Origin Energy plans Integral cutover to SAP

Finishes its own retail transformation.

Origin Energy is planning to migrate customers of its Integral Energy and Country Energy businesses onto an SAP billing platform.

The energy giant completed the migration of 2.6 million of its own customers onto the new SAP system in the financial year ended June 30, capping a project that started back in 2008.

"We completed a project we've been working on for the past four-to-five years," Origin Energy managing director Grant King said.

"We're now in [a] stabilisation phase and moving towards really getting the benefits of that implementation."

Origin bought the retail arms of Integral Energy and Country Energy from the NSW Government in December 2010.

"The Integral and Country Energy businesses ... will of course be integrated across onto that SAP platform," King said.

"[That will] give us a very competitive position both in terms of the service we can offer customers and also our cost to serve [them]."

Cost to serve reductions were led by improved online self-service capabilities, and the introduction of electronic billing and payment options.

Integral Energy's customers are expected to be migrated onto SAP in "early 2013".

The migration of Country Energy is "to follow" Integral, though no specific timeframe was discussed.

Reduces churn

The SAP aspect of Origin's retail transformation was handled by outsourcer Wipro, which also took in "about 30 percent of Origin Retail's base of 1400 employees and contractors", according to a case study. (pdf)

As of March 2010, this included about 240 of Origin's 396 IT staff, along with staff involved in "back office processing positions".

Origin said this week that the SAP program would improve its retail customer experience "through [a] single view of the customer and greater system capability, enabling better customer insight and [the] ability to offer tailored solutions".

"This translates to more efficient and effective service and sales."

Focus on the completion of the retail transformation meant that marketing activities to attract new customers during the period had been "restricted".

However, since all of Origin's customers had been brought onto the SAP system, the energy firm had seen a decline in customer churn rates.

Where Origin saw a net loss of 112,000 customers for the first half of financial year 2012, its second half net loss was 48,000.

"It's a very substantial reduction in our churn rate," King said.

"At the end of the day, we're comfortable that having completed the implementation of our retail billing system SAP, we are now going through that process of stabilisation.

"We are introducing new products, better competitive products, we're more responsive in our call centres, and we know by virtue of our activity in the second half, that we can dial up or down that customer win number through time pretty much as we want."

King said that Origin Energy had also spent money on "system changes to be able to include costs of carbon" in its billing systems.

Competitor AGL this week also credited an SAP rollout in its consumer business for cutting its ratio of bad debts to revenue and reducing its number of overdue invoices.

AGL hoped to drive more efficiencies from its business accounts after migrating 22,000 business customers to the SAP billing platform in the most recent financial year.