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Printer Friendly VersionSelected Information - Completed Research

CP434  SIM - Understanding the impact of interventions Business Planning
Project Appreciation and Objectives

For financial year 2010/11 Ofwat has been collecting data in support of its Service Incentive Mechanism (SIM). The financial penalties are not being applied until the end of 2011/12. From this date the amount companies can charge customers can vary + 0.5 % or -1% a year based on the number of unwanted customer contacts and a customer satisfaction survey.

Many companies believe that they receive a significant number of customer contacts as a result of their own operational interventions. Understanding the relationship between types of operational interventions and the volume of associated customer contacts will enable the impact of operational activities on the SIM score to be taken into account as part of the investment planning process.

Discussions with companies have revealed that although the relationship is suspected there is limited hard data to support changes to investment or operational strategies.

This project will develop a standard method that estimates the number of contacts expected as a result of different types of operational interventions. These figures will allow the SIM benefits and risks to be quantified in business planning activities. The project outputs will allow companies to consider strategies in terms in SIM scores by considering alternatives to existing operational and investment activities.

Benefits to Clients

  • Use of a standard method, calibrated within the industry, to quantify the impact of operational interventions on customer contacts and consequently the SIM score.
  • Use of a standard method, calibrated within the industry, to quantify the impact of capital planning activities on customer contacts and consequently the SIM score.
  • Provides the ability to take into account the effect on the customer of operational and investment activities.

Work Programme

  1. Following an initial liaison group meeting, collect intervention and customer contact details from companies - these will be stored securely at WRc.
  2. Develop a draft method and present at a second liaison meeting.
  3. Develop and test on all provided data a first version of a method.
  4. Compare results across participants and highlight significant differences and, where discernable, identify the impact of different operational processes.

Project Output

  • A standard method to calculate the expected contacts based on interventions.
  • A company tailored report identifying variances with other participants and an outline of the cause of the variance.
  • A template database.

Related WRc Work

  • DOMS, Service Area Ranking Model. CP322, 2008.
  • Individual client work for major UK water providers. 2007 - 2008
WRc's Portfolio Programme
Summary of the £1.5 million per annum research programme

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