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30 November 2018 4 min read

The triple challenge for a utilities company

How can a utilities company perform in the first quartile for cost and customer service, and at the same time adhere to regulatory demands?


In an increasingly competitive energy market, utilities companies’ cost-to-serve and compliance with regulatory requirements are under significant levels of scrutiny. Winners in this market need to adopt a customer-centric approach while removing complexity, creating lean operating models, and simplifying products and processes whilst adhering to regulatory demands.

Client requirement
British Gas’ aspiration is to perform in the first quartile for cost and customer service. It became increasingly aware that incremental and ad-hoc change programmes would no longer deliver the impact that was required to be a competitive player in the energy market. To achieve this, a fundamental transformation of British Gas’ back and front office operations was necessary, whilst ensuring compliance with Ofgem and FCA regulations.

Baringa’s role
Baringa’s role was a combination of providing strategic direction and advice, developing business cases and plans, and overseeing execution against plan.

We supported British Gas with the transformation of its customer operations, design and mobilisation of a portfolio of programmes that would deliver £50m OPEX savings in benefits in year 1, the first stage of a transformation that will reduce the cost base by 70%.

Once the six programmes of change had been scoped, Baringa took on the overall strategic
management role and took a lead on four of the six programmes where specific SME experience was required.

Our role has continued into year two and beyond, with these programmes becoming the delivery vehicles for the five-year strategic transformation of British Gas. We continue to support British Gas’ longer term strategic transformation roadmap that will take the business through to 2021.

Outcomes and Impact

  • Delivered cost savings of 70% of current OPEX (£50m)
  • Developed and enhanced business strategy in support of delivery of British Gas’ goals
  • Appraised business structures, business architecture, operating models, and business performance measurement
  • Developed the business case including performance metrics for measureable achievement of benefits and alignment of stakeholder aims
  • Business process reengineering to achieve step-change in performance
  • Change management and regulatory advice
 
Stuart Beeston, UK Change Delivery Director, British Gas
“Baringa has supported us for a number of years with the transformation of our customer operations function. It is one thing creating a change in behaviour but it is another thing embedding it and sustaining it. I unreservedly recommend Baringa to every company looking for a partner on their transformation journey.”
 
Ellen Fraser, Partner, Baringa
“It has been a pleasure to work with British Gas over the last few years – bringing our experience to bear while being involved in shaping and delivering a strategic transformation of this scale and complexity is a real privilege. We’re delighted with what we’ve achieved as a team and hope that our partnership will flourish as we continue to deliver for BG’s customers.”