Magazine article Government Finance Review

The City of Salina, Kansas, Switches to an Interactive Voice Response System

Magazine article Government Finance Review

The City of Salina, Kansas, Switches to an Interactive Voice Response System

Article excerpt

Much of the staff time in any utility billing office is spent answering routine inquiries regarding customer accounts - "How much do I owe?"" When did I last make a payment on my acco\mt?n"Can I have a payment extension?" These questions occupy a lot of staff time, as does dealing with telephoned credit card payments and delinquent account collections.

The City of Salina, Kansas (population 47,000), was no different. With 20,000 customers, total utility customer accounting staff telephone time hovered in the range of 150 to 200 hours per month, and that was growing as more customers were electing to use the convenience of the credit card and telephone to pay their bills, in addition to requesting extensions or making other inquiries about their accounts.

Collecting from delinquent customers was another major activity. Typically, the city sent out final notices to about 3,300 customers per month. These provided approximately seven days to pay. Finally, as a last ditch effort, on the day before utilities were due to be terminated, staff would go to each delinquent customer's location and try to collect the amount due in person. Typically this meant visiting about 1,000 customers per month, requiring about 4-5 man hours every workday. This effort was intensive, but it resulted in good collection ratios, with only slightly more than 200 locations per month ultimately being disconnected.

The increasing intensity of the office environment was affecting morale and, as a result, productivity and the level of customer service decreased. Staff also began reporting a level of discomfort with customer contacts in the field during the delinquent collections activity. While no staff members had been assaulted or openly threatened, there had been a number of "discomforting" situations, and the feeling was that it was only a matter of time before a serious event would occur and the safety of the employee would be compromised.


A number of alternatives were considered to address these issues. Ideas included:

* implementing an online payment system via the Internet

* limiting or eliminating the use of credit and debit cards

* implementing an interactive telephone system that would allow customers to access their accounts

* eliminating the field collections practice

After considerable research, the City of Salina chose to implement an interactive voice response (IVR) system to take payments, and to substitute that systems capabilities for the field collections. Even though the $85,000 cost was daunting, a present value analysis of the costs, compared to the anticipated financial benefits, indicated a payback period of 25 months, in addition, the system offered a number of intangible but valuable benefits (e.g., increased employee safety, increased customer privacy, reduced customer exposure to identity theft, and customer convenience).

The first concept considered was Internet access, but the IVR system was ultimately selected for a number of reasons. Customers were already accustomed to calling the department telephone number, so routing their calls into the new IVR system would not involve making them consciously change their behavior. And while the use of computers and availability of Internet access is widespread, telephones are even more ubiquitous. Also, the IVR system selected had the capacity to allow customers to request and receive payment extensions, based on rules set by the city, without staff intervention.The Internet systems reviewed did not have this capability. The IVR system selected could also do outbound calling for delinquency processing, an important issue for the city and a capacity the Internet systems available at the time also didn't have. In addition, the IVR system selected had very tight integration with the customer accounting software used by the City of Salina, and, while Internet transactions are reasafe, automated telephone transactions are more so. …

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