November 10, 2009

British Gas, Accenture IT battle heads for court

Centrica favoured in Accenture lawsuit judgement over failed billing project

By John E. Dunn

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British Gas and consultancy Accenture are heading for a full court showdown after a judge ruled in favour of the energy utility in the increasingly protracted and angry battle over who was to blame for the collapse in 2006 of its customer billing system.

The High Court has ruled in British Gas’s favour on all six points of complaint over the failure of an IT project that the utility claims disrupted its customer service operation and led to a large and embarrassing spike in complaints.

The energy giant says it has since brought the SAP-based billing system in-house, but wants up to £220 million in damages for sorting out the alleged mess in a project that cost it £300 million between the date of its commissioning in 2001, and the moment in 2006 when it pulled the plug.

In fact, the judgement, from Mr Justice Field of Winchester, expressed no view on the correctness of the claim, merely that British Gas has a right to test them in law. This has not stopped the company from declaring a first round victory in its attempt to get compensation.

“British Gas is pleased with the judgement, as we feel it brings us one step closer to holding Accenture to account for the disruption caused to our customers. We look forward to moving to the full trial as soon as possible,” British Gas told The Times newspaper .

For its part, Accenture is set to fight British Gas parent Centrica over this initial judgement, and this will likely delay the court battle until at least 2012.

“While the judgement on preliminary issues allows Centrica’s claim to proceed to trial, there has been no final determination of the case or any of the detailed underlying facts of this case. We remain confident that Centrica’s claim is baseless and that Accenture will prevail when the factual issues are examined in detail at trial. We disagree with the judgement and plan to appeal,” said an official statement from the consultancy.

According to Accenture, the system was delivered on time, on budget, was tested by British Gas, which used it for two years before making any claim. The company also claims that British Gas still uses unspecified elements of the system today. “It remains our firm view that any problems were of Centrica’s own making,” continues the Accenture statement.

Wherever fault lies, that something went seriously awry is hard to dispute. In 2007, Energywatch wearily noted a large increase in billing complaints between October 2006 and March 2007. "British Gas has approximately 30 percent of all gas and electricity accounts in Britain but more than 70 percent of all complaints," the watchdog was quoted as saying.

British Gas will no doubt have its initially robust defence of the allegedly-flawed system in 2006 and 2007 pointed out to it when the well-paid legal QCs are wheeled out with sleeves rolled up during a trial.

A huge energy company has fallen on its face, leaving a well-known It consultancy, rightly or wrongly, to be handed the blame. It could be that the reputational stakes are now so high for both parties that it is worth the risk of a public court confrontation in order to dodge ultimate blame, whether from customers or shareholders.

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