RESOLVING THE BILLING CRISIS

Transcription

1 RESOLVING THE BILLING CRISIS 1

2 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

3 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 3

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5 Public Finance Policy Guideline: Principles Do s (Symmetric) Fiscal Discipline: Spending within our means, balanced budget, revenue equalling or exceeding budget Fiscal Consolidation: Aiming for a budget surplus Fiscal Sustainability: Maintaining prudent capital structure Don ts (Asymmetric) Fiscal Expansionism: Increasing spending not informed by availability of resources Fiscal Erosion: Surge in budget deficit Fiscal Cliff: Deficit spending in a climate of reduction in revenues and fiscal erosion 5

6 Evolution Of Public Finance Policy Management Legislation (Normative) Political Leadership Technocracy 6

7 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 7

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9 Problem Definition: Scope Across the City there are pockets of revenue and activities that impact the City s revenue Efforts are not coordinated 9

10 ORIGINAL SITUATION Technical Issues Unresolved Issues Negative Perception Questionable Credibility Problem Definition CURRENT SITUATION Questionable Credibility Questionable Practices High Frequency of Disputes 10

11 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 11

12 City Power & Joburg Water Issues 12

13 Property Unit Issues 13

14 Developmental Planning, Property Unit & PIKITUP Issues 14

15 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 15

16 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 16

17 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 17

18 CUSTOMER ACCOUNTS Forensic audit on customer accounts are on going. System access for individuals who are under investigation has been revoked. Progress to date 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

19 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) 19

20 MOEs Responsibilities Entities Responsibility: Technical Device management 20

21 Policy Amendments Roll Out Prepaid meters on new connection. Account collection leverage using prepaid vending system. 21

22 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 22

23 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 23

24 Approach & Methodology STREAM ❶: ISSUE RESOLUTION DEALING WITH SYMPTOMS STREAM ❷: ROOT CAUSE FOCUS 24

25 Review & Recommend Root Cause Focus Consult & Amend Implement & Review Amend & Entrench 25

26 Benefits Intervention areas Gaps Addressed SUMMARY Property rates Accurate property, asset and customer details Complete billing Accurate invoicing Effective payment process Effective credit management Customer Relationship Management Service charges 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 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 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 Reprioritised 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 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 1. Customer details 5. Revenue accuracy 6. Cash collection and management 7. Credit management 2. Query resolution process 4. Revenue completeness Interdependencies 3. Call Volume Management 90% Completeness of BP information, Deeds interface rejections minimized 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 26

27 THANK YOU 27