Npower SAP billing system “disaster” responsible for £106m operating losses

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Struggling UK energy firm Npower is still bemoaning the billing problems that have plagued the energy company since 2013

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Peter Terium, CEO of Npower’s German parent company RWE said the “serious process and system-related problems in customer billing” was the “main reason” for the €137 million (£106m) operating loss incurred by the UK supply arm of the business.

The energy firm has lost 351,000 customer accounts in 2015 after widespread complaints over billing.

The billing problems occurred as the result of a botched migration from legacy in-house systems onto a SAP platform, orchestrated by IBM in 2011. 

"What happened there was a disaster,” Terbium said during RWE’s 2015 fiscal press conference today. However, he added that the company took "swift and rigorous action to remedy the situation".

He said: “In mid-2015 we replaced the management of npower in the UK. The new team headed by Paul Coffey has analysed the problems and put forward a detailed, two year restructuring plan. We hope to be out of the “valley of tears” in the UK by 2018.”

The firm’s restructuring plan will lead to significant UK job losses, leading to concerns of a continued negative impact on customer service. 

General secretary of UK trade union Unison, Dave Prentis, responded to the proposed job cuts: “Npower has been in trouble for some time thanks to poor decision-making at the very top, and workers are now paying the price.

“The company’s failure to invest properly in new systems has left it with one of the worst customer service records in the business.”

Npower is still struggling with the sheer volume of customer complaints following the billing issues. The energy company still has temporary customer service staff on its books, dating back to December 2013, when customer complaints peaked at 306 for every 100,000 customers. The company was also criticised for offshoring hundreds of back-office jobs in 2013.

Read next: Npower calls in service partners after troubled SAP rollout disrupts billing systems

Terium told a press conference today: “By the end of 2015, for example, the number of customer complaints had fallen by 50 percent, and this has been acknowledged by the UK regulatory authorities.

“That means we are currently third among the six big UK suppliers in terms of numbers of complaints, after being at the bottom of the table. To work through the accumulated customer complaints, Npower had engaged a large number of temporary workers. These are now being gradually wound down again.

“Our objective is to simplify and standardise processes. We need to reduce operating costs, and to win back lost trust.”

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