Customer account system aims to stem £200m a year loss

At the end of the year, the UK's gas and electricity suppliers will begin to roll out an industry-wide billing system. The move...

At the end of the year, the UK's gas and electricity suppliers will begin to roll out an industry-wide system to handle customer switching. The move is a bid to stem a £200m a year loss resulting from inefficient procedures to allow customers to switch utility suppliers.

Plans for the system, which would be one of the biggest cross-company IT projects ever attempted in the UK, were agreed in response to months of criticism about poor customer service.

Regulator Ofgem said that lack of common data formats has led to hundreds of thousands of consumers being billed incorrectly when they transferred suppliers, with a loss of up to £200m a year through inaccuracies.

According to Ofgem, 53,000 transfers - about one third of the 130,000 carried out each week - are not managed using automated systems and have to be resolved manually by staff.

At a summit meeting last year, organised by independent watchdog Energywatch, about 40 gas and electricity suppliers agreed to design an integrated system and to begin implementation in late 2004.

British Gas, which lost £13m last year because of billing delays and had about 10,000 customers awaiting a year's worth of bills because of problems transferring data, is spending £300m on a CRM system to improve control of customer data.

In a joint statement, the company, together with Npower, Scottish Power and Powergen, announced "their collective com-mitment to drive improvements in billing accuracy by working to repair and fix industry processes and improve data quality".

They said, "With many millions of consumers having switched electricity and gas suppliers since liberalisation of the markets in the late 1990s, some data inconsistencies in the information held on some customers have been swapped among all participating suppliers."

David Bradshaw, an analyst at Ovum, said the industry needed to tackle some key questions if the initiative was to succeed.

"There is a critical need to decide on a data model," he said. "Questions that need to be answered range from the highest level, such as deciding what is meant by a customer, down to the details of the fields. There needs to be a way of exchanging data, such as web services or XML.

"The nature of the body to co-ordinate the data transfer will have to be decided. Will it merely manage the process, set standards and settle disputes, or will it manage the data hands-on?

"I would say that, given the number of parties involved in the data transfer, the safest method would be to establish a body to act as the guardian of the data and force everybody to conform."

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