Investment proposalSpecific Instructions:Please see attached business case to prepare investment proposal. You are allowed to make reasonable assumptions in order to complete the assessment. Use atta

1. Introduction

Our team have been commissioned to prepare a business case evaluating a Web based investment by GasEL. The proposal is to introduce a FAQ page to mitigate the 640K enquiries by phone mostly dealing with customer billing. GasEL are also introducing a change from manual payments over the phone and by cheque in the post to a card payment facility via their website.

2.0 Executive Summary

Our main findings from our analysis were very clear. Staff resources are being under-utilized as a direct result of the unnecessary workload from the present billing system. The primary areas causing stress are:

• Bill enquiries by phone through the call center

• Bill queries by correspondence email/post

• Returned Bills and Refunds

• Payment by card or cheque

These areas are engaging close to half of over-all distribution of time from the customer service team. 21.89% of full time staff are directly engaged in these activities. From our analysis we have recognized that the more profitable sectors of your company such as sales conversion, corporate account management, customer service for corporate clients and arrears management are suffering due to lack of provision. By adopting our recommendations a direct benefit can be seen in year one by immediately reducing your labor costs and immediately increasing efficacy in your more neglected profitable sectors as mentioned above by having available staff to assist.

We looked at a number of different solution options to address these issues from web based investment in card payment facility and introduction of a FAQ web page to restructuring, process simplification and leaving as is by doing nothing. They all have their associated costs but the overall benefits from our direct recommendation by far out way the benefits of any other option. Doing nothing is simply wasteful, inefficient and under-utilizing the available staff as a direct result of implementing our web based expansion.

Our recommendation is to immediately put in place a strategic plan for transition to

• Redirect bill enquiries to the FAQ page on the GasEL website.

• Provide card payment facility on the website to redirect customers wanting to pay over the phone or by post.

The plan will be phased out over a 12 month period to ease transition and minimize loss.

3.0 Reasons.

GazEL is a thriving energy provider with a large and growing customer base. It is a well-established brand with a multi-skilled staff. Presently the company are receiving a high level of calls on the back of a successful TV advertising campaign. On top of this staff are spending a substantial amount of time in both hours and manpower in dealing with bill queries by phone, email and post. Also the payment facility processing is mostly manual so manpower and hours are high in this area as well. Here is a breakdown of those activities in order to see what resources are being used. The following are area’s which are leaching resources in relation to our new proposals.

As billing is recognized as a non-productive activity and considering the huge amount of resources already engaged in it, our proposals of introducing a FAQ section on the website as well facilitating card payment for all major credit cards will substantially free up these resources for other more profitable activities such as corporate and private sales and arrears reduction.

With a total of 640K calls annually this is eating up valuable resources and this alone accounts for over one fifth of over-all distribution of time 21.10%. It also equates to 8.9% of fulltime staff. Presently the company is spending more than half of its over-all time on billing in one form or another and requires 21.83% of fulltime staff to deal with it. With the introduction of our FAQ’s page on the website and card payment facilities will greatly reduce the drain on these two resources allowing for improvement in other areas.

But there are real problems within the company which if not addressed will also grow at a parallel rate and will ultimately undermine any new changes being brought in.

There is a fantastic opportunity at hand for GasEL to make substantial savings with minimum effort allowing the company to focus on other more profitable activities and improve internal management.

4.0 Options

In this section we have outlined the advantages and disadvantages of various options relating to bill queries and payment options. We have also outlined our recommended option and the steps necessary to put it in place.

1. Invest in Web based FAQ and View Bill and Pay Bill facilities Option

1. Simplify the procedures around the handling of customer queries and manual card payments.

1. Set up two specialist teams in the Service Centre to deal with Customer Queries and Card Payments.

1. Doing Nothing. This means that GasEl management will continue to allow customers to contact the Service Centre for general query information and processing card payments by phone.

4.1 Invest in Web based FAQ and View Bill and Pay Bill facilities Option

Advantages

• Huge savings to be made by automation

• Frees up staff for deployment in other more profitable sectors such as sales, corporate service account management and arrears.

• Keeps up with competitors use of digital

• Implementation costs will be minimized by taking advantage of already in place website

• Using a digital solution will open the eyes of management and present other opportunities for automation

• Improved customer service by more efficient disposal of information and no queued waiting on the phone.

• Good for customer service and branding as digitalization of services is expected by up and coming generation of customers.

• Paperless billing is the norm

• Online payments are very secure

Disadvantages

• Phased Implementation will be required

• There may be some initial fall out. We know from our initial investigation that there are only 400 new direct debits set up annually which means over 95% of customers are paying over the phone or by post. So by introducing a new payment system will inevitably cause some fall out.

• Customer security at risk by handling customer details online

• Process simplification will be necessary before automation

• Market research will be necessary for understanding the key pain areas for customers when paying a bill so as to make the process user friendly

• The FAQ page will also require substantial research on finding the main “bill enquiry” obstacle that customers are calling about. So if its bill itemization that’s the most common query well then a “view Bill” section will be necessary. A proper requirement specification will have to be put in place.

4.2 Simplify the procedures around the handling of customer queries and manual card payments.

Advantages

• Implementation costs for IVR are low, quotation of €12000

• Talking to real person in order to clarify an issue is always preferred

• Simplification still ensures that customers can make calls

• Simplification still ensures that customers can make payments

• Little or no disruption to present procedures

• Some savings to be made by this approach

• There will still have to be some answering facility in place no matter what option is chosen so simplification could be integrated

• Prerecorded information in regards to billing could be provided via phone options

Disadvantages

• Simplification is difficult as the customer activity process remains the same particularly for payments.

• Has not addressed properly the real issue of huge resources going into the area of billing

• The amount of savings in terms of manpower and time is not realistic to initiate this option as call volumes are still high and mostly relate to bill enquiries. Apart from giving a bill total or amount due on the account from IVR it is not addressing the key issues of billing enquiries which are itemized billing information,

• May backfire in disgruntled customers feeling neglected by not having the same level of service

4.3 Set up two specialist teams in the Service Centre to deal with Customer Queries and Card Payments.

Advantages

• Refinement and streamlining of staff resources by having dedicated teams lifts moral

• Some improvement on staff resources

• Still allows calls for bill enquiries meaning no disruption to present protocols

• Still allows payment s over the phone meaning no disruption

Disadvantages

• Will still require manpower and resources meaning that other areas will still suffer such as sales, customer service for corporate accounts and arrears.

• Restructuring as an option is failing to recognize imminent savings in comparison to our proposed option.

• Set up two specialist teams in the Service Centre to deal with Customer Queries and Card Payments.

• Not taking advantage of digital presence via company website by remaining to make such a minor change

• Teams will need constant expansion as company grows

4.4 Do Nothing Option

Advantages

• Customers will continue to receive a personalized service from the Service Centre Staff rather than been referred to the Web for these services

• There will be no disruption of the customer base arising from having to register for Web based services

• Allows management and staff to continue with current routine and plans

• No investment of time, effort or money required on behalf of management

• Does not expose management to any potential project failure and resultant fallout

• Avoids exposing company to the substantial risk of Credit Card hacking

Disadvantages

• Handling customer enquiries and card payments will continue to absorb significant resources in the Service Centre (estimated at 48% of time and just over €1ml p.a.)

• Increases pressure on management to increase resources to service growing customer base

• Management fail to leverage substantial investment already made in the establishment of GasEl Website

• Customers using the existing Web services may try to revert to contact through the Service Centre thereby losing efficiencies already achieved through use of web technology.

• Poor performance in Sales Conversion, Corporate Service and Arrears Management likely to continue as servicing continues to have ‘first call’ on available resources

• Fall further behind competitors who are successfully utilizing digital technology

• Company poorly positioned to exploit changing demographics when younger ‘tech savy’customers become buyers in the energy market

Our Recommended Option

Invest in Web based FAQ and View Bill and Pay Bill facilities Option

With just over half of over-all distribution of time 51.8% being spent on billing in one form or another is simply not sustainable. Sixty four thousand enquiries coming into the call center annually mostly relating to bill enquiries is a huge drain on resources and as the company gets bigger this percentage will also increase creating further inefficacies.

GasEL already has a website in place so adding these new facilities of a FAQ page and card payment are relatively easy and straight forward. The addition of these two facilities will create savings by directly reducing the huge amount of resources necessary to maintain the present set up.

A proper requirements specification doc will be created for both of the web based facilities. This will outline in detail what information is necessary in order create the best customer experience when using these facilities. We will involve all stakeholders in gathering the correct requirements. Acceptance criteria will be put in place. Transition of process will be phased in stages to ease customers into the new system.

To summarize there is huge savings to be made both directly and indirectly. By not having to engage more than half your staff in “Billing”, increases your workforce by 50% at no extra cost apart from the initial set up costs. Even this is somewhat minimized by already having a website in place. Freeing up staff to focus on more profitable sectors such as corporate sales, corporate service account management and arrears will increase revenue. Digitalization of processes is expected as an industry standard both internally and also by the consumer. It offers better access of information and customer service eradicating the frustrating wait in line for your call to be answered. This initiation by the company also creates the possibility of using digital solutions in other areas such as paperless billing, sales tracking and auditing (Salesforce), customer apps for billing or energy saving tips to improve service.

5.0 Benefits

Tangible

• Labor Cost reduced in this sector – presently there are 21.8% fulltime staff involved in billing. This will be reduced greatly with automation of payments and the FAQ’s dealing with bill enquiries. Assuming that 4 fulltime staff will remain to deal with refunds and queries this would equate to a saving of €676,400 annually.

• Redeployment of 17.8% staff to more profitable activities such as corporate sales and arrears management. With arrears alone totaling €35 million, extra staff to deal with this backlog will be very welcome.

• Increase in sales conversion as newly freed up staff are available

• Increase in customer satisfaction as easier access of information such as viewing itemized bill.

• Reduction in Auditing as online payments more accurate

• Lowers cost of document management

• Google analytics provides accurate data of how many customers are using the system

Intangible

• Proof to management that Digitalization is a possible solution for increased efficacy in other areas

• Lifts moral within company by reducing workload of incoming calls by redirection to FAQ and card payment.

• Improves leadership profile by reducing workload on staff members and increasing efficacy.

• Opens the door to further digital possibilities such as paperless billing, sales tracking and auditing, billing and energy savings app for customers, advertising opportunities.

• May increase the uptake of Direct Debit

6.0 Assumptions

• That most billing enquiries are about itemized billing information

• If only 400 new DD’s are set up each year that would imply that all other payments are made though the call center

• That the service team staff earn €38000 annually

• That four fulltime staff will remain within billing to handle customer enquiries, arrear payments and refunds after the new services are rolled out.

• The new services will be rolled out in phases to ease transition

• There will be an annual cost of €140,000 website maintenance fees directly relating to the new web based services.

• That 21.8% staff are engaged in billing in form or another.

• The there is an 12 month project lifecycle

• That a year’s contract is given to a project manager

7.0 Risk Assessment

Risk Description

Probability

Impact

score

Recommended Mitigation

Automation

Type

unlikely

Major

6

1.

All stakeholders

will

be

Risk

identified and engaged in

FAQ

requirements

gathering

process

Customers

not

2.

Requirements

happy

with

specification

will

require

information

approval from Senior User

provided

for billing

representing

User

enquiries

on

the

Community

FAQ

section

resulting

in

3.

Acceptance criteria will be

undiminished

call

clearly

defined

and

volumes

–

thus

agreed

with

user

slowing down phase

community

out

4.

Formal

Change

Control

Procedures will apply.

5.

Monitored

weekly

by

service manager

Project Type Risk

unlikely

Moderate

5

Project

implementation

distracts

key

resources from day

to day activities

Transition Phase

Likely

Major

8

1.

Daily monitoring by

Transition

phase

service manager

will cause some fall

2.

Prepared phase out

out and arrears

plan in place

3.

Information

packs

included with bills

4.

Service

employees

notify

customers

still calling

5.

Incentives

put

in

place

FAQ

Unlikely

Major

6

1. Full time IT staff in place to

FAQ web pages not

maintain web page

kept

up

to date

2.

Monthly Reporting and

thereby

reducing

review to

customer

service

Customer usage.

Manger

3. Good communication with

sales

and

marketing

departments weekly

Card

Payment

Likely

Major

1.

Daily

monitoring

by

Facility

service manager

Risk of losing older

2. Website Video tutorial on

customers

due to

how to pay bill online

security concerns or

3.

Proper

evaluation

of

lack

of automation

and computer skills

customer

preference

when

paying

(cheque

or

by post) so as new

payment information and

phase out can be correctly

tailored

4.

Personal

assistance

by

phone in phase out stages

5.

Creating

awareness

of

online

secure

payments

through

advertising

Campaigns.

6.

Incentivize

to

make

the

change with competitions

prize

Inadequate

Unlikely

Major

6

1.

Proper

evaluation

of

Training provided

customer habits so as to

for phasing in new

correctly

address

key

system

areas

of

pain

when

phasing

2.

Management

team

in

place for phase in /out

with weekly reporting

3.

Incentivize

staff for

extra

effort

needed

for

implementation

8.0 Estimated Costs, Tasks and Timescales

High Level Tasks

• Employ Business Analyst 2 weeks

• Assign dedicated management team for full project (all phases) 2 weeks

• Prepare Requirement Specification document for FAQ design and FAQ page implementation. – 3 weeks

• Prepare requirement spec for card payment facility - 4 weeks

• IT team in place for Direct implementation and execution - 4 weeks ( 1 coder /1 designer)

• Prepare and execute phase out plan of old system - 6 months

• Prepare and execute phase in plan of new system – 6 months

• Plan advertising and marketing campaign for introduction of new system – 4 weeks

• Implements advertising and marketing campaign - 3 months

• Prepare staff training programs for new system across all departments - 2 weeks

Tasks which may involve a direct cost.

• Advertising and marketing campaign - High cost - €150000

• Staff bonuses and incentive costs - Medium cost - €40000

• Contract for IT and design team responsible - High cost - €70000

• Training provider contract 2 weeks - low cost - €3000

• Staff redundancy x 4 - High costs - €200000

• Fulltime web maintenance staff x 2 - high cost - €140000

• Contingency - low cost - €20000

9. Investment Appraisal

(Investment in a capital project can only be justified if the additional benefits exceed the costs of the investment. Investment appraisal can be conducted with reference to the impact of a new project/solution on reported profits or on cash flows.

Please note that any costs already incurred (sunk costs) should be ignored when completing the appraisal. The idea is to focus on justifying additional spend as there is nothing that can be done about the money already spent.

There are various methods used to complete a financial appraisal. The main ones are as follows:

• Benefit/Cost Ratio: Here you take the total benefits and total costs and show these as a ratio. >1 indicates a positive ratio. The period over which benefits are calculated must be specified and consistent e.g. 1 year, 3 years. For example, if total costs are €100k and total benefits are €125k, then the Benefit Cost Ratio is 1.25.

• Accounting Rate of Return: This is normally calculated as the average annual profit you expect over the life of an investment project, compared to the average amount of capital invested. For example, if a project requires an average investment of €100k and is expected to generate an average annual profit of €15k, then the ARR would be 15%.

• Payback Period: This is a technique for calculating the period of time required for a project investment to break even i.e. at what point will the investment start paying for itself. For example, if a project requiring an investment of €100k is expected to provide annual cash flow of €25k, the payback period would be 4 years.

• Discounting Future Cash flow and Sensitivity Analysis not required for assignment.

• The benefits figures should be taken from the Benefits (See Section 5) and the costs from the Estimated Costs & Timescales Section (Section 8).  The cost benefit should be presented in the following Table.)

1. Revision History

APPENDIX A

Administrator. (2017). BUSINESS CASE TEMPLATE. Retrieved 3 November, 2017, from /project-initiation-templates/business-case.html

Feeney, J. N. (2010). The Road Out of Debt+ Website: Bankruptcy and Other Solutions to Your Financial Problems. John Wiley & Sons.

Hansen, D., Mowen, M., & Guan, L. (2007). Cost management: accounting and control. Cengage Learning.

Timmers, P. (1998). Business models for electronic markets. Electronic markets, 8(2), 3-8.