Case Study – Major European Energy Group
Our client is one of Europe's largest energy companies. With more than 40 operating companies in 22 territories globally, our client produces, manages and services the gas and electricity needs of some 20 million customers.
Our client maintains a heterogeneous IT platform for managing the complex tasks of billing and customer management across its 20+ European operating companies. Growth has primarily been as a result of acquisition and the resulting IT estate maintained by each operating company is disparate in age, technology used and quality.
Business Use Case
On 15 July 2015, the European Commission adopted the Communication on Delivering a New Deal for energy consumers ('New Deal'). Under the New Deal, by 2020 the competitive landscape for existing energy suppliers in Europe will change dramatically. Barriers to entry for new suppliers have been lowered, switching between suppliers will be made easier, transparency on tariffs has been mandated, profit margins are expected to come under pressure and competition is expected to increase substantially.
The new competitive landscape that will emerge in 2020 requires all the operating companies to be more agile, more innovative and to react faster to the new consumer and market demands. New products and services will need to be designed to broaden the engagement surface for consumers and increase the potential revenue streams for the group.
In order to meet the demands to increase agility, lower costs and deliver new products and services, a considerable program of investment in the IT estate was required. There were two strategic options:
- To invest in each individual operating company platform and make the necessary local changes to ensure the platform and supporting applications were sufficiently performant to embrace new market conditions.
- To develop, from scratch, a common operating platform across all European operations.
Our client chose Option 2.
Initial Business Response
In 2013, anticipating the introduction of New Deal, Accenture, the global management consultancy and Salesforce, a globally scaled CRM supplier were invited to produce a design for a new operating platform.
In December 2014, SalesAgility were invited to participate in a Proof on Concept to provide the CRM component (SuiteCRM) for an experimental open source operating platform. The POC ran until mid January 2015, a period of approximately six weeks. The POC ran separately and in parallel to the work being carried out by Salesforce and Accenture.
In March 2015, SalesAgility were invited to participate in an extended ten week Pilot. The purpose of the Pilot was to model seven complex business use cases through an open source operating stack that included SuiteCRM, an open source Billing and Invoicing component, an open source ecommerce component, open source ERP and an open source Business Process Manager component. Once again, the Pilot ran separately and in parallel to the work being carried out by Salesforce and Accenture.
In August 2015 it was decision time. A board of ten senior executives was convened to decide which option to pursue:
- Accenture and Salesforce whose teams had originally been tasked with producing the new operating platform. They had been working on a solution since 2013.
- The Open Source Operating Platform – the result of a little over sixteen weeks of work involving around six people from four open source companies.
It wasn't even close. The board split 8-2 to award the program of works to the Open Source Operating platform.
The board were impressed by the speed of innovation demonstrated by the open source solution providers, the interoperability between the applications and the richness of functionality of the open source applications. The project cost profile, the total cost of ownership profile and the ongoing freedom to innovate on the platform were also major considerations.
What happened next?
At the time of writing, February 2016, the project has been underway for four months. There are currently three teams of Business Analysts, engineers from both the client's own resources and from each open source company and a supporting cast of agile coaches, scrum masters and Angular experts. A fourth team is expected to be introduced in mid 2016.
The project is proceeding on time and the degree of collaboration between members of the teams is high (which is second nature in open source).