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Case Study: Scottish Power Debt Manager Enhancement Programme
This study describes Arum’s engagement with ScottishPower 2006-7. The Debt Manager Enhancement Programme (DMEP) followed the Debt Manager Upgrade Project, the subject of a separate case study. DMEP established responsibility for development and support of Debt Manager within the ScottishPower Energy Retail Credit Systems team. The major DMEP deliverables were process development and implementation, creating standards for and building development and test environments and a series of DM enhancements.
The Challenge
The Debt Manager Upgrade to Version 6.03 in 2004-6 positioned ScottishPower to exploit the capabilities of new functionality within Debt Manager and make business driven enhancements to the existing processes. In order to achieve this DMEP was to deliver a structured, procedure driven environment allowing enhancements to be designed and delivered within the business team – enabling ScottishPower with the knowledge and tools to drive change ‘in-house’. DMEP was to simultaneously introduce a new culture of ongoing business improvement/change by delivering a number of enhancements to Debt Manager to improve the collections performance, reduce bad debt and help achieve a level of internal capability in line with benchmarked best practice.
The Outcome
The project lasted 12 months with enhancements delivered throughout the year. The project completed to time and within budget and to the planned scope. Business satisfaction resulted in excellent feedback on the benefit gained from the enhancements and acclaim for the processes and procedures delivered. The support team structure is viewed as a best practice model within ScottishPower Sandy Duckett, Head of Credit Management within ScottishPower Energy Retail was delighted with the result, in particular Arum’s ability to put their Debt Manager knowledge into practice:
“Arum’s commitment to and alignment with our objectives was key in to allowing DMEP to deliver all its aims. Arum’s team provided us with the independent expertise that we did not possess in house and have enabled us to build our internal capabilities at rate far above that which would have been possible without them whilst also delivering change that has led to improvements in cash collections. I would not hesitate to use Arum again should the need arise.”
How did we achieve this successful outcome?
By understanding our customer’s business and working closely with the ScottishPower team at all stages of the project. Our indepth knowledge of the Debt Manager product and previous experience and knowledge of ScottishPower contributed to the success of the Debt Management Enhancement Programme. Establishing a strong working relationship with the Business and IT was fundamental to the success and timely implementation of the project deliverables.
THE PROJECT
Organisation Background
ScottishPower is an international energy company, made up of four businesses: Energy Retail, Energy Wholesale and Energy Networks in the UK and PPM Energy in the US. The group provides electricity, transmission and distribution services; supplies electricity and gas services; and operates electricity generation and gas storage facilities.
ScottishPower Energy Retail is the gas and electricity supply company and holder of the group’s supply licences. It manages pricing, selling, billing and receipting for gas and electricity supply to both business and domestic customers and deals with enquiries arising in the course of this business. The group has over 5.2m customers in the UK.
ScottishPower collects domestic and small business debts using Debt Manager. It has 1.9 million records in the application, with just under 1,000 users of the main application and with up to 3,000 call centre users able to access a limited range of functions via an interface with the main call centre application. A Genesys dialler conducts outbound dialling, a number of Management Information (MI) tools are used and there is additionally a connection to a high volume printing solution.
Project Background
ScottishPower Energy Retail’s cash collection function is called Customer Collections. In 2004 Customer Collections set itself the target key objective ‘to be best in class credit management organisation’ and completed a programme of work in 2006 that created the conditions to allow this aim to be realised. The Debt Manager Upgrade that was completed in May 2006 was the key technology workstream within the programme. Once it was complete ScottishPower had a set of collections applications capable of supporting the business objectives and plans going forward.
The Upgraded Debt Manager offered ScottishPower the opportunity to configure the system to suit changing operational, regulatory and performance needs. The solution decided upon was to create a DM support and change team owned by the business, located within Customer Collections that would improve design through better communication, greatly reduce reliance on third parties, reduce timescales and reduce costs. Such a structure would ensure that planned enhancements would more adequately meet the evolving requirements of Customer Collections.
Project Aims
The aims of DMEP were to:
- Deliver Debt Manager enhancements in a “Business As Usual” environment
- Prioritise business enhancement requests through a Business Review Board
- Deliver system changes that enabled ‘Best in Class’ Collections activity
- Create a change control environment within Customer Collections
- Implement a governance structure
- Develop and implement quality control processes (including operational acceptance and Sarbanes Oxley compliance )
- Identify and secure permanent resource
- Source and implement tools
Project Outline
Building on experience gained in the DM upgrade process, ScottishPower decided to utilise a combination of existing internal and Arum capability to build up knowledge of system design, development, implementation and control. They recognised the need for firm project management in particular to coordinate the various strands of the project, retain the focus with the conflicting demands of ongoing business and keep on budget and time. It therefore made sense to retain the core of the team that had successfully delivered the upgrade.
The project outputs were:
- Business benefit - a timely series enhancements to Debt Manager and supporting systems
- ‘Best practice DM support’ - implement the development environments and processes to support the system.
Project Challenges
Significant challenges included:
- Definition and creation of the additional development and testing environments
- Definition and creation of business, design, development and testing control processes
- Definition creation, and implementation of Operational Acceptance criteria to allow changes into the Production Environment
- Management of third party IT supplier where the scope of DM application was significantly changing
- Managing business expectations – in particular, the type and pace of change most practical
Arum Role
ScottishPower recognised the value of a Project Manager experienced in Debt Manager and ScottishPower processes and policies. Arum Systems were in a position to provide such a Project Manager for the duration of the project (who had previously been the Implementation Project Manager on the DM Upgrade project) and were also able to provide experienced DM consultants to design and develop cost effective solutions to functional requirements within the Debt Manager product.
Arum’s Project Manager and consultants managed the ScottishPower project from design and planning phases through to implementations, managing input from Fair Isaac, ScottishPower’s third party service providers and all ScottishPower personnel working on the team.
Arum’s tasks included:
- Business case development,
- Project Planning
- Budget control
- Debt Manager design and development
- Process design and implementation
- Business readiness planning
- Implementation planning
Arum’s independence, previous experience of working with Debt Manager and Fair Isaac in particular gave rise to key risk mitigation actions being put in place proactively at planning and contract stages.
Project Outcome
The project completed in 12 months on schedule. Arum took ownership of both the Project Management and Debt Manager development and ensured that the framework for best practice was established and in use This approach ensured all aspects were considered; costs were under effectively.
All deliverables from the original project scope were delivered and, not surprisingly, this resulted excellent feedback from the business. There was also a net in-year cash collection benefit from the changes implemented of 400% over project costs.
Arum services have been retained by ScottishPower and we are involved in key aspects of their Debt Manager application design and development. ScottishPower continue to consult Arum on best practice collections activities.