ar130405 - Fotolia
Bristol Water is benefitting from the outsourcing of its core business software during a period of major changes to its operating model.
The company faced its business being broken up in a similar way to how gas and electricity suppliers did, with wholesale, retail and treatment businesses separated. This impacts on IT systems and the small IT department, which has around 8 people, that would have to dedicate time and effort to this.
For example, the separation of its retail business, which sells to customers, from its wholesale business involved connecting its systems to a retail market. This presents major challenges around data.
To this end, the company needed to find a partner that could take over the management of IT to free up resources.
Ben Newby, customer services and IT director at Bristol Water, said the company is “heavily outsourced” in terms of IT.
Its major systems – such as finance, asset management, customer relationship management, and supplier relationship management – are SAP, while IT infrastructure is mainly Microsoft and Cisco.
“In 2013, we needed to select a IT partner that could not only deliver the service, but support the IT changes we needed during this period,” said Newby.
It selected a managed service from Indian IT services company Wipro, as its scale was attractive to Bristol Water. Newby said the organisation is a small business, but has a complicated SAP landscape.
Read more about IT outsourcing in the utility sector
- Danish utilty NRGi outsources its IT to Indian services supplier Wipro as it attempts to transform its operations amid increased competition.
- The organisation that will run the non-domestic water supply market in England outsources the development and operation of its main system.
- Utilities company EDF Energy extends its IT outsourcing contract with Capgemini by another two years.
“We are as complicated as companies 15 times as big as us,” added Newby. “We needed someone with the right breadth of skills.”
Before the outsource, Bristol Water tendered for all the different areas of IT needed support. The result was lots of different suppliers, including boutique companies, running for the business.
“I would end up being the integrator of all these services, but this is difficult because we are small. Thames Water has the scale to do this, but for us it is difficult to manage all those different suppliers.
He said Wipro’s work with gas and electricity companies was also important. For example, in 2014, UK Gas distribution company Xoserve outsourced its legacy application replacement project to Wipro in a seven-year deal.
It took Wipro three months to transition Bristol Water to an IT managed service where it manages all critical IT services, with the exception of telephony and networks.
There have been early success stories. Consolidating SAP support has achieved 30% cost savings, while the service desk now achieves first time fix 45% of the time, compared with 18% before. It also transitioned legacy computer rooms to a single datacentre.
Bristol Water receives around the clock support through resources in India.
The sector is seeing increased outsourcing. Utility companies are going through major regulator-imposed changes, as well as developments, such as the introduction of smart metres.
In most cases, these companies that have the IT infrastructures of large businesses, but the workforces of small to medium-sized enterprises, will look to IT services firms, with economies of scale, for support.