Ask someone at a municipal utility why a particular process works the way it does, and the most common answer is: ‘It’s always been that way.’
Sometimes there’s a valid reason behind it. Often, however, there isn’t. At some point, someone introduced a rule because there was a problem back then. The problem has long since been solved, but the rule has remained. It has been built upon, supplemented and expanded. Years later, some departments are working on something that nobody questions any more because it works. Somehow.
This ‘somehow’ comes at a cost. Not on the invoice, but in the time staff spend on tasks that add no value. In errors caused by unnecessary complexity. In the frustration of customers whose enquiries pass through too many hands.
Process optimisation in municipal utilities rarely begins with a major overhaul. For municipal utilities and energy suppliers, it begins with the question of which of the processes that have evolved over the years offer the greatest potential for improvement, and with a structured process assessment that weighs up the costs against the benefits.
Why processes are particularly important in municipal utilities
Municipal utilities are not start-ups. They operate in a regulated environment, with public service obligations, scarce resources and customers who have no choice as to whether they need electricity and water, only from whom they obtain it.
This means that every inefficient process costs not only money, but also trust. When it takes three weeks to amend a contract, when a complaint is passed through four departments, or when meter replacements are recorded twice, both customers and staff feel the impact.
At the same time, municipal utilities are under pressure to achieve more with fewer staff. Skilled workers are retiring, and it is difficult to find new recruits. This makes it all the more important that existing staff spend their time on meaningful work rather than on procedures that nobody needs anymore. Why processes are the key lever in this regard is described in Process optimisation in municipal utilities: Why processes are the key to success.
And if you want to design processes with the customer in mind, you first need to know exactly who you are serving. Find out more at Using customer data in municipal utilities: How well do you really know your customers?.
The typical problems with legacy processes in municipal utilities
Most process problems in municipal utilities can be traced back to three causes.
Legacy processes that have never been questioned. A process designed ten years ago for a different system landscape is no longer suitable today. But it still runs; nobody knows why, and everyone is afraid to touch it. The result: workarounds that become standard processes. Data disconnects that nobody even recognises as such anymore. Verification steps that were once justified but now only create extra work. You can read here why this is the case and what can be done about it: Identifying unnecessary processes: Why municipal utilities are guarding garden benches.
Paper and media breaks. In many municipal utilities, information is still printed out, signed, scanned and forwarded by email. Every single step in this chain is a source of error and a time-waster. The solution is rarely a new system, but rather the question: do we even need this step? Read more in Paperless processes in municipal utilities: How to reduce the flood of paper.
Lack of transparency. Many processes are not documented. They exist as tacit knowledge in the minds of individual staff members. If these staff members fall ill or leave the company, that knowledge goes with them. What remains is a process that nobody fully understands anymore.
What makes for good process design
Good processes all share one characteristic: they are as simple as possible. Not oversimplified, not cut short, but thoughtfully simple.
That sounds trivial, but it isn’t. Simplicity in process design requires someone to understand the process from start to finish and be able to justify every single step. From today’s perspective.
An effective test: Can a new employee carry out the process after a brief induction? If the answer is ‘no’, it is rarely the employee’s fault.
There is an example from a completely different industry that illustrates this principle well: What a Japanese rice cooker knows about good processes.
Make or Buy: Off-the-shelf software or in-house development?
Behind every process optimisation, the question eventually arises as to how IT should map the new process. The decision between off-the-shelf software and in-house development is often underestimated.
Off-the-shelf software comes with tried-and-tested processes, but forces you to adapt your own workflows. In-house development maps your own process exactly, but creates dependencies and maintenance costs. Both have their merits. The question is, when is which approach the right one?
Two articles explore this topic in greater depth from different perspectives: Make or Buy: When is in-house development worthwhile for municipal utilities? and Best-of-breed vs. off-the-shelf software: The right IT strategy for municipal utilities.
When process optimisation projects become success stories
When optimisation projects fail, it is rarely down to the technology. They fail because the change does not take root in day-to-day working life. The plan is in place, the software is configured, but in day-to-day operations everyone carries on working as before. Not out of resistance, but because the transition was not properly thought through.
This can be avoided, but not through methods alone. It requires honesty: what do we really want to change? Are we prepared to ask uncomfortable questions? Are we looking for a tailor-made solution to a problem, or do we simply want to use the trendy tool? Read more in Process first, then the tool. And: Are we measuring success, or are we just hoping for it?
Three aspects deserve particular attention.
Measuring success. Anyone optimising processes must know in advance how they will measure success. Not in abstract metrics, but in terms that everyone involved can understand. What happens if the metrics are wrong is described in Using KPIs correctly: Why dashboards can be misleading.
Focus rather than more staff. If a project falls behind schedule, the first instinct is often to expand the team. This rarely speeds up a delayed project and often slows it down, as onboarding and coordination take time. More effective approaches include maintaining focus, a realistic assessment of the scope, and a critical review of the plan’s assumptions. Why more people do not automatically mean faster progress is explained in The Myth of the Man-Month.
Realistic expectations. Not every project will change the world. Sometimes a small step, executed flawlessly, achieves more than an ambitious transformation that gets stuck halfway through. What successful projects have in common is described in Digitalisation project at the municipal utility: How it becomes a success story.
When AI is the right tool – and when it isn’t
Anyone optimising processes will, sooner or later, face the question of whether AI can help. The answer depends less on the technology than on the process itself. A process that requires a single, unambiguously correct answer needs a deterministic system. A process that can cope with variation – such as with text drafts or classifications – can be usefully supported by AI. Read more in A dice or a clockwork mechanism: why AI answers the same question differently. Anyone looking for a broader introduction to the topic will find it at AI in the energy sector.
It is now well established that AI does not run for free. It requires energy and water throughout its entire life cycle: from the manufacture of chips and servers, through the training of models, to every single small task. I explain why choosing the right tool is also sustainable in the article Sustainable AI: The right tool saves resources.
Process assessment: How well do you really know your processes?
The honest answer in most municipal utilities is: not well enough. Not because of negligence, but because, in day-to-day operations, there isn’t enough time to take a step back and look at the bigger picture.
If you want to optimise, you must first understand. Not all processes at once, but systematically: Where are the biggest levers for improvement? Where do processes cause the most effort? Where do errors occur? And: where is it worth using technology, and where is an organisational change sufficient?
Anyone wishing to answer these questions in a structured way will find a methodology for doing so in HOIKEI: evaluate processes, prioritise them and decide where optimisation makes the biggest difference.
Why this question is so difficult to answer in many organisations, and why established methods are of no help here, is described in Which process first? The preliminary question.
If you’d like to find out where your greatest leverage lies, this is a good opportunity to have a chat. In a short demo, I’ll show you how HOIKEI evaluates your processes and where it’s most worthwhile to start.