsibilities
The ideal model requires seamless system including all stakeholders to improve on the customer experience and enable a single property view from Land Information to customer interface.
RSSC Responsibility:
Order creation (download)
Meter reading upload
Meter reading
Meter reading quality control
Bill Transactional Processing
Invoicing
Statement Distribution
Query resolution & Check Reading
Revenue Collection
Disconnection & Reconnection (Credit Control)
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MOEs Responsibilities
Entities Responsibility:
Technical Device management
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Policy Amendments
Roll Out Prepaid meters on new connection.
Account collection leverage using prepaid vending system.
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Approach & Methodology
ESTABLISHING THE BILLING CRISIS WAR ROOM
Internally led team dedicated on recommending and implementing solutions.
Composed of skilled and qualified brains from the relevant departments and MOEs.
Focused on the two streams, issue resolution ❶ and providing solutions towards the root causes ❷.
Assistance of an external service provider will be sought to improve capacity and ensure complete coverage of issues
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Approach & Methodology
GOALS OF THE BILLING CRISIS WAR ROOM
Complete Billing
Accurate and Clear Invoicing
Effective Payment Process
Effective Credit Management
Improved Customer Relationship Management
Timeous Issue Resolution
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Approach & Methodology
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STREAM ❶: ISSUE RESOLUTION – DEALING WITH SYMPTOMS
STREAM ❷: ROOT CAUSE FOCUS
Root Cause Focus
Review & Recommend
Consult & Amend
Implement & Review
Amend & Entrench
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Accurate property, asset and customer
detailsAccurate invoicingComplete billing
Effective payment process
Effective credit management
Property rates
Service charges
Reprioritised• Property rate categories and/or
market values used to invoice
customers missing or incorrect
• Differing utility rate categories
are applied to same property to
invoice customers for services
consumed
• Customers are invoiced on
estimated meter readings
beyond the period allowed
• Customers are invoiced on
estimated readings after
services have been cut off or
the customer moved out or
changed to prepaid
• Meter device details on SAP
ISU are incomplete or
inaccurate
• Not all overdue accounts that
should enter dunning do so
• Accounts that should be
disconnected are not
disconnected
• No standardised processes nor
systems for external collections
• No reports generated to review
revenue completeness
• No indicator/flag in SAP ISU to
exclude certain services on a
property (e.g. Eskom
properties)
• Not all meter device information
available
Gap
s A
dd
ress
ed
• Unclear business processes for
updating customer and property
details
• Lack of training, quality control
and performance management
• No validations within SAP CRM
• Customer data in SAP CRM
and ISU is of a sub standard
quality
• Lack of revenue completeness
process and ownership
Customer Relationship Management
Interdependencies
2. Query resolution process
7. Credit management 6. Cash collection and
management5. Revenue accuracy1. Customer details
3. Call Volume Management
Inte
rve
nti
on
ar
eas
4. Revenue completeness
• Communication between Front
and Back office not sufficient to
enable agents to serve
customers effectively
• Key account queries not
prioritised on SAP
• Incorrect routing of queries
• Open queries delay collection of
revenue
• Staff profiles in call centre not
aligned to demand
• Lack of single customer view
results in duplicate service
requests
• Disparity in distribution of staff
numbers between call centres
• Inefficiencies in transferring of
calls between call centres and
routing to Back office
• 90% Completeness of BP
information, Deeds interface
rejections minimized
Be
ne
fits
• Indicators on what services
should be billed per property
• Net Increase in Revenue
invoiced of R386m (combined
with Revenue Accuracy
intervention
• Net reduction in uncollected
revenue R261m
• Accounts going into dunning
increase by R1.1bn.
• Release R3.5bn to be
disconnected for potential
collection
• Reduction in Queries>30 to zero
• Abandonment Rate below 10%
• 80% Calls answered within 60
seconds
SUMMARY
THANK YOU
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