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Larry Foster: Practical Insights for Optimizing Operational Transformation in the Utility Industry [Part One]

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Larry Foster: Practical Insights for Optimizing Operational Transformation in the Utility Industry [Part One]

Larry Foster, President of MuniBilling, has been working with technology for over 25 years. He's experienced in different sectors of technology, from starting new projects to helping companies grow and overcome challenges.

With a focus on the software and utility industries, Larry is a leading expert specializing in the complete lifecycle management of advanced solutions. Under his leadership, MuniBilling ensures dedicated client success teams and an unwavering commitment to ongoing support and efficiency improvements in the dynamic utility and software landscapes.

Q: Most in the utility space have some passing familiarity with Lean concepts, but we may think it’s best suited for manufacturing or software development. How do you think Lean thinking applies to municipal and multifamily utility service providers as a potential framework for transformation? 

A business embracing a Lean mindset focuses on maximizing value while eliminating waste and delivering optimized value to its customers. That sounds like a perfect fit for municipal or multifamily utility service providers.
Lean in practice involves understanding how people are doing things and finding ways to make them more efficient by studying the people who do the tasks and learning how they can be more efficient in customer service. 

Organizations that embrace a Lean mindset emphasize the importance of respecting and involving people at all levels in delivering their services or creating their goods. These organizations recognize that employees are valuable contributors to continuous improvement and encourage their active participation, input, and suggestions.

For municipal or multi-family utility providers, who often need to work with shoestring budgets or must be concerned with making more with less, Lean is a perfect way to create efficiencies that save or make money for the organizations involved. 

Q: Couldn’t I use that definition to describe the purpose of every business, not just municipal and multifamily utility service providers focused on digital transformations?

You could! I agree that many businesses aspire to achieve those objectives. Unfortunately, too many organizations equate eliminating waste to merely focusing on cost reduction, which then often involves purchasing new technology to automate their processes or eliminating people’s jobs. That’s where I’ve seen most organizations fail to achieve their intended outcomes. 

Paraphrasing the late great Edward Demming: 

Organizations that focus on improving quality will automatically reduce costs.

Whereas organizations that focus on reducing costs will automatically reduce quality and increase costs.

To achieve successful digital transformations, municipal and multifamily utility service providers must embrace the principles, methods, and philosophies of a Lean culture to achieve and sustain the intended outcomes, independent of the new technologies they implement; they cannot just focus on reducing costs. Cost reduction becomes a byproduct, not the primary objective. 

Q: How do Lean concepts apply to municipal and multifamily utility service providers achieving successful digital transformations?

I wish I could produce a checklist that says to do this, then that, and you’ll be "Lean,” but it’s much more nuanced. 

It is crucial to recognize that digital transformation failures often result from technical, organizational, and cultural challenges. Focusing on those core areas is essential to ensuring you can transform your organization as you intend.
Leaders of municipal and multifamily service providers must also seek out an ecosystem of partners that embrace the same values and concepts since they depend highly on multiple partners to deliver their services. 

They say experience comes from learning from your failures. I’ve gained a lot of experience in the technology industry over the past thirty-five years. 

By sharing my experiences and observations, I believe that I can help the leaders of municipal and multifamily utility service providers understand the underlying causes and contribute to helping them improve their strategies and approaches to leading their digital transformation initiatives.

Q: What would you say is the most crucial concept leaders of municipal and multifamily utility service providers must understand as they embark on their digital transformations?

Cultural transformations do not occur overnight…so get ready to invest for the long haul. I’ve also found that change cannot be dictated from a top-down approach. 

Leaders play an integral role in championing the culture change, but it’s up to the team to implement it. Leaders must articulate a vision and strategy that is clearly understood; they must seek input and feedback and actively involve employees at all levels; they must communicate the reasons for the culture change and the expected outcomes from the digital transformations. 

Understanding why something is being done will give every organization member a universal benchmark to measure success. That will significantly increase the likelihood that the transformation will take place. 

To begin, approaching digital transformations with a Lean mindset requires organizations to embrace the five Lean principles as part of their culture. The five principles of Lean are:

  1. Define value.
  2. Map out their value streams.
  3. Create flow.
  4. Establish pull.
  5. Continuous improvement

Q: At the core, every business must provide value to the world. In the Utility Space, the value could appear a little more arbitrary since everyone must have running water, electricity, etc. How do you communicate the value that utilities provide to the world?

  1. The definition of value in Lean must embody three characteristics.
  2. The outcome must create a positive transformation for the “stakeholder.”
  3. It must be done right the first time.
  4. Stakeholders must be able to qualify and quantify the intrinsic value.

That definition of value is very similar to the improvement philosophy of Edward Demming that we talked about earlier. There are so many dimensions to the value municipal and multifamily utility service providers deliver to their customers, but it all starts with a keen understanding of who your stakeholders are or who you are seeking to provide value for

The reference to a stakeholder may represent the utility customer, an employee, a shareholder, or a taxpayer, but each may recognize your company’s value differently, and that’s okay. They are each getting something different out of what you are creating.

One dimension of improving value and eliminating waste may be providing customers with real-time insights into their bill history or monitoring the consumption of their metered utilities. 

Or it may be providing anywhere, anytime access to manage payments on-demand or schedule autopayments to prevent unwanted late fee charges, resolve a billing dispute, inquire about a rate or service option, or communicate in real-time with customers and field technicians to complete a service request.

After a digital transformation, your value may change how customers receive notifications about their bills, payments, rate changes, or outages through text, email, or voice. The value for the stakeholders is all about putting those change agents in.

Many of these transformations are underpinned by digital assets such as a Customer Portal, a mobile application, or a multimode communications system. 

Technology is a facilitator, yet its intrinsic value is realized only when aligned with strategic goals of continuous improvement and effectively integrated into processes. It is crucial to recognize that the mere presence of technology does not inherently enhance value; instead, it is the thoughtful application and seamless integration of technology within a strategic framework that drives meaningful improvements.

Q: What does value stream mapping involve now that we understand the value and the desire for digital transformation? How do you start understanding and documenting the importance of municipal and multifamily utility service providers?

Mapping out a value stream is crucial in identifying, analyzing, and improving the processes that deliver value to customers. 

A value stream is just the end-to-end series of activities and processes the service provider uses to provide each type of service to a utility customer. It represents the entire lifecycle, from the initial customer request to the provisioning of the service and the customer receiving the bill. 

A value stream map must consider both the physical flow of materials and the flow of information accompanying each service throughout the entire value chain. 

For municipal and multifamily utility service providers, a value stream map encompasses the lifecycle from processing the service request, to scheduling, and activating services; gathering and providing insights into usage data from meters; creating, packaging, and distributing bills; managing payments; processing service orders; and managing disconnects and final invoices, resolving incidents, and mitigating disputes.

Q: That seems like a lot of input from different internal team members to compile and map that customer experience. Are there any tips for jumpstarting the mapping process?

One hundred percent of municipal and multifamily service providers are already doing significant activities to understand customer experiences. More than many other industries, municipal and multifamily service providers must focus on that or they could possibly not exist as utility service providers. 

Unfortunately, many still rely on antiquated, expensive, labor-intensive, and potentially error-prone manual processes that delay when and how utility customers receive value.  

I would expect several levels of success to be achieved from the digital transformations of their value streams. 

Too often, organizations implement digital technologies with a primary focus on cutting costs. They end up substantiating Edward Demming’s hypothesis. Put another way…., they automate the mess they are trying to eliminate.

I have experienced that since Lean focuses on improving quality by eliminating waste, digital transformations guided by its principles capitalize on its simple structure as a guide to enhance value while reducing cost from inefficient processes.

The value stream places a strong emphasis on identifying and delivering customer value. It seeks to streamline processes and eliminate activities that do not directly contribute to value creation as perceived by the customer.  


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Larry Foster, dedicated President of MuniBilling, is committed to delivering cutting-edge Electronic Bill Payment and Presentment services tailored for utility billing. If you're interested in learning more about our product and services, sign up for a personalized demo of the MuniBilling system. 

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