Business Practice Evaluations
A Business Practice Evaluation (BPE) is a process that assesses the health of a utility’s business practices with the goal of minimizing the total cost of managing, operating, and maintaining utility assets while delivering exceptional service to customers. This is accomplished by assessing all business practices, identifying opportunities for improvement, and implementing a framework for a structured approach to managing, operating, and maintaining a utility in the same manner as a profitable business, where focus is placed on management of resources, employee engagement, operational efficiency, and customer service. The BPE process was developed as an operational form of asset management to foster more efficient financial and physical resource investments, and to prolong the life of infrastructure system assets. Asset management offers the potential to pay for itself over the long-term while serving as a plan for making changes to the utility’s operational processes in an effort to meet new environmental regulations, financial reporting requirements, and fiscal responsibility from utility stakeholders.
A BPE is completed through a series interviews, field observations, and workshops,. Interviews are generally conducted within a diagonal slice of utility staff including managers and supervisors responsible for the various operation and maintenance activities and support services staff covering the three facets of an organization: administration, operation and maintenance, and engineering. The BPE process identifies opportunities for improvement that will allow a utility to operate at a more effective and sometimes profitable level. This can be accomplished through the implementation of several tasks including data review, interviews, field observations of business practices (not people) and workshops, that result in the development of a clearly defined set of operational and managerial goals. For example, the administration review may identify the lack of a succession plan, which would precipitate a recommendation to establish an in-house planning committee to identify needs, set goals, and form a plan with a timetable.
The finished product will provide a utility with a clear understanding of baseline history and areas of opportunity for improvement. In addition, the utility will have a matrix of recommendations for each business practice they want to improve, along with the risk and consequence of inaction. Organizations that have conducted a BPE significantly improve the operational efficiency of their utility, and the evaluation typically pays for itself in well under a year.
A successful BPE is accomplished utilizing the following steps:
- Develop rating criteria to determine level of performance of business practices
- Develop business practice categories and attributes
- Conduct kick-off, consensus, and findings workshops
- Review utility documents and documentation of business practices
- Conduct interviews within a diagonal slice of the organization
- Conduct field observations of current business practices (not people)
- Develop a BPE findings report
- Develop a BPE scoresheet from the findings report