CIO interview: Mike Young, Centrica

Meeting Satya

In a recent blog post, Young outlined how Centrica had formed a strategic partnership with Microsoft following a meeting with Nadella. He wrote: “What’s really exciting about our partnership with Microsoft is that it means we can move at speed, taking part in innovative pilots and learn how the leading edge of cloud computing can help us accelerate change and move into new markets.

“We heard today about the future of artificial intelligence (AI) from Microsoft, and so we are delighted to have our data science and digital teams working with them, developing AI and machine learning capability that will transform the ways we interact with our customers.”

Young says of the partnership: “Our CEO, Ian Conn, sat down with Satya Nadella two week ago and talked about what we are both doing in Azure, and where we could benefit from doing things jointly.”

He believes Centrica will benefit greatly from a close working relationship with Microsoft. “Satya has something very unique and chose three key partners,” he says. “Centrica is the only one in the energy sector.”

Centrica’s CEO was asked by Nadella to take part in an evaluation of some new big data tools Microsoft has been developing. Young says: “This is a strategic partnership. My chief data scientist sits on the advisory team at Microsoft and has a real say in its roadmap. We have the ability to lean on the 300 data scientists at Redmond. I expect we will end up with something we can use.”

An audience with McDermott

It is a similar story with SAP, another of Centrica’s strategic software providers. Young says: “We have a strategic partnership with Bill McDermott. It will take two years to take on board our legacy systems and move them over to Hana.”

Explaining the challenge Centrica faces with its back-end systems, Young says: “We have 23 million customer across the group. I have eight significant ERP systems in the UK. We run two of the biggest SAP platforms. It is the same system used by Apple and Microsoft. It is a big batch-fed system and is 24 hours behind real time.

“How do we take this batch system and get real-time data so that when a call comes into the call centre, the operations team has the most up-to-date information about the customer?”

After a meeting with McDermott, Centrica has agreed a plan to migrate to an end-to-end digital back end based on SAP Hana to overcome the limits of batch processing. Young says: “We have moved our central financial ERP from from legacy SAP to SAP Hana, which means data is updated every second.”

The procurement team has been moved onto another SAP product, Ariba, while WorkDay provides HR. “The tricky piece is in the back-end billing and ERP system,” says Young. “We have put in an API layer and use machine learning to trawl through the batch systems, and repair data in the back-end systems.”

According to Young, these measures have enabled Centrica to speed up processing time from the previous 24-hour limit in the batch system to just an hour.

From an enterprise software perspective, field service is another area of the business that needs addressing, says Young. Centrica’s 50,000 field engineers use a patchwork quilt of 11 different systems, but over the next two years, “we will be using a new cloud-based field management system”, he says.

Digital challenges

Young has rolled out digital transformations across a number of corporations and, in his experience, it is never easy. “There are three things to do,” he says. “Use the right tech for the right data outputs, wrap this round a proper business process in the most efficient way, and third is the people. If you haven’t got the people trained, then you have a problem. That is always the hardest to address.”

Young adds: “A third of your employees get it, adapt quickly and become your digital agents, a third need coaching and time to adapt, but a third never really get it.”

To help everyone along at Centrica, Microsoft Office 365 is being used as a collaboration stack, says Young. “This is not just email and Skype for Business, it is also Microsoft Project and PowerBI.”

Digital transformation is often described as a journey. Young says that at Centrica, there are three levels of maturity.

At the most basic level of digital, Centrica runs lunchtime sessions, which are used to help people understand what “digital” means to Centrica, he says. The next stage in digital sophistication is helping people do their jobs through digital initiatives. To help, Centrica has about 600 digital champions across the business, says Young.

At the highest level, Centrica has recruited a digital leadership, which can be parachuted in across the business to investigate opportunities in digital transformation, he adds.