EDF Energy's BI&T managing director Nigel Stevens tells Steve Hobson why IT now is so much more than just a suite of software applications.

The post of information technology director at any utility can be something of a poisoned chalice. One former water company IT director once told a Utility Week journalist that nothing would get him the sack quicker than introducing a new billing system that failed to bill accurately and on time.

Yet pressure to replace ageing legacy billing engines is becoming intense as improving customer service becomes ever more important and smart metering looms on the horizon.

Nigel Stevens took over as managing director for BI&T (business improvement and technology) at EDF Energy at the start of 2008. He succeeded Benoit Laclau, who has been put in charge of the energy company's business transformation programme and SAP rollout, known as Programme Orchard. A major focus for Stevens will be EDF Energy's billing and customer relationship management (CRM) systems, described merely as "adequate" last year by the company's chief operating officer of the Customers Branch, Eva Eisenschimmel.

While Stevens and Laclau work closely together, Stevens deflects all questions specifically relating to the billing and CRM project to Laclau. "We have taken it to one side and said it is important enough to put our previous BI&T managing director on the case," he says. "We are investigating further investment in those areas and our chief executive has asked Benoit to do that."

With that proviso, Stevens explains the broad role of EDF Energy's BI&T organisation is "to be able handle all the things that go on in the industry at any point in time".
"I think we are unique in the way we have set our stall out," he says. "We call ourselves 'business improvement and technology', rather than 'IT', and we have an organisation that can handle whatever comes along, be it smart metering, investment in billing and CRM or network price reviews.

Track record
"We looked at our competitors and the general utility track record in project delivery, which is sometimes good and sometimes not so good. We are always facing massive changes and we have been bold and brave to set ourselves up such that my role encompasses both business change and IT."

While Stevens accepts that delivery of all non-engineering projects is "all with me", EDF Energy as a company tries to ensure its IT projects are led by the operational business units involved rather than by the IT department. It is a model that has proved successful in the implementation of utility IT projects elsewhere.

"In no way have we taken the agenda away from the business and they decide what they want," says Stevens. "But we do have one centre of excellence with all the right professionals in one place and over the past two or three years we are starting to see the fruits of their labour."

This approach has seen all IT and business change staff that in the past might have been dedicated to one part of the business pulled together into a single identifiable division.

"We have people who have worked on IT projects and business change in a customer environment for 20 years and in the new model they are a pooled, flexible resource that can be deployed on any project across our business," he says. "That has opened up opportunities in different parts of the utility business that they haven't seen before."

Matrix structure
Over the past couple of years, the department has also moved away from traditional hierarchical reporting lines to a more modern matrix structure.

"We have done away with line reporting, so people are assigned to work as it comes in from our customers, and we need to shift resources flexibly as demand changes," says Stevens. "The branch chief operating officers prioritise where they need the business to go, and to deliver that we have invested heavily in improving the skills of our internal capability as well as supplementing that with good external relationships with strategic partners."

With £70 million a year earmarked for IT spend across the business, the most significant limit on the rate of investment in new systems is not money or the resources Stevens can call upon, but rather the rate of change the business can absorb.

While Customers Branch will clearly be a major element in Laclau's business transformation programme, IT upgrades are also in hand at the Networks and Energy branches. "The focus is on retail for Eva at Customer Branch, but for networks it is on the distribution price control and at energy the emphasis is on relocation to Cardinal Place to be closer to EDF Trading," explains Stevens. "They all place very stretching demands on us at any point in time."

SAP platform
The decision to follow the example of a growing number of utilities and choose SAP for its business transformation programme was based on many factors. "I think it was a wise choice in going for a leader in this technology, but this is about the business and where it is going, not about a system or technology," says Stevens. "I'm not saying the technology is an afterthought or that the system isn't critical to delivery. There is a balance to be struck between vanilla, out of the packet software and a heavily customised, bespoke system, and finding that balance is difficult.
"We are setting out a technology road map that is partly driven by the group, because we are trying to operate more as a group now and that includes stronger collaboration on technology. But I keep saying we mustn't think of this as a technology programme. It all comes back to what we are trying to achieve as a business."

Looking ahead, service-oriented architecture (SOA) is an "important concept" for EDF Energy and will be the preferred approach for new applications development. SOA means building software applications to provide specific services, which can then be combined in a flexible way, rather than "hard wiring" functions into single applications that are then difficult and expensive to change. EDF Energy's strategy is to evolve towards an SOA approach in areas such as human resources, finance and procurement rather than re-engineer existing systems.

Coherent structure
Stevens admits he is fortunate to have inherited a coherent IT infrastructure as a result of decisions taken soon after the merger between regional electricity companies Seeboard, LEB and Sweb under the EDF Energy banner.
"We still have some rationalisation of legacy systems to do, but from the top down they made exceptionally well advised choices early on about integration," he says. "We very quickly moved to a harmonised position with our core strategic systems. LEB had been investing in CRM, so that was a natural choice for us, and all EDF Energy customers were migrated very successfully."

Currently, billing is by a single bespoke mainframe engine for both gas and electricity customers with a standalone Siebel CRM layer running on top. "While we know we need to make investments for the future, generally those systems are standing up well and our call centre agents remain well equipped to deal with queries," says Stevens.

Discussions over a national rollout of domestic smart metering seem to rumble on for ever, and while preparing for this billing revolution clearly plays a big part in EDF Energy's future IT plans, Stevens says it is far from the only driver.
"I wish things were that simple," he says. "We are in an extremely dynamic business that is under all kinds of pressures. Some are competitive - the system is ageing and we need to keep our costs down, so there are a number of different drivers.
"I wouldn't say smart metering is the main driver but it is coming along and it is extremely onerous from a data perspective."

As well as generating huge amounts of information on energy consumption, smart metering will enable energy suppliers to develop innovative tariffs and offers by enabling two-way communications with meters.

"Data is not only provided from the customer but there will be an opportunity for us to push to the customer," he says. "We have barely scratched the surface of what those opportunities are. From a technology point of view there is a lot to do if smart metering comes in the next decade."

Comments

Sign up to our free email newsletters