In the energy industry today, the inevitable squeeze on profit margins and need to become even more cost efficient is driving companies to rethink their system providers.
Reducing failures in processes, cutting down servicing time, adding self-serve benefits for customers, and smarter automation are all achievable with the technology now available. However, many Energy companies have tried to make the move to new platforms and seen a significant impact for the worse.
OFGEM has issued numerous supplier fines for IT failures over the years, equating to £millions. Even without the added cost of a fine, several suppliers have seen their migration plans paused and extended by months.
The admirably low cost to serve of some challenger energy companies may be seen as a good example of what new technology can achieve, but the industry is inherently complex with industry processes, regulatory requirements and metering options.
New systems have not yet been proven to handle it all, becoming more apparent as these suppliers grow, or attempt to migrate existing customer bases through SOLR (supplier of last resort). This is undoubtedly contributing to some of the recent market exits, where costs of servicing became untenable.
The risk is also carried by system integrators and providers, whose reputation and commercial outcomes are drastically affected by the examples of their performance and customer testimony, either positively or negatively.
Yet the answer is yes, it is possible to avoid the many pitfalls of migration with the right planning, and our experience at BFY Group has given us unique insight to how.
So what must be done to make a migration successful?
There are 5 key steps to a successful migration:
1. Consider the customers
2. Design a migration journey that fits with the desired approach
3. Think about what a migration will mean for the operational teams and resource accordingly
4. Work closely with technical teams to define what is acceptable as a minimum
5. Engage your people in the whole thing
Consider the customers
Every energy supplier has driven the size and shape of their base through their own strategy. This might be payment mix, product mix, or servicing requirements through customer expectations or meter set up.
Look in detail at the make up of your customer data and consider what this means for a technical migration. Use this understanding of customers when building requirements for a new system, there is no one size fits all system out there so expect to have to build or customise some things to work for your base.
Alternatively, a new customer strategy may become clear that no longer includes some of the existing base, but this isn’t without financial impact if considering a new sales strategy or book sale.
Design a migration journey that fits with the desired approach
If you want to migrate in the background, consider what may trigger customer demand and mitigate it. If you want to engage customers, then a positive communication plan to create an action will be key.
Changes that will be visible to customers need to be clearly explained as anything left unclear will likely cause customers to get in touch or raise complaints.
Think about what a migration will mean for the operational teams and resource accordingly
Before migrating its likely some customer accounts will need to be cleansed to be fit for a technical migration process, and there may be failures or visible changes that trigger customer demand.
Even if things go well its likely that operational support will be needed to test, review and fix accounts. Handling a migration process and then being overwhelmed by servicing demands will highlight failures very quickly!
Work closely with technical teams to define what is acceptable as a minimum
Whilst there are many methods of technical delivery, not one of them should compromise what you need to offer as a supplier in its most basic form. Can you load a customer into the new system? Yes, great. Can you issue a bill and take a payment for it? If the answer is no or not known, consider the impact this could have.
Maybe meter exchanges can wait for delivery, but revenue and cash is integral to a businesses success and is most likely to cause problems if not delivered as expected. This includes debt, complaints and significant risk of regulator interest, as seen previously. Things will go wrong, but a hand in hand partnership between technical and operational teams is crucial.
Lastly, engage your people in the whole thing
All of the teams’ experience, knowledge, loyalty and customer passion will be needed to get through a successful migration, so bring them along the journey. Even though migration may look and feel very technical, it’s the people that need to use the systems that will be critical in making it work.
Every migration has its ups and downs, so staying motivated in the face of tough challenges can be difficult. Remember to appreciate everyone’s efforts and keep refreshed throughout the marathon that is migration.
Case study: We supported a large energy supplier with the migration of its customer base to a new system provider, identifying ~£1m of cost avoidance opportunity during the process. Read more
To find out more about planning a customer system migration and the key to success, contact Jonathan Paton today
Jon specialises in Customer Operations leadership, customer contact, and operational service delivery transformation/improvement.View Profile