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Business Value Driver

Systems & Processes

Availability and development of processes, knowledge, insights, systems
and data, including energy portfolio management and customer analytics, to support and enhance business activities.

AGL's systems and processes, together with our people, create the foundation for the work we do every day. Through functions ranging from maintaining our plant, trading commodities and providing customer service, we ensure that the energy needs of millions of Australians continues without disruption. AGL is committed to progressing our growth by harnessing the value of digital technology, data excellence and innovation.

Having delivered our $300 million Customer Experience Transformation program in FY19, we’ve moved from a traditional retailer model in which most customer interactions were done through our call centres to a majority digital business model, with up to 3.5 million digital interactions per month in FY20.

By transforming our core systems, we have enabled our retail customers to access the benefits that digital technology can deliver. This enhanced system stability and new capability enabled AGL to deliver a net promoter score for our digital channel of +39 (up from +35 in FY19) and average system availability of 99.05% over FY20, which is the highest level of system availability that AGL has ever achieved.

Our continued focus on putting transparency and control in our customers' hands through enhanced digital capability has led to results including AGL having an industry leading mobile app with 2.2 million monthly interactions, up 69% from FY19, and an increase in customers electing to receive electronic bills of 5 percentage points from FY19 to 60%. Customers are increasingly electing to interact with AGL digitally, with around 70,000 monthly messaging interactions via our mobile app and web, up 50% from FY19, supporting our shift towards digital self-service.

AGL was one of the first major ASX companies to move key IT systems into the public cloud, and will continue to expand this through our multi-year strategic partnership with Microsoft where we will transition most systems to this new capability. In doing so we anticipate avoiding capital expenditure over the next two years upgrading our hardware as it approaches end of life, while improving the security of key applications. This will also benefit our disaster recovery capabilities through improved system resilience. AGL continues to make significant maturity improvements in our cybersecurity measures and is currently ahead of the industry average within the energy and utilities sector based on AEMO's Australian Energy Sector Cybersecurity Framework.

Over the last three years, we have made significant investment in our cybersecurity capability.

Recognising that our customers are increasingly engaging with us through digital channels, we have improved our ability to identify, protect, detect and respond to incidents, evidenced through our ability to monitor and prevent threats that would otherwise have led to business disruption.

As a vertically integrated energy business, a vital application of AGL's well-functioning systems and processes is our management of wholesale market risk through considered hedging strategies coupled with careful analysis and forecasting of generation and customer demand volumes. Sophisticated wholesale energy portfolio management tools are key to this process. AGL’s governance framework establishes the wholesale risk management policy guidelines under which energy hedging activities are conducted. The policy allows for the commercial optimisation of AGL’s portfolio provided that all activities adhere to overall risk limits that reflect AGL’s risk appetite, as well as adherence to regulatory requirements and changes.

99.05%average availability of retail customer systems

>1,000changes to customer systems during FY20 up from
~10/month in the past demonstrating speed to market

More information

Performance data on Systems & Processes is available at 2020datacentre.agl.com.au

Creating value

Analytics

AGL recognises data as an asset just like those at our physical sites. In FY20 we established our Data and Analytics Centre of Excellence to realise the commercial opportunities of data while ensuring strong data governance practices and standards are upheld. We receive millions of points of data, including 45 million digital interactions with our customers each year, and 175 million reads from devices like smart meters each day. We also monitor over 800,000 data points across our physical assets at 1 second intervals. We are building the capability to utilise this data in a responsible manner, generating a strong pipeline of initiatives that will unlock value through advanced analytics.

One example is the advanced analytics being used at our wind farms to detect and measure the misalignment of wind turbines. The concept is now tested and proven, using AGL data infrastructure and data analysis methodologies. In the near future this algorithm will provide the capability to correct the associated sub-optimal performance quickly and easily via centralised control system setting adjustments and avoiding the need for much more costly and human effort intensive wind vane calibration efforts. This capability will help keep the wind fleet at optimal performance level with negligible increase in cost and effort.

System capabilities to optimise experience

During FY20 AGL achieved our highest level of system availability for our customers on record. Over the past four years AGL has made ongoing investments in both technology personnel and systems capability that have improved system stability and reduced outages. During FY20, AGL focused specifically on remediating end-of-life equipment, improved monitoring, capability uplift of key managed service providers, as well as system performance and currency improvements obtained through the cloud.

Our advanced systems capabilities enabled AGL to optimise the working experience of our people and our customers during the challenges brought on by the COVID-19 pandemic. During this time we transitioned substantial numbers of employees in Australia and outsourced partners overseas to being able to work from home, while also providing high quality customer service.

Over FY20 AGL has achieved rapid results by investing in our data platforms. We have increased the number of data sources available to us by 40% in FY20 and connected our data through our Azure data platforms, enabling our teams faster access to secure and trusted sources of data. In transforming our systems we have also changed the way we work to be more responsive and agile. This has meant focusing on our speed to market of high-impact, incremental systems changes that benefit our customers. Over FY20 we made over 1,000 changes to our systems from one hundred projects, compared to making less than 10 system improvements per month three to four years ago.

Having made significant investments in our core systems, we now have a strong digital capability and presence for our customers. We have redesigned our app for solar customers, being the first major retailer to show customers via the app the charge and status of their residential batteries. Collectively, our mobile app development strategy has contributed to a 120% increase in usage of the app since FY19. We launched a new online sales experience for our customers in FY20, allowing for easier comparison of plans, greater relevance of product information and a simplified selection and checkout process, leading to an increase in the number of sales completed.

KPI

FY20

FY19

FY18

FY17

FY16

Target

Major IT incidents

33

47

84

105

Not reported

-

Digitally active energy services to customers

-

-

-

-

-

FY24: 65%

Data security and process governance

During FY20 we had one notifiable data breach under the Privacy Act 1988 Mandatory Data Breach Reporting regime. This breach impacted less than five customers and was due to the actions of a single employee rather than a systemic issue or a cyber attack.

We are well placed to meet the demands of emerging regulatory requirements around an energy specific cybersecurity standard. Further, through our investment in venture capital funds, we have gained access to innovative cybersecurity software that enables us to detect and respond to threats at our operational assets.

KPI

FY20

FY19

FY18

FY17

FY16

Target

Reportable privacy incidents

1

0

Not reported

Not reported

Not reported

FY21: 0

Legend

Improving trend and/or satisfactory outcome

Deteriorating trend

Neutral trend

KPI linked to FY20 remuneration outcomes for CEO and Key Management Personnel (page STI approach and outcomes )

Beyond FY20

Following AGL's purchase of Southern Phone Company in FY20, we plan to develop our multi-product retailing capabilities over FY21 and beyond, focusing on the product, pricing and digital features required to launch broadband and mobile offerings in conjunction with energy products. We are working towards being one of the first ASX50 companies to migrate almost all applications and storage within our business to run in the public cloud by FY22, with the aim of ultimately freeing AGL from the limitations of a physical data centre.

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