Firms unite on IT plan to fix £200m errors

Gas and electricity suppliers have agreed to design and implement an integrated billing system to stem a £200m a year loss from...

Gas and electricity suppliers have agreed to design and implement an integrated billing system to stem a £200m a year loss from inefficient billing procedures.

A three-stage plan was agreed despite disagreement over root causes at a summit meeting after months of criticism of the energy supply companies.

Lack of common data formats has led to hundreds of thousands of consumers being billed incorrectly when they transfer supplier and energy companies, with a loss of up to £200m a year through inaccuracies.

According to Ofgem, 53,000 transfers - about one third of the 160,000 carried out each week - are not managed using automated systems and have to be resolved manually by energy company staff.

The summit was hosted by independent watchdog Energywatch and was attended by energy industry regulator Ofgem, the DTI and about 40 companies involved in the supply of gas and electricity.

Stage one will see analysis of existing systems carried out by an executive group from supplier companies.

Working groups of specialists from the industry will then design the system, and stage three will be the implementation, which is due to begin by the end of 2004. This could be one of the biggest cross-company IT projects ever attempted in the UK.

Agreement will need to be reached on root causes of the current problems during the analysis phase. According to an Energywatch spokesman, divisions were apparent at the summit meeting.

He said, "The majority believed the existing systems to be too old and that upgrades are needed, while others believed there is nothing wrong with the systems and it is how they are used that is the cause of the problems." Various solutions were suggested, including a data management body for data transfers.

Ovum analyst David Bradshaw 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. 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 some 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 upon. 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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