Npower calls in service partners after troubled SAP rollout disrupts billing systems

Update: Npower billing system “disaster” reponsible for £99m operating losses

Npower has been forced to bring in service provider partners to help resolve disruption to customer-facing systems after encountering problems with its large-scale SAP rollout.

Many of the energy provider’s 5.4 million customers began to experience problems as account details were transferred from legacy in-house systems onto an SAP platform in 2011. Issues included billing delays, problems with the creation of accounts and direct debit payment schemes not being set up properly. A backlog of complaints also created longer call waiting times, with regulator Ofgem highlighting a “serious deterioration in service levels" in the past year, prompting an apology from npower CEO Paul Massara.

The project was originally aimed at improving administration of millions of customer accounts, with the IT system covering billing, customer service and financial systems. IBM was contracted as the systems integrator for the project, with account migration reaching completion in August 2012.

However, Forrester analyst Duncan Jones said that the stakeholders should have expected to encounter some technical problems with such a large, transformative SAP project. As a result, customers, vendors and service partners need to ensure that project contracts give the flexibility needed to react to unplanned changes during and after the implementation process, he said.

"These are complex projects involving a lot of changes to the way that people are doing things, and there is risk involved that you have to mitigate," he said.

"They [npower] should have foreseen this, SAP should have foreseen this and IBM should have foreseen this."

An npower spokesperson said that the billing and account problems were the result of a number of "complex and varied issues” due to the size of the project, and the company is currently working to resolve the IT issues.

“Many of the problems we’ve had recently were caused when we transferred customer account details onto a new SAP computer system, as part of a wider business transformation programme,” npower told ComputerworldUK. “That's why we've apologised to our customers. We're working hard to address these issues and have them fixed by early 2014."

Npower declined to comment on what changes were made to the SAP platform by in-house teams after installation, and whether these were responsible for the disruption to customer services.

In order to deal with the ongoing problems, npower has looked to its implementation partners to support its own staff as it attempts to return services to normal. The company also signed a seven-year £120 million deal with Capita last month to provide both front office customer management and back office services, commencing in early 2014.

IBM declined to comment on the situation.

SAP confirmed that it is now assisting the energy provider in its bid to fix the platform.

“SAP understands that RWE npower has been and is continuing to make improvements to its customer services processes as part of an IT system transformation programme,” a spokesperson said. “We are in communication with the implementation partners and RWE npower in order to resolve the difficulties they are facing with this programme. Both RWE npower and the implementation partners can be assured of our support and assistance, should the need arise.”

Cosmetics maker Avon Products also encountered problems with its SAP implementation recently, halting a planned global rollout. The company noted in a regulatory filing that a pilot rollout in Canada caused "significant business disruption in that market, and did not show a clear return on investment".

Copyright © 2013 IDG Communications, Inc.

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