CenterPoint turns numbers into dollars
Advanced analytics have become a game changer for utilities, transforming the old paradigm of customer engagement, meter reading and grid optimization. In addition to all that, analytics are poised to help utilities better manage their finances and keep tabs on how money is being spent -- and how it could be better spent.
At Utility Analytics Week, CenterPoint Energy illustrated how it is using analytics to optimize the business side of its utility operations.
Sweat the small stuff
One of the biggest areas of impact is employee management, especially customer service call center staffers.
"There really wasn't a rhyme or reason to how we were doing things," said Eliza Castillo, a business analyst at CenterPoint Energy. Now, the utility is tracking its call center hours and overtime, and measuring the efficiency of customer relations operations.
The biggest key to implementing this change in culture was getting involvement and buy-in from the highest executive levels, the utility said.
"The biggest factor is that the VP was a part of all of this," CenterPoint Database Forecaster Todd Langhoff said. "It came from the top down. It didn't go from the bottom up."
In 2012, CenterPoint projects savings due to improved analytics and reporting will reach $6.7 million, up from $5.1 million in 2011.
CenterPoint's hardest-hitting expenses were third parties, which drained the bottom line through an excess of overtime, a lack of accountability and low understanding about how long and how best to train agents. Thankfully -- for the utility and its ratepayers -- that all changed with the introduction of new analytics tools.
"Before, it was all about how many calls and how many minutes we were spending on them," Castillo said. "Now we are also managing to a financial plan."
Using a capacity plan model and tying all the financials to their volume and call data allowed the utility to begin running a series of "what if" scenarios to pinpoint staffing needs and determine financial impacts of various personnel decisions.
Turning data into dollars
Castillo noted that this became especially beneficial this year, as warm weather caused higher demand. CenterPoint predicts that new technology will allow it to save $1.5 million in 2012 simply by reductions in third-party spending and more than $700,000 by reducing overtime expenses, down from more than $1 million. Overall, reporting and analytics led to $5.1 million in spending reductions. For 2012, savings are projected to be even greater -- reaching $6.7 million.
"By not having this data available quickly to run those 'what if' scenarios, we wouldn't have been able to make really good decisions," said Chad Andree, CenterPoint Manager of Workforce Management and Performance Management Reporting.
Going forward, CenterPoint is aiming to use data to illustrate and visualize business operations inside the utility. To that end, CenterPoint has implemented a director scorecard report, which records key performance indicators to track progress. All standard CenterPoint reports include a glossary i to make sure everyone can understand and process the various data metrics.
"We've been able to reduce our expenses because of our reports, because of the fact that we now have something that we can show everybody from the agent to the supervisor to the manager to the director to the VP," Castillo said. "Everybody is held accountable and they trust the data."