ENECO Holding N.V., trading under the name ENECO Energie, is one of the largest suppliers of gas, electricity and heat in the Netherlands, generating revenues of more than 4.2 billion (2006). Based in Rotterdam, the company operates five autonomous divisions, each serving separate market sectors.
The business landscape changed dramatically for ENECO with the deregulation of the Dutch energy sector in July 2004. For the first time, we had to operate as a private-sector company with market competition.
The market deregulation created impetus for management to adopt a retention-based customer strategy and execute organizational reforms. It illustrated the need for us to obtain a complete picture of our customers, along with an early warning system to show which customers were at risk of switching suppliers. Incomplete customer profiling and insufficient insight into processes had created different versions of the truth, an inability to monitor the performance of outsourced processes and a need to combine data and benchmarking processes between the Rotterdam and Utrecht operations.
We were also challenged by multiple legacy systems and temporary applications with reams of associated data, little of which could be used to provide management insight into the business.
We adapted our focus from simply delivering energy to delivering profit, based on knowing our customers better than the competition. This customer-intimacy mission was driven by a balanced scorecard methodology and Cognos performance management software.
Cognos performance management solution was selected as the best overall solution to meet our needs for a complete range of integrated, scalable software for performance management. Integration with SQL Server in an HP environment, a Siemens transaction environment and a custom billing system based on Oracle was imperative.
Cross-functional communications are driven through vehicles including a monthly management report, BI portal with a company strategy map and monthly business review meetings to align key stakeholders on company strategy.
We measured success by analyzing our ability to precisely target customers and drive strategy through consistent information-based marketing and related decision-making. By more precisely segmenting customers, we are able to target campaigns with offers, products or pricing to specific groups. For example, rather than a general mailing of 2 million pieces, we can mail an offer to the 150,000 customers we know will be most interested.
Our information-based company strategy, articulated through scorecard metrics, lets departments determine and negotiate the necessary trade-offs in the best interests of the customer and overall company objectives.
The technology platform selected and performance management philosophy implemented allows us to take input from every aspect of our business and use it to determine each customers energy needs. This helps us drive performance across the organization on a daily basis to better serve our customers, reduce customer turnover and provide decision-makers with a view of the business that integrates core processes and increases visibility to key operational and financial metrics while saving money.
Our advice for others implementing a similar solution? Set up a business intelligence (BI) or performance management competency center as a foundation for regular input and deliver focused and regular communications to all cross-functional stakeholders. Our performance management approach generated significant impact in many areas. We are now able to optimize processes to focus on doing the right things for the right customer. We now have a consistent set of performance information, which lets users easily access the information they need, provide an integral view of the customer and allow for easy creation of customer value segmentation, scorecards and customer profiles. Key gains include:
- Decreased accounts receivable balance by approximately 10 million.
- Raised conversion rates on marketing campaigns from 10 percent to nearly 65 percent.
- Used the insights gained on customers to segment direct mailings for a savings of approximately 1 million overall or 1 per piece.
- Gained higher process efficiencies in our customer contact center and billing department, resulting in a savings of approximately 2.5 million.
- Ability to segment customers according to their value and needs for improved decision-making and efficiency gains.
- Benefits in the areas of compliance and risk avoidance. New pilot projects and successful deployments demonstrate the economic penalties of poor decisions and indecision.
Cognos 8 Business Intelligence delivers the complete range of BI capabilities: reporting, analysis, scorecarding, dashboards, business event management and data integration, on a single, proven architecture. To further enable faster and more effective decisions, Cognos offers additional consumer modes (Office, Mobile, Search) that bring BI to the familiar working environments of every worker.
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