Description
Management in all business and organizational activities is the act of coordinating the efforts of people to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
Revenue Management
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
BIGEN AFRICA’S
REVENUE MANAGEMENT CAPABILITY STATEMENT
Municipalities in South Africa face a growing demand for improved performance through efficient service delivery and better infrastructure development. Sustained support to the indigent can also not be neglected – even as maximising revenue has become increasingly challenging. Issues of sustainability, financial viability and access to basic services such as water, sanitation and electricity need urgent attention. Areas of expertise: Our areas of expertise cover a holistic approach to revenue management in municipalities. This includes, amongst others, credit The ability of municipalities to maximise revenue and develop infrastructure are often adversely affected by: • • • • • • inefficient day-to-day processes; insufficient knowledge of the indigent reality; inadequate technology; a lack of data integrity; unreliable and time consuming manual processes; inconsistent credit control and debt collection measures; • • a culture of non-payment; and a lack of capacity and skills. The BIGEN AFRICA revenue management team has access to a network of professionals who provide knowledge and expertise to support the execution of specialised projects. control, debt collection, indigent management, data integrity, policies and by-laws and other institutional issues. The team is headed by Wallie Louw, with management consisting of Elton Simelane, Sewes Fourie, Hercules Dreyer, Danie Erasmus, Leanne Naidoo, Ali Kemp and Grant Bradbury.
» The BIGEN AFRICA Revenue Management Team
The team has the experience, capability and expertise to provide clients with professional services in all municipal revenue related aspects.
Pag age 3
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
» Responsible Revenue Management
Municipalities are legally mandated and morally bound to manage and enhance revenue to ensure their financial and economic stability. Generally, this results from: • maximising income to through proper revenue management, covering all departments; • • improving revenue collection to guarantee cash flow; ensure effective functioning of systems, processes and procedures; • enhancing monthly income by instilling a habit of regular payment, and • creating an environment conducive to sustainable development, growth and service delivery.
Numerous revenue management assessments of municipalities by our Revenue Management team have indicated that while many believe that their revenue management is adequate, efforts in this regard are often isolated and sporadic.
To address this, we adopt a holistic approach to revenue management. Our revenue enhancement value chain and related functions set out a sequential flow of key elements and interdependencies to assist municipalities to effectively and sustainably manage revenue with which to develop infrastructure and deliver services. The diagram below reflects the full value chain of our Revenue Management model.
Revenue Management Value Chain Process Improvement
Legal and Institutional Service Departments Meter Installations
Customer Care
Data Management
Revenue Management
Indigent Management Meter Readings
Debt Management Receipt Management
Billing
Credit Control
Cash flow and budget management
Goals
KPIs
KPIs
KPIs
KPIs
KPIs
Monitoring and evaluation Project and Programme Management
Pag age 4
T r a i n i n g / C a p a c i t a t i o n
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
» Our services
• Municipal policies, by-laws and legislative framework reviews and updates; • Consumer data reviews and assistance with data integrity; • • • • Indigent management and surveys; Billing process review; Receipt management; Credit control, including electricity cuts and water restrictions; • • • • • Debt collection, including the complete legal process; Cash flow and budget evaluations; Customer care programmes; Awareness campaigns; Monitoring and evaluation. •
Systems Act) with municipal staff trained by the BIGEN AFRICA team to implement the system. Transparent planning through regular meetings by a steering committee (consisting of Municipal, Council and BIGEN AFRICA representatives) and joint decisionmaking on debt collection and credit control, thus creating a habit of regular payment in the community.
» BIGEN AFRICA Consulting Services
Upon appointment: • investigates municipal policies and bylaws to establish best practice for debt collection and credit control; • analyses databases and billing systems used by Municipalities to determine the quality and integrity of financial data and the accuracy of consumer and indigent information – both sets of data are vitally important should any legal action ensue; • implements credit control processes through electricity cuts and water restrictions to prevent debt escalating
In addition to these services BIGEN AFRICA assists municipalities to develop and action procedures and processes that create a mutually beneficial payment culture which improves the regular payment of municipal accounts.
BIGEN AFRICA provides municipalities with a long term sustainable solution developed and implemented within a proposed three-year appointment term. This includes creating in-house capacity for municipalities to effectively continue implementing and monitoring their revenue management processes.
•
implements debt collection processes including all the legal steps;
•
assists Municipalities with awareness campaigns in areas where a non-payment culture exists to enhance regular payment from the entire revenue base; and
•
implements an indigent management process in the ZMS Toolkit that supports and complements the awareness campaign.
» The BIGEN AFRICA proposal
This is based on four principles: • A joint effort in working with Municipalities to create one team with one message. • Strategy design with the municipality to design a custom-made revenue collection and management strategy that includes data purification. • A dedicated system installed (as required by the Pag age 5
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
» The ZMS Toolkit
This unique, comprehensive and advanced revenue management system is probably the only one developed specifically for municipalities in South Africa. The processes include: • • • Telephone, SMS and/or letter reminders Electricity cuts and water restrictions Legal processes - final demands, summonses, judgements, warrant of execution and sale in execution; • • Indigent management; Account query management as required by the Municipal Finance Management Act (MFMA); and • Electronic storage and retrieval of consumer service level agreements. It utilises imaging and workflow software with electronic documentation storage and immediate retrieval capabilities. The system also provides full dashboard control with snapshot information and a full range of management information reports. •
and securing private sector financing for major water infrastructure developments. Extensive remedial work was done in Ndlambe to increase revenue and create financial viability to satisfy outside financiers. Revenue management, credit control and debt collection services, through ZMS Management Solutions, to municipalities in George, Newcastle, Matlosana, Naledi, Makhado, Hibiscus Coast, Umtshezi and Umkhanyakude.
Decrease in debtors at one of our sites
R 150 000 000
R 103 000 000
R 97 000 000
160 000 000 140 000 000 120 000 000 100 000 000 80 000 000 60 000 000 40 000 000 20 000 000 0
Sep-00 Dec-04 Dec-06 May-07
» Our track record
The extensive experience and significant expertise of our Revenue Management team have successfully provided numerous municipalities with financial administration and viability assessments, and credit control and debt collection services. Recent projects include: • Financial administration and revenue collection assessments for the Lepelle-Nkumpi, Aganang, Blouberg, and Molemole Local Municipalities in the Capricorn district in South Africa; • Financial viability assessments for Ndlambe, GaSegonyana, Overstrand, Kouga/Koukama and Ilembe Municipalities. The focus of this DWAF/dplg projects was on providing communities with free basic water
» Success history of Bigen Africa Revenue Management initiatives
ZMS Management Solutions (a full subsidiary of BIGEN AFRICA ) has been successful at numerous municipalities. The successes at three municipalities where an integrated credit control and cost recovery approach was followed are discussed below:
Makhado Local Municipality ZMS has been involved in Makhado since Nov 2007 and has made a huge impact on the outstanding debt. A large number of accounts with queries have been resolved and payments for the balances were made. A phased
Pag age 6
R 84 000 000
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
approach was adopted and in the areas where ZMS was involved, the debt decreased from R9,940,777 in Nov 2007 to R4,300,000 in November 2009 (57%). The number of accounts in these areas that were imported into our revenue management system has also drastically reduced, indicating that consumers pay on a more regular basis.
reduced to R0 within 2 years. Additionally, R25 million of service charges were identified which were not billed previously due to identification of non-existent meters. The average payment rate at George Municipality increased to 105% for the year, April 2005 to March 2006.
» References
Newcastle Local Municipality We were appointed in 2004. The municipality's billing increased from R21 million in March 2004 to R23 million in July 2005. During the same period the payments has improved from R16 million (76%) to R22 million (96%). In addition, during the same period, the total arrears outstanding was reduced from R190 million to R152 million.
Matlosana Municipality Makhado Municipality Mr Kevin Weitsz. Manager:Income Mr Reuben Radzilani, Head: Income Tel 018 406 8406 Newcastle Local Municipality Mr M. Mayisela. CFO Mrs. J Muir. Dep. CFO Tel 034 328 7737 Tel 034 328-7763 George Municipality Mr Moos Cupido. Manager Finance Tel 044 801 9111
Tel 015 519 3057
At the same time we assisted with indigent registration which increased from 3,000 to 18,000. Payments in former townships increased from 2% to 70% in three years. The municipality started investing again for the first time in 3 years and they also realised an improved cash flow of R35 million.
Overstrand Local Municipality Hibiscus Coast Municipality Capricorn District Municipality
Mr Werner Zybrands. MM Willie Kunz, Act CFO Lerato Tswane, Former CFO Mr Jordan Maja. Former Act CFO, now CFO Bela Bela
082 561 6625 Tel 039 312 8302 084 605 6215 Tel 014-736 8002 082 569 8867
George Local Municipality In the George municipality the working capital provision ratio to non-payment amounted to R33 million and was
» Contact us
Contact persons Wallie Louw Tel: +27 (0)12 842 8700 Fax: +27 (0)12 843 9000/I Email: [email protected] Elton Simelane Tel: +27 (0)12 842 8700 Fax: +27 (0)12 843 9000/I Email: [email protected]
Physical address Allan Cormack Street, off Hotel Street, cnr Meiring Naudé Road, The Innovation Hub 0087, Pretoria. Postal address P O Box 29,The Innovation Hub 0087, Pretoria, South Africa Website www.bigenafrica.com
Pag age 7
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
Pag age 8
doc_324633686.pdf
Management in all business and organizational activities is the act of coordinating the efforts of people to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
Revenue Management
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
BIGEN AFRICA’S
REVENUE MANAGEMENT CAPABILITY STATEMENT
Municipalities in South Africa face a growing demand for improved performance through efficient service delivery and better infrastructure development. Sustained support to the indigent can also not be neglected – even as maximising revenue has become increasingly challenging. Issues of sustainability, financial viability and access to basic services such as water, sanitation and electricity need urgent attention. Areas of expertise: Our areas of expertise cover a holistic approach to revenue management in municipalities. This includes, amongst others, credit The ability of municipalities to maximise revenue and develop infrastructure are often adversely affected by: • • • • • • inefficient day-to-day processes; insufficient knowledge of the indigent reality; inadequate technology; a lack of data integrity; unreliable and time consuming manual processes; inconsistent credit control and debt collection measures; • • a culture of non-payment; and a lack of capacity and skills. The BIGEN AFRICA revenue management team has access to a network of professionals who provide knowledge and expertise to support the execution of specialised projects. control, debt collection, indigent management, data integrity, policies and by-laws and other institutional issues. The team is headed by Wallie Louw, with management consisting of Elton Simelane, Sewes Fourie, Hercules Dreyer, Danie Erasmus, Leanne Naidoo, Ali Kemp and Grant Bradbury.
» The BIGEN AFRICA Revenue Management Team
The team has the experience, capability and expertise to provide clients with professional services in all municipal revenue related aspects.
Pag age 3
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
» Responsible Revenue Management
Municipalities are legally mandated and morally bound to manage and enhance revenue to ensure their financial and economic stability. Generally, this results from: • maximising income to through proper revenue management, covering all departments; • • improving revenue collection to guarantee cash flow; ensure effective functioning of systems, processes and procedures; • enhancing monthly income by instilling a habit of regular payment, and • creating an environment conducive to sustainable development, growth and service delivery.
Numerous revenue management assessments of municipalities by our Revenue Management team have indicated that while many believe that their revenue management is adequate, efforts in this regard are often isolated and sporadic.
To address this, we adopt a holistic approach to revenue management. Our revenue enhancement value chain and related functions set out a sequential flow of key elements and interdependencies to assist municipalities to effectively and sustainably manage revenue with which to develop infrastructure and deliver services. The diagram below reflects the full value chain of our Revenue Management model.
Revenue Management Value Chain Process Improvement
Legal and Institutional Service Departments Meter Installations
Customer Care
Data Management
Revenue Management
Indigent Management Meter Readings
Debt Management Receipt Management
Billing
Credit Control
Cash flow and budget management
Goals
KPIs
KPIs
KPIs
KPIs
KPIs
Monitoring and evaluation Project and Programme Management
Pag age 4
T r a i n i n g / C a p a c i t a t i o n
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
» Our services
• Municipal policies, by-laws and legislative framework reviews and updates; • Consumer data reviews and assistance with data integrity; • • • • Indigent management and surveys; Billing process review; Receipt management; Credit control, including electricity cuts and water restrictions; • • • • • Debt collection, including the complete legal process; Cash flow and budget evaluations; Customer care programmes; Awareness campaigns; Monitoring and evaluation. •
Systems Act) with municipal staff trained by the BIGEN AFRICA team to implement the system. Transparent planning through regular meetings by a steering committee (consisting of Municipal, Council and BIGEN AFRICA representatives) and joint decisionmaking on debt collection and credit control, thus creating a habit of regular payment in the community.
» BIGEN AFRICA Consulting Services
Upon appointment: • investigates municipal policies and bylaws to establish best practice for debt collection and credit control; • analyses databases and billing systems used by Municipalities to determine the quality and integrity of financial data and the accuracy of consumer and indigent information – both sets of data are vitally important should any legal action ensue; • implements credit control processes through electricity cuts and water restrictions to prevent debt escalating
In addition to these services BIGEN AFRICA assists municipalities to develop and action procedures and processes that create a mutually beneficial payment culture which improves the regular payment of municipal accounts.
BIGEN AFRICA provides municipalities with a long term sustainable solution developed and implemented within a proposed three-year appointment term. This includes creating in-house capacity for municipalities to effectively continue implementing and monitoring their revenue management processes.
•
implements debt collection processes including all the legal steps;
•
assists Municipalities with awareness campaigns in areas where a non-payment culture exists to enhance regular payment from the entire revenue base; and
•
implements an indigent management process in the ZMS Toolkit that supports and complements the awareness campaign.
» The BIGEN AFRICA proposal
This is based on four principles: • A joint effort in working with Municipalities to create one team with one message. • Strategy design with the municipality to design a custom-made revenue collection and management strategy that includes data purification. • A dedicated system installed (as required by the Pag age 5
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
» The ZMS Toolkit
This unique, comprehensive and advanced revenue management system is probably the only one developed specifically for municipalities in South Africa. The processes include: • • • Telephone, SMS and/or letter reminders Electricity cuts and water restrictions Legal processes - final demands, summonses, judgements, warrant of execution and sale in execution; • • Indigent management; Account query management as required by the Municipal Finance Management Act (MFMA); and • Electronic storage and retrieval of consumer service level agreements. It utilises imaging and workflow software with electronic documentation storage and immediate retrieval capabilities. The system also provides full dashboard control with snapshot information and a full range of management information reports. •
and securing private sector financing for major water infrastructure developments. Extensive remedial work was done in Ndlambe to increase revenue and create financial viability to satisfy outside financiers. Revenue management, credit control and debt collection services, through ZMS Management Solutions, to municipalities in George, Newcastle, Matlosana, Naledi, Makhado, Hibiscus Coast, Umtshezi and Umkhanyakude.
Decrease in debtors at one of our sites
R 150 000 000
R 103 000 000
R 97 000 000
160 000 000 140 000 000 120 000 000 100 000 000 80 000 000 60 000 000 40 000 000 20 000 000 0
Sep-00 Dec-04 Dec-06 May-07
» Our track record
The extensive experience and significant expertise of our Revenue Management team have successfully provided numerous municipalities with financial administration and viability assessments, and credit control and debt collection services. Recent projects include: • Financial administration and revenue collection assessments for the Lepelle-Nkumpi, Aganang, Blouberg, and Molemole Local Municipalities in the Capricorn district in South Africa; • Financial viability assessments for Ndlambe, GaSegonyana, Overstrand, Kouga/Koukama and Ilembe Municipalities. The focus of this DWAF/dplg projects was on providing communities with free basic water
» Success history of Bigen Africa Revenue Management initiatives
ZMS Management Solutions (a full subsidiary of BIGEN AFRICA ) has been successful at numerous municipalities. The successes at three municipalities where an integrated credit control and cost recovery approach was followed are discussed below:
Makhado Local Municipality ZMS has been involved in Makhado since Nov 2007 and has made a huge impact on the outstanding debt. A large number of accounts with queries have been resolved and payments for the balances were made. A phased
Pag age 6
R 84 000 000
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
approach was adopted and in the areas where ZMS was involved, the debt decreased from R9,940,777 in Nov 2007 to R4,300,000 in November 2009 (57%). The number of accounts in these areas that were imported into our revenue management system has also drastically reduced, indicating that consumers pay on a more regular basis.
reduced to R0 within 2 years. Additionally, R25 million of service charges were identified which were not billed previously due to identification of non-existent meters. The average payment rate at George Municipality increased to 105% for the year, April 2005 to March 2006.
» References
Newcastle Local Municipality We were appointed in 2004. The municipality's billing increased from R21 million in March 2004 to R23 million in July 2005. During the same period the payments has improved from R16 million (76%) to R22 million (96%). In addition, during the same period, the total arrears outstanding was reduced from R190 million to R152 million.
Matlosana Municipality Makhado Municipality Mr Kevin Weitsz. Manager:Income Mr Reuben Radzilani, Head: Income Tel 018 406 8406 Newcastle Local Municipality Mr M. Mayisela. CFO Mrs. J Muir. Dep. CFO Tel 034 328 7737 Tel 034 328-7763 George Municipality Mr Moos Cupido. Manager Finance Tel 044 801 9111
Tel 015 519 3057
At the same time we assisted with indigent registration which increased from 3,000 to 18,000. Payments in former townships increased from 2% to 70% in three years. The municipality started investing again for the first time in 3 years and they also realised an improved cash flow of R35 million.
Overstrand Local Municipality Hibiscus Coast Municipality Capricorn District Municipality
Mr Werner Zybrands. MM Willie Kunz, Act CFO Lerato Tswane, Former CFO Mr Jordan Maja. Former Act CFO, now CFO Bela Bela
082 561 6625 Tel 039 312 8302 084 605 6215 Tel 014-736 8002 082 569 8867
George Local Municipality In the George municipality the working capital provision ratio to non-payment amounted to R33 million and was
» Contact us
Contact persons Wallie Louw Tel: +27 (0)12 842 8700 Fax: +27 (0)12 843 9000/I Email: [email protected] Elton Simelane Tel: +27 (0)12 842 8700 Fax: +27 (0)12 843 9000/I Email: [email protected]
Physical address Allan Cormack Street, off Hotel Street, cnr Meiring Naudé Road, The Innovation Hub 0087, Pretoria. Postal address P O Box 29,The Innovation Hub 0087, Pretoria, South Africa Website www.bigenafrica.com
Pag age 7
BIGEN AFRICA Capability Statement
REVENUE MANAGEMENT
Pag age 8
doc_324633686.pdf