E.on transforms financial insights with bare-knuckle programming

Energy supplier E.on Retail has gone live with a financial transformation software project that will give it an accurate view of the profits generated by each customer and better forcasting of future demand.

Energy supplier E.on Retail has gone live with a financial transformation software project that will give it an accurate view of the profits generated by each customer and better forcasting of future demand.

The system is the fruit of a three-year system development project that cost more than £10m. E.on said it almost had to revert tointensive "bare knuckle" programmingto reconcile its billing accounts with its accounts settlement system to establish its gross profit margins.

The company has accounts for more than eight million customers. Project leader Lawrence Edwards told Computer Weekly that it must reconcile its customers with the accounts it runs with power generatorsto establish its gross profit margins. "It is a massive problem because of the data volumes and complexity," said Edwards. "Others have tried and failed, but we persevered."

Edwards said, "Operations are based on 150Gbyte tables generating 1.8 billion rows of new data over approximately 14 hours." The system consists of in excess of 6Tbytes of customer data and is growing rapidly.It has to integrateseamlesslythousands of elements containing data from different sources into one system. For example,a house may be listed in a table for gas supply and in another for electricitysupply and in a third for account holder. The system combines the data from all these tables to produce a single, comprehensive picture of the account holder.

The database alsohas to cope with high churn in its customer base, which requires intensive data cleansing to produce accurate bills.

"The system generates billions of rows of data daily," Edwards said. "We couldnot do it with our [SAP] financial system, or indeed any other off-the-shelf package."

E.on turned to the Oracle database management systemrunning on a dedicated 48-processor Sun Sparc unit. The key application development tool, said Edwards, was Oracle's version of Olap (Online Analytical Processing).

This is a specialist tool that uses a database with a multidimensional data model that combines aspects of

navigational databases and hierarchical databases to make it faster than standard relational databases. This allows it to quickly produceanswers to complex analytical and ad-hoc queries against huge data volumes.

With better information, E.on should be able to make better decisions, Edwards said. However, pricing is a hot topic in the industry. He was reluctant to be drawn on how the system will affect E.on's pricing, but he said it will in the longer term make E.on better at sending customers bills for the right amount. This should mean it gets paid quicker, and better forecasting means it should be able to buy cheaper. Combined, they should make E.on more competitive and hence more attractive to customers.

E.on's financial transformation project – what it has achieved

• Cut the time to create long-term demand forecasts from 12 weeks to five days

• Cut end-of-period reports from weeks to hours

• Allowed users to build detailed "what if" scenarios based on customers, products, weather changes, and rebates

• Established a single, common data source and full audit trail

• Made it possible to accurately predict gross margin and future financial position through comparing forecast revenue with forecast costs

• Gained real-time updates on the popularity and financial position of each of the company's products and services

• Ensured faster settlement with partners, suppliers, and clients.

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