Wholesale electricity transaction processing
company,Elexonhas signed a £40m,
five-yearoutsourcing deal with Logica, which is
expected to pass on operational cost savings to the retail
electricity industry.
Elexon said the exact savings will not be clear until later in
the year, when the positive effect of the upgrades to the
communications infrastructure,
database software, server hardware and operating system have
been measured.
However,
Elexon's chief executive Stuart Senior (pictured), said the
percentage savings overall were expected to be in double
digits.
He said the deal with
Logica consolidates the operation and hosting the core elements
of the balance and settlement code system under one contract with
one service provider, making the services more efficient to
manage.
According to Senior, in a first for Elexon, the contract with
Logica has built-in operational cost reduction targets of five per
cent year-on-year.
Elexon now plans to make further cost savings by replacing its
legacy applications with more up to date software that is easier to
update and maintain.
"Most of our applications are between 10- and 15-years-old, and
it is costly and time consuming to make and test changes to these
critical systems," said Senior.
He said Elexon would like to implement as much standard software
as possible to reduce and even eliminate the use of bespoke
applications.