Centrica has said that 2,000 British Gas jobs will be axed in line with reorganization efforts.
After focusing on sales growth rather than cost efficiency, Centrica [CNA.L] is almost three years behind its rivals in implementing an integrated billing platform. Its new platform, Jupiter, is only now entering the phase of migrating gas and electricity customers onto the same platform, whereas companies such as ScottishPower [SPW.L] and EDF Energy were doing this in 2002.
Jupiter will allow Centrica to reduce cost-to-serve and employee numbers, as well as increasing its product cross-selling potential. Centrica had traditionally used two separate billing platforms to manage gas and electricity customers. While these systems were adequate for existing gas customers and a growing electricity customer base, they were separate, leaving multi-product customers supported by single product infrastructure.
Serving customers’ accounts required advisors to use unlinked systems, cross-selling was hindered and service center advisors were also unable to operate different systems, leading to staffing and training problems. Although this was the norm for most utilities initially after the market was opened, key acquisitions resulted in suppliers focusing on integrated billing platforms; first migrating accounts from one company to another, then from gas and electricity to an integrated billing platform.
As Centrica did not acquire one of the 14 PES supply businesses, it never had the immediate requirement to consolidate billing platforms. As a result, it delayed integrated billing until growth in its customer base had stabilized.
The Jupiter project consists of five releases. The first provided a single view of the customer and saved an average of 15 seconds at the start of each call and another 30 seconds for internal transfers between billing platforms. Release two went a step further in enabling advisors to cross-sell.
The third release, the billing engine, is presently being piloted for launch in 2006. This version should provide the most cost savings, allowing advisors to serve a customer on the same system for both gas and electricity.
However, although Centrica says that the nine-month delay to the project timeline will be immaterial in cost, the significant savings that should have been achieved in 2005 will not be realized.
