British Gas Sues Accenture Over Billing ‘shambles’

CENTRICA is suing the global consultancy group Accenture for £182m over an IT system it claims reduced British Gas’s customer-billing process to a shambles.

The IT system, dubbed “Project Jupiter”, was the cause of the appalling customer service that lost British Gas hundreds of thousands of customers, a High Court writ from Centrica says. Centrica is the parent company of British Gas, which is the biggest supplier of gas and electricity to homes in the UK, with 12.5m customers.

At the height of the problems, British Gas employed 2,500 extra staff in an attempt to resolve the mess.

Centrica is expected to confirm it has begun the court action this week, when it holds its annual meeting and issues a trading update.

During 2006 and 2007 British Gas was lambasted by consumer watchdogs and the media over deteriorating standards of customer service at a time when it was increasing the price of gas and electricity.

The Sunday Times Money section led the campaign in highlighting its shortcomings, with hundreds of readers writing in to complain about incorrect bills. It is estimated that British Gas lost 1m customers in 2006 alone.

The writ says the problems could be traced back to 2002, when Centrica engaged Accenture to provide a new IT system. Project Jupiter was to bring together British Gas’s electricity and gas-billing schemes into one system capable of handling 250,000 meter readings and 200,000 bills a day. The price was £317m, with Accenture being paid from the £397m in savings that British Gas expected from the new system over a decade.

Various glitches arose, but the two sides agreed a revised contract in March 2006 under which Accenture provided guarantees that a software upgrade would work.

According to Centrica, it did not.

Even though only a third of customer accounts were at first transferred to the system, problems began to surface.

Inboxes, electronic queues where work was allocated to staff, filled up to the extent that employees were taking an hour to log on to their computers.

There were a host of related errors, the writ claims. The system generated a high volume of “exceptions” – issues with accounts that required manual intervention – and staff found it difficult to trace the root problem, leading to exceptions starting to “breed”. Staff inboxes became overloaded, with the system loading up to 200,000 items.

As well as shortcomings with the software, Centrica claims that Accenture provided inadequate computer hardware, did not integrate the system properly and failed to design it to provide adequate management information.

“The rapid rate at which exceptions were raised meant that it was impossible to recruit and train enough additional staff to deal with the ever-burgeoning problem,” the group claims. “These problems inevitably caused Centrica’s level of customer service and satisfaction to reduce dramatically with damaging effects . . . and Centrica lost a substantial number of customer accounts . . . It has caused significant damage to the British Gas name,” the writ says.

In February 2007, Centrica formally notified Accenture that it was in breach of contract. The gas company alleges it took the consultant three months to deploy a small group to look at the problem.

“Ultimately, the Accenture UK team provided no material information or assistance whatever to Centrica.”

A British Gas spokesman said: “British Gas has been left with no option but to pursue legal redress against Accenture to compensate for its losses.”

An Accenture spokesman said that Centrica “conducted extensive testing” on the system before it was handed over. He added: “We are confident, based on the facts of the situation, that this claim is baseless and without merit. Accenture will vigorously defend the High Court proceedings.

“Accenture delivered the system at the end of 2005. The system we delivered met all of our commitments and the specifications that Centrica set; it was delivered on the agreed timeline and budget.”

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