Problems following SAP CRM migration prompts 95% loss in British Gas operating profit

British Gas Business has suffered a 95 percent loss in operating profit during the first half of this year, following a transition to a new SAP billing and CRM system.

The utility firm said in its profit announcement this morning: "British Gas Business was impacted by issues following the implementation of a new billing and CRM system in 2014, which has resulted in significant delays to issuing customer bills. 

"As a result, we incurred an increased bad debt charge and additional costs associated with extra resource required to help resolve the issues...the utility only made a small profit in the first half of 2015, significantly lower than in the first half of 2014."

British Gas said that the billing problems occured after migrating 500,000 business customer accounts to the SAP software. It admitted that there are still “significant delays in issuing customer bills” in its B2B unit.

In a separate migration project, British Gas moved over 34 million residential customer accounts to an integrated SAP billing system and CRM platform, its CIO told ComputerworldUK last year. The accounts were migrated from the legacy Siebel CRM in September bar a few “complex customers”, CIO David Cooper said.

Following the CRM migration for its residential customers, British Gas' data team were left to join the 500,000 duplicate customer records in its data lake, a project that its director of insight and data decribed as a "very painful process".

Connected Homes gets £500m investment

The company’s Connected Homes unit had a more positive start to 2015. The firm said it would invest £500 million in operating costs and expenditure in connected homes’ activity over the next five years.

Hive: smart thermostat

British Gas recently acquired AlertMe, the platform it used to create its Hive connected thermostats and smart home products. It already held a 21 percent stake, and paid an extra £42 million to buy it out.

Hive is planning on opening a gateway to its new IoT platform Honeycomb, which was built on AlertMe's technology. This will enable developers and third party device makers to integrate with its smart energy appliances, its CTO told Techworld.

It said it had sold 200,000 smart thermostats in total and has its ‘connected boiler’ project on commercial trial at present.

Smart meter scheme

British Gas said it had installed more smart meters “than any of our competitors”, in 1.5 million homes. Smart meters are a separate entity to the Connected Homes' Hive thermostats. The UK government has required all utility companies to install smart meters in every UK home and business by 2020, a project that has been widely criticised - and delayed.

However, over 60,000 of British Gas' customers with smart meters receive ‘my energy’ reports from their devices, which gives a breakdown of their energy consumption and energy saving tips.

It is also trialling a mobile app called ‘my energy live’, which allows customers to access the smart meter display functions from their smartphone. British Gas said it would provide “significant enhancements” for this app over the next year.

Copyright © 2015 IDG Communications, Inc.

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