British Gas relies on in-house nous to drive business

British Gas is improving customer service

British Gas is betting on a major IT overhaul to help repair its reputation for poor
customer service.

This month sees the preliminary hearing in a lawsuit between the firm’s parent Centrica and consultancy Accenture, over problems caused by a billing system that was blamed for the loss of hundreds of thousands of customers (see below).

The project, codenamed Jupiter, was first delivered by Accenture in 2005, then brought back in-house by British Gas in 2006, a move seen as essential to tackling the subsequent problems.

“If you want to deliver customer service and have world-class systems that give competitive advantage in the market, you have to have the ability to change yourself, as well as having people who understand the business and its IT footprint,” said Dave Bickerton, chief information officer at British Gas.

“Because of what was going on with the Jupiter project, there was a clear sense that the way we were operating wasn’t as optimum as it could have been,” he told Computing.

“We then started looking at where we were with that programme and how to develop our internal capability.”

The IT set-up at British Gas was heavily outsourced, so finding the right skills was one of the challenges ­ in particular there was a shortage of expertise in SAP’s software for the utilities industry.

The company started a recruitment drive to support the transformation and now has 500 staff working on areas such as process improvement, maintenance and application change.

“After the problems we had, we’ve gone through a period of removing errors and now we are addressing the main design issues with the system,” said Bickerton.
“What drives a lot of issues for any UK utility company is the industry integration ­ it is very easy to introduce errors in the system, just because of the number of different touch points within the industry,” he said.

“Now we want to improve and simplify processes to enhance service and be able to offer energy and services products. This will bring integration challenges, but the good news is that our billing system is the latest version of SAP and we can really make the most of its capability.”

British Gas also intends to explore areas such as service-oriented architecture to move client-focused systems online, such as service appointment booking.
A range of legacy systems may be replaced by SAP and a vendor selection programme is under way to improve the firm’s customer relationship management platform.

“Our customer data is a fantastic asset, so we want to improve our ability to use, consolidate and simplify it, so it becomes even more valuable,” said Bickerton.

The changes so far have reduced IT costs by seven per cent year on year. The company is now carrying out a strategic process looking at the priorities and duration of IT projects, as well as the level of investment.

Despite recent history, the company still values the role of third parties to reduce cost and complexity, working with Capgemini and Cognizant for offshore resourcing and maintenance, and T-Systems for datacentre and desktop services.

But after its experience of outsourcing large projects, the company now favours phased development and uses the Scrum methodology for software development.
“One thing that is absolutely core to our strategy is that we won’t have massive projects. We will manage this change through incremental delivery,” said Bickerton.

“Our new strategy is to break down problems into much smaller projects and bring business and technology people to work together. If you break things down, you can deliver quicker and build more confidence, so as a business we are much more confident about technology change.”

With an insourced model, British Gas retains critical knowledge in areas such as architecture, design, development and project management. Having the right skills, as well as the right attitude, was essential to the new set-up.

“British Gas suffered on the back of the poor implementation, so we wanted systems that people knew were there and were reliable. Given that we were moving from outsourcing to insourcing, we wanted to have high levels of business engagement and be able to go back to a strategy conversation,” said Bickerton.

“We have a big communication activity and our staff can see where we are heading. In such a difficult environment, it is key for me that people understand where they fit in.”

Bickerton expects that in the next two years the business will have delivered a substantial amount of the change planned when the insourcing strategy commenced.

The rollout of smart meters from 2010 will present new challenges, and will become another key focus.

“We had a lot of progress in that area and see it as a great opportunity, so we are getting our systems ready internally as quickly as possible,” said Bickerton.

“We will have a big online presence and our systems will be intuitive and what we can do with our data will be in a much better place. When people have best-in-class systems, they will start wondering what else can be done with the capabilities we deliver,” he said.

“Our ambitions are extensive and delivering the level of change we are doing is challenging ­ there will be ups and downs during the process but we have a great team and we’ll work it through.”

Former IT partner defends its record

British Gas parent Centrica last year initiated a £182m lawsuit against IT supplier Accenture over a billing system that was meant to improve customer service but ultimately led to thousands of customers switching suppliers.

The energy firm hired Accenture in 2001 for the project to unify records of gas and electricity customers on one platform capable of handling 250,000 meter readings and 200,000 bills a day.

Accenture was to receive £317m, from projected savings of £397m. However, in addition to the initial investment, British Gas claims it was forced to spend more money, including recruitment costs to address the system failures.

Accenture said it delivered the system to Centrica’s specifications on time and on budget in 2005.

“At its own choice, after extensive testing, in March 2006 Centrica took total control over all aspects of the system about which it now complains, and Centrica operated the system itself for more than two years before its warranty claim was made,” said an Accenture spokesman.

“Accenture has filed its defence and counterclaim to Centrica’s claim and now exchange of statements of case has closed. The judge has ordered preliminary issues to be heard at the end of June which could narrow the scope of the dispute.”