Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

The Ultimate CEOs: C. John Wilder, TXU Corp.

The CEO Power Forum: Not all utility CEOs are created equal...

Fortnightly Magazine - June 2005

to get through, or the customer service agent isn't friendly, or it takes 45 seconds to 60 seconds to answer the phone? Where does a customer go? Nowhere. It's a monopoly. We don't enjoy that here. We have to fight for every customer that we have. So, we had to transform our back office to be a competitive weapon for our consumer retail business. The way you transform a back office is through technology. We aren't good, we weren't good, and are not still that good at how to really employ technologies to provide better service to your customer. So, we needed a technology partner. We actually examined doing it on our own. What if we get a big technology implementation plan? We go through and try to refresh all of our technologies in a way that they are more customer services orientated to make us more productive. We thought the execution risk of that was just too high. It was much better to shift that execution risk over to a professional business processing outsourcer and a technology implementer. Let them absorb that risk. We would get the benefit of that risk transfer through lower contract. It lowered our operating expenses by about $200 million per year. So, it almost took 40 percent of our operating costs out of the back office and this is the real bonus, and dramatically improved the service to our customers. So, this is no way to look at that business transformation as anything other than a stunning success.

Fortnightly How do you benchmark Capgemini's performance to manage the effectiveness of your relationship?

Wilder Before we started that venture, we had a half-a-dozen measures across all of our back office. Today we have about 350 measures of which about 125 measures Capgemini actually gets paid on. Our measures range from customer service satisfaction to error rate on bills, to our collection periods on our accounts receivable, to our internal transaction inter-speed for our employees calling to find out the balance of the 401K account … just a wide variety of performance metrics that we monitor and work with Capgemini Energy and monitor on a monthly, weekly, and daily basis, and they actually get their compensation based on both the employees as well as the compensation for Cap Gemini Energy [the entity managing TXU's BPO]. … The contract is set for 10 years.

Fortnightly In the last year, TXU had been considering the novel step of outsourcing its energy trading and risk-management function to investment bank Credit Suisse First Boston. What made TXU change its mind? What did you hope to save, and what were the risks?

Wilder We still like the idea. It is kind of a good idea. … It was really a kind of competition for commodity trading talent. We were going into the [deal] to try to upgrade our management capability in that area. We thought a venture with a financial services partner would give us the right cache in the marketplace to attract and retain high-quality talent, because fundamentally commodity trading is a