CenterPoint Energy

1. Draft for Discussion – V4 CenterPoint Energy Becoming Network of Choice by Continuing the Customer Service Momentum Proposed Next Phases Of Work March 29, 2004

2. Outline • “Network of Choice” – Business benefits defined • Qittitut structured approach to identify improvements: S-P-O-T • Definition of next phases and approach characteristics • High level roadmap of key activities • Deliverables and work products – Examples • Key deliverables by activity • Sample work products by activity • Summary – The bottom line

3. Network of Choice – Business Benefits As CNP becomes the Network of Choice... Customers: • select CNP for the unique value they receive vs. other pipes • view CNP as “the” standard when it comes to customer satisfaction • publicly endorse and actively refer CNP to others Market demand for CNP services pulls CNP into new geographies Competitors seek to replicate CNP practices Employees view CNP as the Employer of Choice and are CNP advocates Investors regard CNP as the Investment of Choice due to our: • ability to leverage intangible assets and • growth potential unlike any other utility

4. S P O T Qittitut Structured Approach The order of the analysis is very important… • Strategy: • Which customers are most important (short and long term), why and what can drive them to CNP? Process: • All customer-facing processes must be clearly identified, including key inputs and outputs Organization: • New roles, skills & training must be defined • A few important & realistic measures need implemented Tools or technology: • Always match the tool to the job

5. Phases & Approach Characteristics We have divided the work into logical phases, shown on the next slide: Phase I – Gap Analysis has been completed Phase II – Achieving Early Momentum, Prioritization & Action Planning Phase III - Defining Improvements, Quick Hits and Implementation Next Phase: Continuous Tracking & Sustaining The Qittitut structured approach has the following characteristics: 1. It gets early momentum and meets your desire to get communications underway with the customers and CS/CNP staff. 2. It identifies and implements "quick hit" improvements to get early, measured success toward the Network of Choice objective. 3. Focusing on early wins will not compromise the structured (S-P-O-T) process needed to define permanent improvements across CNP to help operationalize your "Network of Choice" objectives.

6. Phase III Phase II Design Implementation of Change Management Processes Get early momentum on the CS change - with customers, employees and management Initiate specific communications, forums, recognition and accountability steps High Level Roadmap of Seven Key Activities ` Continuous Tracking & Sustaining Phase I Findings 8-10 weeks 4 weeks 4 weeks 4 weeks Define Improvements across CNP: Engage Field Services and Pipeline Services Identify all customer facing processes & owners (by segment) with input-process-output analysis Coordinate with Millennium (and other) projects A Analyzed key stakeholders Analyzed customer-facing employees Analyzed key customers 1 4 Focus on CS: Define instrument to replace Mastio survey Refine incident log Evaluate CRM system applicability (Sales Logix) 5 6 Define CS responsibilities & steps to operationalize roles Conduct employee training simulations Design KPIs and customer satisfaction management system Map CNP internal I/T systems to support employee needs B 2 Redefined Mastio attributes to factors important to CNP and their customers Defined Business Model: Level 1.0 and 2.0 Set Priorities: Conduct (S-P-O-T) Kickoff Workshop Complete customer segmentation analysis Conduct next round of customer interviews Relate Business Model to segment success drivers 7 Implement “Quick Hits” to improve CNP staff response to customers Implementation plan for longer term improvements & sustainability C Defined gaps vs. CNP objective to be “Network of Choice” … More than transaction improvement … Change the game by new customer value propositions 3 Process Organization Gap Analysis Strategy Technology

7. Definitions & Examples Deliverables: Any documented set of conclusions that requires review by the Oversight Committee for cross-functional consistency or higher level management endorsement…part of the contract between Qittitut and CNP. Activity 2 example: If the customer segmentation analysis shows that producers are more important than industrials for the future growth of CNP - any shift away from existing customers would need endorsement. Work Products: Those internal documents, data, logs, and summaries important to the team to progress the project. They are often updated and not part of the contract. Activity 1 example: By implementing the incident log early in Phase II, the project team will have 8-10 weeks of actual customer data to define possible quick hits and implementation activities.

8. Phase III Phase II Key Deliverables by Activity ` Continuous Tracking & Sustaining Phase I Findings 8-10 weeks 4 weeks 4 weeks 4 weeks A. Process maps of customer facing processes & owners (by segment) including Field Services and Pipeline services A Analyzed key stakeholders Analyzed customer-facing employees Analyzed key customers 1 4 A. CNP Instrument to replace Mastio B. CRM system evaluation summary 5 6 A. CS job descriptions, roles & responsibilities B. Training session design A. List of internal I/T system improvements B 2 Redefined Mastio attributes to factors important to CNP and their customers Defined Business Model: Level 1.0 and 2.0 A. Kickoff Workshop B. Customer segmentation analysis 7 A. Quick Hit implementation B. Next steps implementation plan C Defined gaps vs. CNP objective to be “Network of Choice” … More than transaction improvement … Change the game by new customer value propositions 3 A. Specific communications, forums, recognition and accountability steps B. Change Management Plan Process Organization Gap Analysis Strategy Technology

9. Phase III Phase II Sample Work Products by Activity ` Continuous Tracking & Sustaining Phase I Findings 8-10 weeks 4 weeks 4 weeks 4 weeks A. Issues and improvements log B. Key process statistics A Analyzed key stakeholders Analyzed customer-facing employees Analyzed key customers 1 4 A. Incident log 5 6 A. KPI Summary B. Internal work session results C. Rapid response process A. I/T system survey B 2 Redefined Mastio attributes to factors important to CNP and their customers Defined Business Model: Level 1.0 and 2.0 A. Segmentation criteria B. Customer Interviews or forum results C. Map Business Model to segment success drivers 7 A. Project prioritization criteria C Defined gaps vs. CNP objective to be “Network of Choice” … More than transaction improvement … Change the game by new customer value propositions 3 A. Management change recommendations & observations: Compensation plans, customer visits, leadership role definition, etc Process Organization Gap Analysis Strategy Technology

10. Summary – Phase I Findings Re-iterating Phase I Results: In the first phase of work, the stakeholder and customer interviews and focus groups concluded that the planned CS initiative is not a “rescue mission”. However, there could be competitive advantage to “Changing the game by new customer value propositions,” and Having a CS culture could be an important part of that advantage.

11. Summary – The Bottom Line Qittitut consulting exists to “Help companies conceive and achieve top-line revenue growth strategies.” In 60 working days, the next phases of the project will: • Gain momentum by initiating customer & staff communications and recognition mechanisms. • Define the improvements needed, across CNP, to help achieve your Network of Choice objectives. • Put in place the change management processes to make sure the improvements are sustainable. • Implement any quick hits that can immediately improve customer service.

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