Stadsverwarming Purmerend uses MECOMS to increase service while lowering costs
Stadsverwarming Purmerend provides district heating to the city of Purmerend in North-Holland. Stadsverwarming Purmerend chose MECOMS to insource its front and back office activities and gain back control. MECOMS enabled Stadsverwarming Purmerend to increase customer satisfaction and payment rates while reducing the operational cost by approximately 20%. It also allows Stadsverwarming Purmerend to be more flexible and quickly cope with any future changes.
Stadsverwarming Purmerend (SVP) is the district heating company of Purmerend, a city in North-Holland (The Netherlands). SVP was founded in 1981 as a municipal company and gained independence in 2007. SVP provides heat and hot water to around 24.000 households and 1.000 businesses. Its strategy focuses on sustainability, security of supply, customer satisfaction and an adequate financial return. Key values of SVP are quality, innovation, cooperation and a service-driven approach. SVP has the ambition to become the most sustainable district heating company of The Netherlands within a few years. Therefore SVP developed the currently running program “DH 2.0”. This program consists of three major parts: “Slimnet” which makes the distribution of heat more effectively, “Energy transition” which focuses on setting on new sustainable production facilities and “Purmerend bespaart” which helps our customers to use less energy.
Before the privatization, the municipality of Purmerend had outsourced the front and back office activities to a third party with its own, external, IT platform. The financial accounting was done on the IT systems of the municipality. Under these arrangements, getting insight into business performance was complicated.
Walter Verdonk, Chief Financial Officer of SVP recalls: “The business fundamentals were not right. Our lack of business insight made it difficult to make decisions and adequately control our business. The outsourcing arrangement resulted in subpar credit collection and inadequate customer satisfaction ratings. Moreover, the high cost of outsourcing contributed to an operational loss.“
Furthermore, the Dutch government was preparing a comprehensive new legal framework for district heating which required a flexible approach. Therefore the newly appointed management of SVP decided to insource its front and back-office activities as a first important step to turnaround the company performance.
In 2009, SVP decided to insource these activities and take the reins. SVP would establish its own customer care organization and handle all operational and financial processes itself with a new, integrated IT system. Guided by an external consultancy, SVP created a shortlist of solution providers in early 2009.
Walter Verdonk: “Each provider was allowed to present his solution. In the spring of 2009, after a thorough comparison of providers, we decided to implement Ferranti’s MECOMS product. Key factors in our decision were the impressive track record, mainly the implementation at Essent Heat, and the neat integration of all modules in MECOMS and Microsoft Dynamics AX. And of course a very good fit between our needs and the strengths of MECOMS.“
Implementation was started immediately. MECOMS would be used to handle CRM, billing, credit management, meter reading and meter data management. A new online portal would give customers access to their data. The underlying Microsoft Dynamics AX platform would be used for general ERP processes, such as finance, procurement, stock management and projects.
Walter Verdonk: “The first pilots were demonstrated in June 2009. Meanwhile, the existing data had to be extracted from the third party. A complicated and delicate process which had to be done in a short period of time. Thanks to the dedicated efforts of the staff of Ferranti and SVP all went well and the system could go live as scheduled: the financial processes in January 2010, followed by the utility processes in February 2010.“
Walter Verdonk: “Since we adopted MECOMS, we were able to drastically improve our performance on several fronts. Our call centre, for example, is now located in our main office, together with all other departments. The integration of our activities into one single system has empowered our staff to be more effective and our customer care agents are much more involved with our customers. Customer satisfaction has increased substantially. For example, in 2010 complaints amounted to less than 1% of all customer inquiries. A remarkable result, especially in a go-live year.“
“MECOMS also made our procedures smarter and reduced the distance between us and our customers. For example, the rules for credit management are now very clear and customers can consult their metering and billing data online. Meanwhile, we can differentiate between different kinds of overdue payments and swiftly take the appropriate action for each customer. As a result, the payment rate has gone up significantly.“
Marco Konijn, the assistant controller at SVP, adds: “MECOMS offers us an integrated system to manage and analyse our own data. It enables us to make informed decisions, based on sophisticated statistics. For example, we can combine quantitative data of substations and customer groups to take targeted follow-up actions. This business intelligence enables us to take actions, not only in credit management but also in maintenance and the optimization of our heating network.“
Walter Verdonk: “The flexibility of MECOMS has enabled us to rapidly adapt some of our processes since the new system went live. And last but not least: our costs have gone down by approximately 20%. MECOMS™ has played a crucial role in turning our business operations around. The satisfaction and payment rate of our customers are higher than ever, while our operational costs have gone down significantly. Our company is now well prepared to cope with any future changes.“