Anglian Water estimates it misses out on about two per cent of its annual revenues as a result of customers failing to pay their bills, which for an organisation that turned over about £1bn in the last financial year equates to an eye-watering £20m. It believes improvements to its core IT systems can help minimise that lost revenue.

If Anglian can eradicate that bad debt over the next two to three years, it says, it would be able to knock £11 off the bills it sends out to each of its six million paying customers, which include industrial, commercial and domestic users in 12 east of England counties, stretching from the borders of greater London to the outskirts of Hull.

Anglian Water customer service director Martyn Oakley says the company is under pressure from Ofwat, shareholders and customers to collect as much debt as it can. Therefore it is exploring every means it can to bring those figures down - legal routes and improvements in its own debt collection systems.

“It is certainly not going to get any easier in the current economic climate, especially as there is no sanction of disconnection with water supplies. We have fundamentally large proportions of debtors that owe us money now who are still using the product, thereby generating still more debt all the time,” he says.

One specific problem Anglian Water faced was extracting data about bad debtors from its customer care system, SAP IS-U, which was developed specifically for use by utility companies.

To speed things up and catch customer details that were falling through the net, Anglian introduced the SAP billing system with Experian’s Tallyman debt collection management software earlier this year with the aid of systems integrator CSC.

“The key thing was configurability – the debt system needed to be flexible enough for us to change the strategy around the way we collect debt, and SAP was too hard and inflexible in this area,” says Oakley.

“Tallyman puts the agent in control, with all the key facts on a single screen, making it easier for us to test and change strategies.”

The integration between the two pieces of software was complex because Tallyman uses different data models to the SAP system. Tight timescales and the need to port the data to Anglian Water’s external contact centre telephony system added to the challenge.

Anglian Water installed new three dedicated servers to host the system, but no other upgrades to the IT infrastructure were required. Oakley declined to reveal how much was spent in total on the project or the value of the annual support and maintenance contracts. He says that commercial agreements with rewards and incentives for CSC to implement the project on time were put in place from day one, however, one reason why the software was up and running with the minimum of fuss or delay.

“We did it in record time and delivered it exactly on time, which was almost a first for us. All too often IT delivery does not give you everything you plan for when you first set out, and we did not have the time to do it twice. It was a massive collaborative effort all round,” he says.

While it is too early to tell how much the Tallyman system has helped Anglian Water to reduce bad debt, the software has already given the company much more detailed visibility into its customer accounts, identified lost customers and speeded up the collection process.

“We cannot quote a number on the bad debts [recovered] yet, but we believe we will see a return from the financial perspective in the first few months,” says Oakley.

“What we can say is that within a couple of weeks of going live we were able to trace around 30,000 customers through the various debt collection agencies we use. And whereas previously we would have to have manually updated all of that information using the billing system, it is now a simple upload through Tallyman and we have closed maybe two to two and a half months' worth of debt recovery delay as a result.”