West coast utilities give power to outsourcers

Adding to the recent trend of energy companies outsourcing their operations, BC Gas Inc. and Enbridge Inc. have turned over their customer management services to Accenture Canada.

The Accenture deal, announced late last week, is rooted in a one-year-old joint venture from BC Gas and Enbridge called CustomerWorks Limited Partnership. The 1,100 employees and operations of CustomerWorks LP will be handed over to Accenture and will now operate under the name CustomerWorks Inc.

“”Both of these companies are looking at how they can focus on their core business, which is really transportation and distribution of energy,”” said Dwight Willett, former Enbridge executive and CEO of CustomerWorks Inc. “”They’ve taken a fairly conservative (path) compared to some of the companies that are in trouble.”” Willett made reference to the now infamous Enron, which expanded beyond its energy business into trading.

As part of the deal, CustomerWorks Inc. becomes a wholly-owned subsidiary of Accenture and will service 750,000 BC Gas customers and 1.6 million Enbridge Consumers Gas in Ontario. Those services include meter reading management, credit collections functions and customer call centre operations.

There are no immediate plans to add more services to that roster, said Willett, but debt management services and a greater emphasis on outbound call centre functions may be included in the future. One of the reasons BC Gas and Enbridge decided to turn the business over to Accenture was the possibility of increasing its service levels, he added. CustomerWorks LLP will continue to exist as a holding company for assets and existing customer contracts.

The BC Gas-Enbridge deal was the second of its kind in less than a week for Accenture. The company signed a similar but broader agreement with BC Hydro to take over its customer services, IT, human resources, financial systems, purchasing, disbursement services, property services and business services. A new company will be created to handle those operations, tentatively called BC Hub.

Both BC Hub and CustomerWorks Inc. will be seeking new utility customers across North America. “”We decided after our IPO (initial public offer) about a year ago that if there is one industry that is really ripe for a really aggressive services business, it was utilities,”” said Bill Morris, managing partner of resources for Accenture Canada.

“”If you look across North America, there are about 300 or 400 utilities. They all have call centres, they all have CIS systems and every five years they have to go through a painful exercise of renewing that technology,”” he added.

The number of deregulating energy markets has provided numerous opportunities for outsourcers to offer their services. Earlier this year, for example, Cap Gemini Ernst and Young bought Ontario Power Generation’s (OPG) stake in the company they jointly formed last year to handle IT operations.

The Canadian market may actually be tapped out now, said IDC Canada Ltd. analyst Jason Bremner. With OPG, New Brunswick Power, Hydro Quebec and now BC Hydro, BC Gas and Enbridge attached to outsourcing deals, there isn’t much left.

“”You might see possibly one or two more selective outsourcing deals in the next six months,”” said Bremner, but the biggest market belongs to the U.S.

While Morris said “”there certainly is more to be done in Canada,”” he identified the U.S., with its favourable exchange rates, as the next logical place for Accenture to go.

Comment: info@itbusiness.ca

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