Waternet increases employee productivity by 20 to 30% thanks to Dynamics AX

Time-consuming procedures, a merger and divergent data sources are just three reasons why the old SAP system no longer met the demands Waternet places on its water billing processes. A standard package such as Microsoft Dynamics AX appears to offer a much better fit with Waternet’s non-standard and constantly evolving business processes.

Organization

Waternet originated from the merger of two companies, the Amsterdam Water Authority and the communal sewerage DWR. Waternet is now the common water authority for Amstel, Gooi, Vecht and the city of Amsterdam and is also the first company in the Netherlands oriented towards the entire water cycle from drinking water to waste water. As an executive organization, Waternet is responsible throughout its designated area for:

• production and supply of drinking water (in some 20 communes)
• sewerage and cleaning of canals (City of Amsterdam)
• waste water treatment
• clean surface water
• flood protection
• maintenance of correct water levels in rivers, lakes, canals and locks
• ensuring waterways remain navigable

Outsourcing ERP/CRM is costly

Until recently, Waternet had been outsourcing its ERP/CRM activities around customer contacts and billing to PWN, the North Holland water authority. According to Kiki Quist of Waternet, “This was not only a fairly costly solution, the activities were also considered too business-critical to outsource. We wanted to move to an in-house IT environment with a lower TCO.”

That not only meant new hardware but also different software because the SAP packages in use at the time (SAP/CRM and SAP/ISU, the vertical SAP applications for utility companies) did not quite fit the bill. Kiki Quist: “Even though ‘water billing’ sounds simple, our business processes are definitely not simple or straightforward. For example, we have to deal with a lot of transfers, such as in the case of changes of address: customers who move house first had to be removed from the SAP system and subsequently re-registered at the new address. The primary actions involved with that were incredibly labour intensive with the old system. You had to wrestle through seven to nine different SAP/ISU screens.”

Schedule of Requirements

Kiki Quist: “Other things that are not easily solved with a standard billing application include our complicated discount rules, bills with and without meter readings, bills that need to be sent to a broker or agent and other exceptions, meter readings that have to be taken once a year or once a month, etc.”

The schedule of requirements, in other words, was a weighty affair, the upshot being that the new ERP/CRM package had to support the business processes around water billing completely, efficiently and cost-effectively, while also being capable of reading data from external data sources.

Challenge for IT partner

Waternet put the job out to tender and received four responses. Kiki Quist: “Two were based on SAP and the third (from Getronics) was an adapted version of an even older proprietary ERP package. The fourth stood out as the most financially advantageous and came from Ferranti Computer Systems NV. This Microsoft Certified Partner’s solution was based on Microsoft Dynamics AX. Kiki Quist: “Ferranti had made a TCO calculation which showed that our IT costs over the next five years would be considerably lower than the current cost of outsourcing. And that is an attractive proposition for any organization.”

However, as the cost is not the only important element behind an informed decision, Waternet requested a proof of concept from the two pre-selected suppliers Ferranti and Getronics. Both parties were given one month to develop two important business processes. Kiki Quist: “The change of address, of course, and a process where someone called about a bill for a resident who had already left and who therefore requests a retroactively corrected bill. With our old system, it was not possible to address such matters on the telephone, seeing as they took a good half hour to resolve.”

Roel Derks from Ferranti: “Ferranti has developed an add-on for Microsoft Dynamics AX especially for utility companies called ‘Mecoms’. Mecoms is a direct competitor of SAP/ISA and supports all the processes and entities relevant, among others, to the water market. In addition, the Mecoms/Dynamics AX combination is very flexible and easily adaptable to closely fit the customer’s processes.

As a result, we were able to reduce the change of address process, for which Waternet previously had to navigate through seven or more screens in SAP/ISU, to just two screens. We also found an elegant solution for the matter of the caller: the call desk assistant can now generate a retroactively corrected bill while the customer is on the line. On the basis of these two cases, we were able to clearly demonstrate that the productivity of Waternet employees would take a massive leap forward.”

Although Ferranti submitted a successful proof of concept, it was not enough to convince the decision-makers and key users at Waternet.

Link with external systems

Kiki Quist: “In the framework of new developments in the water market, such as the total water memorandum, we aim to produce a single collective memorandum on drinking water, refuse water and ground and surface water. The relevant data is available but on different systems. The merged companies which together form Waternet each come with their own processes, which means different data formats. The new ERP environment needs to be able to communicate with each of them. With the future in mind, it is also important to choose an environment which can communicate seamlessly with external data sources.”

Roel Derks from Ferranti: “Microsoft Dynamics AX belongs to the same family of total software solutions as Microsoft BizTalk Server. BizTalk Server enables seamless links between applications and a wide range of databases. Among other things we use text files at Waternet which are converted to XML format for the various applications. That is done in real time and in the background without our users noticing. That can be realized very quickly with BizTalk. We have made a similar link for bank transactions, which means Waternet is also SEPA ready (Single Euro Payment Area).”

Roel Derks about the results of the other supplier: “Our competitor Getronics’ solution was based on an already existing package, albeit one which was partly modernized by way of further development. However, when it comes to flexibility and cooperation with other packages and data sources, the Dynamics platform and Mecoms prove their superiority.”

Kiki Quist: “The successful proof of concept and seamless link with external data sources were the main reasons behind our decision for Ferranti and Microsoft Dynamics AX.”

Development

Roel Derks: “Mecoms is a standard utility billing system and an add-on for Dynamics AX. It can be integrated within many of our clients’ systems. Nevertheless, certain adjustments are always needed to ensure the ERP solution is perfectly aligned with the processes to which the client is accustomed. For Waternet, for example, we put a lot of time into the design before we began to build the solution.”

There were only two people from Waternet charged with supervising the project. Although a large team can slow a project down, Roel found a team of two to be too small: “There is a risk there, for example that you overlook certain things, but fortunately that was not the case here. After some eight months, we succeeded together in delivering a more than satisfactory end result.”

Solution

All drinking water bills for residents of Amsterdam are now produced with the new ERP system. The product processes some 400 000 drinking water deliveries and contains details of around 300 000 customers. Kiki Quist: “One of the nice things about the new system is that you can immediately implement a transfer during the first line contact with the customer. Employees no longer have to switch to a back office type environment or send information to another department or colleague. There is a clear shift in activities because departments and employees can now do a lot more on their own and work around 20% faster. That translates into a considerable improvement in productivity. I expect we will be able to free up a number of FTEs to work on other core activities.”

Roel Derks: “Thanks to Dynamics AX’s user-friendly, intuitive and easily customizable user interface, Waternet’s employees now have access to a tool which helps them carry out their tasks quickly and at a higher level.”

Kiki Quist: “And ‘quickly’ is the right word because the learning curve is short. The old SAP/ISU system had so many cryptic structures that it always took three to four weeks before you could learn to work with it. The new Dynamics environment is so intuitive that you can already start working with it within one week. Training costs for new front and back office employees are also a lot lower.”

Advantages

The solution implemented is not only user-friendly for the end users but also for managers. The ERP package is easy to integrate with other Microsoft products, the TCO is considerably lower than the original SAP/ISU environment, the levels of customization required are limited and the speed of development is high.

Roel Derks: “A lot of the Dynamics platform’s business value for Waternet relates to its integration with BizTalk Server. The latter enables the integration of all kinds of external data sources in Dynamics AX, without employees having to make conversion tables or run conversion programmes.”

Kiki Quist: “We used to work a lot with paper transfers. Now everything is processed in real time by the AX application. That is an extremely valuable piece of added value.”

With regards to managing the new environment, Kiki Quist says, “Although it is difficult to compare with the outsourced environment, I can say that the number of people involved in IT management has been reduced by 50%. That is a considerable cost saving which helps shorten the breakeven point of the investment. We are yet to work out the exact figures but given the increase in efficiency and the considerable time and cost savings, we expect to see a rapid ROI and low TCO.”

The future

On Waternet’s plans for the future, Kiki Quist: “What we want to achieve is a situation where all customer information – in other words billing, complaints, telephone calls, e-mails, letters and other forms of contact – are all accessible via one application. So our employees have all information at hand whenever a customer approaches us. We are also thinking about billing via e-mail, the online input of meter readings, an internet tool where customers can consult statistics about their consumption rates and savings, report problems, etc. That is the way we want to go. It is all possible with Dynamics AX, but we will take it one step at a time. With the water billing, which has been operational since the beginning of this year, we have taken the first step. The next step will be water levies but we first want to see improvements in performance. If 100 employees use the same system at the same time, your server park has to be up to the task. We are therefore currently considering transferring the databases to a data warehouse with virtual cubes based on SQL Server. That should speed up our reporting processes.”

Another component of Waternet’s Schedule of Requirements relates to the implementation of a good CRM tool. Kiki Quist: “Originally, we worked with SAP/CRM, but the features we used already come as standard in Dynamics AX. Microsoft Dynamics CRM could therefore be a suitable tool for the more specific information required by our account managers at the Marketing department.”

Conclusion

Summing up, Kiki Quist says: “Dynamics AX and Mecoms have provided us with a flexible ERP system that offers good support for our business processes. Because our processes are subject to constant change, it is good to know that our ERP system can be quickly adapted to keep up with those changes. As a result, we can serve our customers better while the cost to serve is reduced.

Our users work with a very intuitive and user-friendly interface, which offers them the possibility to carry out most tasks independently; they no longer have to refer things to a colleague. That also gives our employees a greater sense of satisfaction and for the organization that translates into clear gains in productivity. We are therefore very happy with the solution realized by Ferranti.”