Centrica vs Accenture: What a mess

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Project Jupiter, an IT system implemented by Accenture for British Gas, is now the centre of a multi-million-pound legal battle.

The system was aimed to revolutionise Centrica’s (the parent company of British Gas) billing system, but instead the energy supplier had to hire 2,500 extra staff and invest millions more pounds to fix the problems and make it work.

The showdown promises to last for months as each company fights to prove that it was not to blame for inaccurate bills sent to homes across the UK. Complaints to the energy watchdog energywatch about British Gas hit a record 14,000 in March last year.

The energy market is seeing record amounts of customer unrest, not least because British Gas has today again announced price hikes, despite having increased them by 12 percent in the last two years. Although we can’t blame utilities companies for variance in the wholesale energy markets, we can hold them liable for billing inadequacies. And boy, are there issues!

Complaints about billing are nothing new. energywatch filed a “super complaint” with Ofgem back in April 2005 due to the burgeoning levels of billing inaccuracies. The problems with billing in the utilities sector stem from the use of disparate legacy systems due to consolidation in the market. Ironically, Project Jupiter was Centrica’s attempt to put all billing woes right.

When IT outsourcing overlaps with a customer-facing element of the business (ie billing), there is always an element of risk. When you outsource the software behind a billing system, you not only outsource a part of your brand, but something that affects customers directly – in their pockets.

And now the situation between Accenture and British Gas’ mother company, Centrica has degenerated to new lows. So how can utilities best prepare themselves for outsourcing the software behind their billing platforms?

  • • Piecemeal: rather than outsource the whole lot, it might be easier for utilities companies to outsource the billing of one of their functions – they might have a service specifically targeted at pensioners, for example. Slowly they can build on the success of one project, as the service provision increases in quality and the supplier proves its worth.
  • • Don’t outsource a problem: a major temptation for companies is to outsource a problematic process. Don’t! You need to thoroughly understand the problem and the issues before getting a third party involved. Conduct a thorough needs analysis and make sure you engage the right partner, who has the right domain expertise and cultural fit.
  • • Iron clad contract: a liability clause is essential – this will detail who is responsible for what, should things go wrong. This can help companies to avoid ending up in the courts.

    Business Orientated Metrics (BOMs) are also a good idea – they mean that together the organisation and their partner are working towards problem solution, as opposed to just meeting productivity targets. BOMs would allow incentive based payments which would help an outsourcer focus on delivering a service that is good for the business.