Centrica, the UK utility giant operates in an industry embroiled in a mix of global environmental and economic uncertainty. Consumer gas and electricity bills have soared in line with increasing wholesale prices, challenging margins in the company's core UK residential business, operating under brands including British Gas.
The company's IT structure changed dramatically in March when Group CIO Gareth Lewis left the role and IT responsibilities were devolved to the CIOs in the company's individual business units.
Consolidation is the watchword for the coming year, as the company recently announced plans to unite its retail services under a single One British Gas banner. A single customer view for gas and electricity customers has been realised via a Siebel CRM system installed alongside its SAP billing system.
"A big part of the progress we have made is that we made the decision to insource our applications capability and re-establish control of what we are doing with our core systems, and not be reliant on a systems integrator," says David Bickerton, CIO of the British Gas Energy arm of Centrica.
"There was a real scarcity in the market of people with SAP utility skills and we have built those skills over the past couple of years. We also built a very effective working relationship with SAP and they are an important part of what we do as we move forward."
Centrica has also completed the roll-out of its SAP platform from the back office into its power generating stations, replacing a diverse range of technology in its plants. Operations, maintenance, engineering, project systems, materials, procurement, finance and accounting will be managed through the IT system, which was developed with Capgemini UK.
The next logical step for Centrica is to install smart meters across its 18 million-strong customer base. "From the investment SAP is making, and the investment we have made with SAP, the technology aligns with smart metering," says Bickerton. "Earlier this year we completed the upgrade to the latest version of SAP, which means we can take advantage of the enhancements that are coming. The use of SAP for smart metering is going to be key."
In May 2007, it signed a three-year, £2.1m outsourcing deal with long-term partner, Fujitsu to reduce the application maintenance costs in its British Gas residential and business customer division by 50 per cent. The deal, which handed over the support, development and maintenance of business-critical systems for 10 million gas customers and six million electricity subscribers to Fujitsu.
The company has also been busy in the High Court, with the dispute between Centrica and Accenture over the Project Jupiter billing system continuing over a year after British Gas first served a £182m writ on the IT services firm.
The utility said the Jupiter system, which cost £30m and which rolled out in 2006 to 2007, was problematic and resulted in issues that "severely impacted" on its customer service department, and an independent analysis had concluded that Accenture was responsible for "fundamental errors" in the design and implementation of the system.
Accenture points out that Centrica performed the migration itself and that Centrica didn't become concerned about the level of exceptions experienced until the second half of 2006, months after it took sole responsibility for the billing system, and continues to defend itself vigorously. A decision is expected in 2010 or 2011.