Utility benefits from better billing and IT systems

Client Results Story

Opportunity
Our client, a leading gas and electricity retailer in a major national market, had grown in recent years through several acquisitions, the most recent of which increased the number of customers by 50%. Despite increasing customers, the client had not been able to realize scale economies in its operations, with IT costs and overall operating costs rising steadily on a per customer basis.

A range of IT-related problems suggested an overall misalignment with business priorities:
  • Some 'business critical' capabilities missing or incomplete, resulting in constraints on market strategy, revenue loss, and several slow and expensive manual workarounds
  • Daunting workload for IT/Solutions team, consisting of ~1,600 projects in a 3-5 year program of major work, most of which related to 'business basics' vs. value-added capabilities
  • Weak alignment of IT/project investment with business priorities, and an unclear project prioritization process and criteria
  • Poor record of on-time/on-function delivery of IT projects, and low confidence over future delivery dates
  • Important business risks emerging
The client asked Bain to advise GasCo how to align its IT resources and investments to:
  • Capture the benefits of scale
  • Support and enable the attraction and/or retention of valuable customers
  • Reduce risks to base business performance

View Approach

Approach
Bain set up several steps to analyze and identify the best IT effort for the client.

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View Recommendations

Recommendations
Bain recommended the following actions:
  • Establish clear decision making processes and accountabilities
  • Rationalize the project slate to focus on a number of potential major projects
  • Implement a range of budgetary controls
  • Define a "target architecture" for processes and IT
Bain also recommended an approach to fundamentally improve the billing architecture, built around 'shared and common' elements. For migration options, Bain recommended system-based migration, which balances the quickest capture of benefits with the level of risk.

The Single Billing System will:

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View Results

Results
Bain estimates the benefit for billing migration at more than $130 million in present value.  This estimate is built from a range of reliable sources, including bottom-up work with the client's IT team and external input from Gartner's industry database.

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