Outsourcing experts have predicted there will be a sharp
rise in offshore business process outsourcing deals in the utility
sector following Thames Water's landmark deal with IT services firm
Xansa.
Xansa will handle more than 700,000 metered billing exceptions and
customer correspondence for Thames Water every year, accessing its
Swindon-based customer services systems remotely from India.
"This is a first for the utility sector but it is a very natural
development for Thames and a measure of how things are going," said
Richard Sykes, chairman of outsourcing advisory firm Morgan
Chambers. "We will see a lot more deals like this."
Sykes said Xansa's intimate knowledge of Thames Water's back-end
processes, gained through their 15-year relationship, and the
relatively low operating costs in India bode well for the
deal.
"We expected this to happen in the utility sector," said analyst
Jamie Snowdon of IDC. "This is just the tip of the iceberg." He
said the sector is under intense pressure to cut costs due to
increased competition following deregulation.
Snowdon expects the first wave of offshore BPO deals to involve
mundane tasks such as billing, forms and processing, followed by
functions such as accounting.
The BPO service has only been live for six weeks but Linda Maslen,
Thames Water's customer services director, said it was already a
"phenomenal success". In the first month, Xansa exceeded its
service levels by 17%, helping to clear a backlog of
transactions.
As part of its service level agreement with Thames Water, Xansa has
to process correspondence within four days. After three months it
has to process 90% of metered billing exceptions by day one and
100% by day three.
Thames Water, the world's third largest water company, declined to
discuss the financial aspects of the deal but said no job losses
would result from it.
