Best Practices: Thames Water Adopts BPMS Solution to Streamline ...

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Best Practices: Thames Water Adopts
BPMS Solution to Streamline Its Customer
Services, with Wipro as Systems
Integrator
IDC Energy Insights: European Utility IT Strategies
BEST PRACTICES #EIOS05T
Roberta Bigliani Daniella Muallem
IDC ENERGY INSIGHTS OPINION
This IDC Energy Insights report details Thames Water's journey to
implement an advanced business process management system in its
Customer Services business unit, for eight months from 2010–2011.
This approach enabled Thames Water to realize significant operational
and business benefits in a short time despite financial constraints.
● The ability to implement changes rapidly was critical to achieving
satisfactory benefits. Thames Water decided to deploy a Business
Process Management Suite (BPMS), working with long-term
partner Wipro as the systems integrator. The program was
implemented in four stages (sprints) of 7–8 weeks, with new
benefits realized at the end of each sprint.
● By applying the BPMS to a range of business processes with
impact on customer satisfaction, the company succeeded in
reducing contact volume and repeat rates to realize opex benefits.
Qualitative benefits were also realized, including improvements in
both employee and customer satisfaction. Considerable savings in
people hours (over 47,000) were achieved as a result of improved
transaction handling time, automation of manual activities, and
improvements in how data is presented to agents.
● Even if the implementation of a strategic solution might represent
the long-term choice for utilities, alternative cost-effective
solutions with faster turnaround times are likely to become more
appealing as increasing regulatory demands and costs put pressure
on utility spending.
August 2011, IDC Energy Insights #EIOS05T
IDC Energy Insights: European Utility IT Strategies: Best Practices

TABLE OF CONTENTS
In This Study 1
IDC Energy Insights Case Studies Series ................................................................................................ 1
Situation Overview 1
Company Overview .................................................................................................................................. 1
Business Needs........................................................................................................................................ 2
Management Challenges.......................................................................................................................... 2
The Best Practices 3
Background and Objectives...................................................................................................................... 3
Solution Description.................................................................................................................................. 4
Business Value......................................................................................................................................... 11
Lessons Learned ...................................................................................................................................... 12
Future Outlook 13
Next Steps ................................................................................................................................................ 13
Essential Guidance 13
Project Impact Assessment ...................................................................................................................... 13
Actions to Consider................................................................................................................................... 14
Learn More 15
References ............................................................................................................................................... 15
Related Research..................................................................................................................................... 15
#EIOS05T ©2011 IDC Energy Insights
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LIST OF FIGURES
1 High-Level Architecture of the IT Solution.................................................................................... 5
2 Example of a Business Process Map........................................................................................... 9
3 Schedule for Sprint Deliveries from BPR and BPMS IT Delivery Work Streams.......................... 10
4 IT and Business Change Delivery Timescales for Various Sprint Releases ................................ 10
5 Thames Water Project Impact Assessment ................................................................................. 14
©2011 IDC Energy Insights #EIOS05T
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IN THIS STUDY
This study describes the IT approach taken by Thames Water to
improve the efficiency of its Customer Services business unit in the
light of reduced IT budgets following the economic crisis of
2008–2009. This study reviews the program implemented to review
and reengineer selected business processes and implement a Business
Process Management Suite (BPMS), identifying the company's
objectives, the selection process for identifying the right solution, the
business value of the project, and next steps for the company.
IDC Energy Insights Case Studies Series
The IDC Energy Insights Case Studies Series provides utilities with
fact-based, comparable, consistent, and independent views of
interesting projects implemented across geographies. The focus is on
IT solutions or, more broadly, on energy technology assessments
contributing to sustainability. Collaborating with the utility company
and IT vendor personnel directly involved in the projects, IDC Energy
Insights is able to gather all the relevant information, analyze the
approach, and assess the solutions aimed at meeting organizations'
goals. Case studies are assessed on four criteria, which IDC Energy
Insights believes are critical to generate additional value: contribution
to operational effectiveness, degree of technological innovation,
transformational impact on the company's businesses, and more
broadly, on the utilities industry value chain.
Why This Case Study?
This case study was selected as a demonstration of a Best Practices
approach in the Customer Services unit of one of the major U.K. water
utilities, highlighting the value that can be brought in by BPMS
implementation. Though seen as an interim solution until the
implementation of integrated Billing/CRM software is undertaken, this
case study demonstrates the fast returns that can be made to improve
operations while waiting for long-term plans to be implemented.
SITUATION OVERVIEW
Company O verview
Thames Water is the U.K.'s largest water and wastewater services
company, serving 13.8 million customers across London and the
Thames Valley. Thames Water's Customer Services business unit is
responsible for the management of the bill-to-cash process, from
setting up customer accounts to generating bills and collecting
payments. Thames Water customer services predominantly operate
from the U.K. with support from outsourced service providers
operating in the U.K. and in India.
©2011 IDC Energy Insights #EIOS05T Page 1

Business Needs
In 2008, Thames Water embarked on a strategic drive to implement
SAP across its various business units. Although this is still in Thames
Water's long-term plans, the economic downturn led it to put a hold on
SAP implementation in the Customer Services business unit.
Consequently, Thames Water sought an alternative solution to
maintain and enhance the existing billing and customer management
system in the interim.
Thames Water realized that there were underlying problems affecting
its ability to meet its strategic priorities for its Customer Service
business unit — namely, to improve both customer satisfaction and
operational efficiencies.
Thames Water recognized that "not addressing these problems,
through business process and IT changes, would have further
deteriorated process efficiencies and impacted customer experience."
Key issues identified were:
● A highly fragmented Customer Services IT application landscape
with agents using multiple systems to perform end-to-end business
processes to serve customers
● Limited visibility of individual customers within any single
process due to use of multiple IT systems, meaning that failures or
disconnects within processes cannot be readily identified for
resolution
● A high reliance on manual copying of data between IT systems
leading to a high risk of manual errors that causes additional work
and repeat customer contacts
● Absence of integrated IT system linking Customer Services
processes
Management Challenges
As one of the major water utilities in the U.K., Thames Water is
monitored and regulated by the Water Services Regulation Authority
(OFWAT). Among other roles, OFWAT is responsible for ensuring
that customer services meet certain standards and can impose fines if
companies fail to deliver the expected level of service. In recent years,
Thames Water has ranked low in OFWAT's comparison of customer
satisfaction. Thus, improving standards of customer satisfaction
remains a priority.
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Over the last 10 years, many process changes have been made in
isolation from other processes, which have sometimes resulted in a
disjointed customer experience. The use of advanced IT solutions to
unify and better coordinate customer services operations constitutes an
essential component of any constructive approach to improving
customer experience.
THE BEST PRACTICES
Background and Objectives
Thames Water determined to address the strategic priorities of its
Customer Services, by streamlining its business processes, through a
program of business process reengineering (BPR) and implementation
of an advanced technology–driven Business Process Management
Suite (BPMS). Critically, Thames Water sought to improve customer
satisfaction and operational efficiencies, without compromising its
long-term strategic goals to implement new Billing/CRM software in
the future.
Since SAP was planned for the future, the BPMS solution had to meet
the criteria of quick delivery and fast returns with benefits realized
throughout the year in an incremental way. Additionally, any changes
through BPMS implementation had to be compatible with future SAP
plans and where possible reduce the need for expensive bespoke SAP
solutions in the future to further maximize benefits.
Key objectives were to:
● Create a single interface so that agents performing a task are
presented only with relevant data and do not have to switch
between multiple applications to complete the task.
● Automate, standardize, and optimize many of the processes
performed by Customer Service agents, which are relatively
repetitive and labor intensive to improve efficiency (both in terms
of effectiveness and adherence to standards).
Specific objectives were:
● Model, optimize, and standardize business processes, removing
redundancies in the process steps
● Implement a unified, systems agnostic, browser-based user
interface for contact center staff to execute business processes
● Implement a rule-based decision engine to maximize automation in
rules-centric back-office processes
● Implement workflow management system for collaboration-centric
back-office processes to maximize efficiency and turnaround time
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● Implement enterprise application integration for front-office
processes to provide better access to information, thus enabling
"first-time fix"
● Provide business analytics tool to monitor process status and
effectiveness, enabling active management and continuous
improvement
Solution Description
The BPMS allows process blueprints to be created, documented, and
controlled. A production tool then uses these process blueprints to link
multiple IT systems into a single business process. A reporting tool
provides visibility of all processes and transactions in a consistent
format. A business modeling tool uses actual process flows and
historical information for process scenario modeling.
The Cordys Business Operations Platform (BOP) was used as a BPMS
tool on top of legacy transaction processing systems, including the
billing system (customer information system [CIS]), job management
system (JMS), and customer care and contacts management system
(Merlin) (Figure 1). It was recognized that in some cases, changes to
legacy systems combined with BPMS would be the only practical
solution; therefore, this project also catered for legacy development
alongside BPMS implementation.
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FIGURE 1
High- Level Architecture of the IT Solution
Source: Thames Water, 2011
Selecting the System Integrator
Thames Water selected long-term partner, Wipro, to be the main
systems integrator for the BPR and BPMS implementation program
because:
● As Thames Water's core IT partner, Wipro provides all of Thames
Water's IT infrastructure and application support and had prior
knowledge of Thames Water's system and processes.
● Wipro has had a longstanding relationship with Thames Water,
since September 2000 and has effectively implemented diverse IT
solutions across various business units.
● Additionally, some part of the project could be funded through the
core IT framework agreement between Thames Water and Wipro.
Selecting the SW Product
Several BPM products were evaluated at the presales stage including
Cordys, Mendix, Lombardi, PegaSystems, and Websphere.
©2011 IDC Energy Insights #EIOS05T Page 5

The Cordys BPMS IT tool was selected after Wipro partnered with
Cordys and showcased a proof of concept (POC) to Thames Water.
The Cordys system was selected based on several advantages
identified:
● Enables business processes to be streamlined without a large
capital outlay, providing quick returns
● Provides a means to align current objectives with strategic
transformations being planned in future
● Allows process steps to be automated and automatic rule-based
retrieval of related data from any number of disparate IT systems
● Was considered, within its unique segment, by the client to be one
of the most cost-effective products
Implementing the Solution
The project, which began in June 2010, was completed at the end of
January 2011. Wipro was the main systems integrator in coordination
with the product vendor Cordys. Additionally, various business
process representatives and senior users from Thames Water Customer
Services functions were engaged throughout the program, with agents
encouraged to make suggestions via a dedicated Web site.
There were two primary work streams involved in delivering the
overall scope of this project:
● The Business Process Reengineering (BPR) Stream: Reviewed
business processes, identify improvement areas, and reengineer
processes
● The BPMS IT Delivery Stream: Worked closely alongside the
BPR stream and delivered IT changes to implement reengineered
processes
There was also a third work stream, Business Change, to deliver
business change activities such as communications, training, and
benefits tracking. This involved a Thames Water Business Change
Manager supported by internal change consultants.
The Business Process Reengineering (BPR) Stream
BPR was an ongoing process involving process consultants from
Wipro, representatives from Thames Water Customer Services
outsourced partners and a process leader from Thames Water. This
work stream delivered the "as-is" process map and highlighted
improvement areas. Based on the initial assessment on the potential
and feasibility of improvements, these processes were taken up to be
reengineered. The "to-be" process maps were developed along with
recommendations for change and benefits (Figure 2).
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Several business processes were identified from BPR and
subsequently selected for BPMS implementation. These included;
● High consumption processes (e.g., processes resulting from a
customer querying an unusually high water bill that may be due to
an unnoticed water leak). The end-to-end process involves an agent
at the call center notifying a field agent to perform an onsite
investigation and then the field agent reporting back to customer
services, triggering more processes. BPMS enables management of
the end-to-end process while keeping customers informed.
● Address retrieval. Since Thames Water uses two systems with
different rules (IBM mainframe as core system and a front-end
system that agents use) agents were often unable to retrieve a
customer's address, leading agents to pass the customer onto
another department. BPMS enables agents to retrieve a customer's
address from any system.
● Pending processes. BPMS enables a tracking system for pending
work.
● Single view of the customer. Since many different systems are
used by different business areas, one business area frequently had
no visibility of the customer from the point of view of another
business area. BPMS enables all the information about a customer
to be presented in a single view.
● Processes requiring approval such as escalations, refunds, leak
allowance (bill adjustment for customers who experience a leak),
write on/write off, manual adjustments, previously involved
paperwork, and time to get multiple signatures. BPMS enables
relevant data and attached documents to be emailed to relevant
persons with notification that approval is needed.
● Payment plans. Previously, agents offering payment plans to
customers had to go through each payment plan in sequence,
exiting and reentering the system each time. BPMS enables a
comparison system so all payment plans are compared in one
screen, allowing agents to give all the options to the customer.
● HomeServe (provides home emergency cover). Previously, the
process for getting from agent to HomeServe sales team to making
a sale involved manual tasks and was paper-based. BPMS enables
an automated process for getting from lead to HomeServe sales.
©2011 IDC Energy Insights #EIOS05T Page 7

The BPMS IT Delivery Stream
IT changes were carried out in four stages, referred to as "sprints," of
7–8 weeks each (Figure 3 and 4). Each sprint targeted a different
portfolio of business processes. Sprint 1 mainly targeted small-scale
process improvements and BPR recommendations for high
consumption processes. Sprint 2 focused on improving contact center
processes targeting first-time resolution and reduction in customer call
time. Sprint 3 dealt with automation of the approval process for
financial adjustments, refunds, and leak allowance. Sprint 4 aimed to
systemize manual/excel/access based processes used by the
HomeServe sales team.
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FIGURE 2
Example of a Business Process Map
Source: Thames Water, 2011
©2011 IDC Energy Insights #EIOS05T Page 9

FIGURE 3
Schedule for Sprint D eliveries from BPR and BPMS IT D elivery
W ork S treams
Source: Thames Water, 2011
FIGURE 4
IT and Business Change Delivery Timescales for Various
Sprint Releases
Source: Thames Water, 2011
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Business Value
The BPM changes delivered as part of this project resulted in positive
impact within various business units by improving the transaction
handling time, automation of manual activities, and enabling various
reports/dashboards for timely decision making. These resulted in
business benefits worth close to £1 million annually from:
● Sprint 1: Estimated savings of over 9,600 person hrs per annum
through:
○ Fewer jobs being passed on to the field team (decrease in error
rate)
○ Improved sort facility in office work management application
● Sprint 2: Estimated savings of over 16,000 person hrs per annum
through:
○ Improvements to customer address retrieval screen
○ Reduced average handling time for pending processes by three
minutes
○ Reduced contact volumes (all channels) related to chasing
updates in front-office and back-office work stream
○ Presenting recent topic information
○ Presenting information to agent in single view
● Sprint 3: Estimated savings of over 17,500 person hrs through:
○ Reduced call handling times in payment plan process: 5,764
person hrs per annum
○ Reduced number of two- to three-day work items on diary file
○ Reduced transaction handling time in refunds process
○ Automation of leak allowance process
○ Automation of manual adjustments, write-on and write-off
processes
● Sprint 4: Estimated savings of over 4,800 person hrs through:
○ Time saving of the resources involved in reporting
○ Elimination of paper based work allocation
○ Facility to promote to suitable customers rather than relying
entirely on contact center agents
©2011 IDC Energy Insights #EIOS05T Page 11

The BPMS project has also contributed to the following additional
qualitative benefits:
● Improved customer satisfaction according to Thames Water's own
real-time surveys and OFWAT's independent quarterly surveys.
(OFWAT surveys target customers at random, so it cannot be
determined which customers contacted had experience of
processes involved in this program. However, it is likely that
improvements made in the program detailed here contributed to the
improved score.)
● Reduced complaints and unwanted calls
● Improved employee engagement according to Gallup Q12 survey.
The Gallup Q12 survey covers a broad range of issues, so the
improved score cannot be linked entirely to this program.
However, the score for "tools to carry out job" increased for the
third year in a row.
● Reduced various manual/paper-based processes
● Embedded a BPMS enabling preparation for SAP in the future.
L essons Learned
This program was a mini- to midlevel business transformation serving
as an initial rehearsal for the future large-scale transformation that
Thames Water seeks to embark upon.
An ambitious IT delivery was planned over very short timescales
(seven weeks each) to ensure benefits were realized. Due to the
complexity and number of stakeholders involved, this presented
challenges to overcome to deliver projects according to schedule.
In particular, difficulties were experienced in obtaining sufficient
Thames Water business resources during the deployment stage for user
training and workshops. Additionally, since there were a large number
of changes implemented in a short time period, there were some
challenges to achieve business acceptance.
Overall, the project was considered a success.
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FUTURE OUTLOOK
Next Steps
Thames Water is in the process of implementing various
enhancements to the BPMS based on users' feedback following initial
1–2 months usage of the new IT solution.
At a later stage, there are plans to implement more processes on
BPMS. However, this will be continued at a lower scale since Thames
Water is beginning blueprinting for SAP in the next few months for
implementation in 2013.
The BPMS platform implemented as part of this project will continue
to help Thames Water manage various business processes, which are
primarily managed outside of the core billing and customer
relationship management (CRM) systems. The current BPMS tool also
enables easy integration with existing and future systems.
ESSENTIAL GUIDANCE
Project Impact Assessment
IDC Energy Insights considers that the transformation in business
processes undertaken by Thames Water achieved significant impact in
improving its operational effectiveness with limited capital outlay.
Furthermore, faced with regulatory pressure and the need to improve
its customer satisfaction scores, the benefits realized positively
impacted the company's business transformation and will facilitate the
company's long-term goals.
A summary evaluation is presented in Figure 5.
©2011 IDC Energy Insights #EIOS05T Page 13

FIGURE 5
Thames Water Project Impact Assessment
Source: IDC Energy Insights, 2011
Actions to Consider
Based on Thames Water's experiences the following recommendations
are made:
● Utilities should consider BPMS as a means of improving customer
services operations, leveraging existing systems when funds are
limited.
● Utilities should be aware that BPMS implementation can be
complementary to any future billing/CRM implementation and, in
some cases, can be used to avoid the need for bespoke solutions.
● Before embarking on any business process transformation
program, projects should be properly prioritized in advance, by
consulting all relevant stakeholders and assessing the output of
Business Process Review for scope and impact on business
benefits.
● To realize maximum benefits, BPMS implementation should be
carried out in relatively short cycles. Readiness of various
stakeholders should be assured and proper business change impact,
training, and communications carried out to minimize/avoid delays
in user training.
● If numerous changes are planned, changes should be organized so
that all the changes affecting a particular group of users are made
in one stage, where possible.
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LEARN MORE
References
● Interview with Will Brown, Customer Services Transformation
Program Lead, Thames Water
● www.thameswater.co.uk.
● www.wipro.com
Related Research
To learn more about IT developments in utilities market or other case
studies, please refer to the following IDC Energy Insights documents:
● Best Practices: Veolia Water Transforming Metering — The
m2ocity Innovative Business Model and Oracle Utilities MDM
Deployed by Power Reply (IDC Energy Insights #EIOS04T, May
2011)
● Data Privacy and Security for Smart Metering: Alliander
Certification Case Study (IDC Energy Insights #EIOS52T, March
2011)
● Best Practices: GasTerra Flexes up Its IT Application Portfolio by
Choosing Oracle Utilities Solutions (IDC Energy Insights
#EIOS03S, May 2010)
● Best Practices: Mobile Work Force Management Solution, Enel
Style (IDC Energy Insights #EIOS02S, February 2010)
● Best Practices: Enabling Electric Vehicles in Denmark - The
EDISON Consortium Project (IDC Energy Insights #EIRS02R9,
October 2009)
● Best Practices: Palm Utilities Deploys Oracle Utilities Customer
Care and Billing Solution (IDC Energy Insights #EIOS08R9,
October 2009)
● Best Practices: Bringing Stakeholders Together: The Amsterdam
Smart City Project (IDC Energy Insights #EIOS07R9, October
2009)
● Best Practices: Pioneering Smarter Metering in Gas — The Gas
Natural AMM Project Case Study (IDC Energy Insights
#EIOS06R9, September 2009)
● Iberdrola's Control Center for Renewable Energy (CORE): A
Model for Grid Integration of Renewable Energy (IDC Energy
Insights #EIRS54Q, June 2008)
● Utility Remote Wind Power Management: EdP Bets on Logica's IT
Solution (IDC Energy Insights #EIRS53Q, April 2008)
©2011 IDC Energy Insights #EIOS05T Page 15

Synopsis
In 2008, Thames Water embarked on a journey to refresh its core IT
services in the customer services business unit, with a view to
improving customer satisfaction. Due to financial constraints, the
company turned to a low capital outlay solution, the Cordys Business
Process Management Suite (BPMS), as an interim solution until SAP
could be implemented. Partnering with longtime partner Wipro, which
acted as the systems integrator, an ambitious program was carried out
to review and reengineer several key business processes and
implement BPMS in only eight months. The program resulted in
business benefits worth approximately $1.5 million annually, and
contributed to improvements in customer satisfaction and employee
engagement scores.
"That Thames Water was able realize benefits, in real terms and
qualitatively, within such a short time scale and without compromising
its long-term strategy serves as a demonstration to other utilities of the
potential value of BPMS implementation," said Daniella Muallem,
senior research analyst, IDC Energy Insights EMEA.
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