SAP upgrade wipes out Npower profit

Npower has become the second utilities giant in less than a fortnight to blame a botched migration to a SAP system for a fall in profits and a tsunami of customer complaints.
The issue dates back to 2011, when IBM began to switch from legacy in-house systems onto a SAP platform.
Many of Npower’s 5.4 million customers began to experience billing delays, cancelled direct debits and some customer accounts were never set up.
Problems have persisted for almost four years, and Npower said it hoped to fix its customer billing systems by July last year, although this did not prevent the company from becoming the most complained about energy firm last year.
Now it has blamed the issue for a 60% drop in earnings during the first half of this year.
Npower chief executive Paul Massara said: “The main part of our drop in profits has been due to the continued impact of the systems issues that hit our domestic business last year. The challenges that we have faced were tougher than we expected but we know what the problems are and are taking the right steps to fix them.”
Like most energy firms, Npower’s charge sheet is as long as your arm; over the past five years it has been fined more than £3.8m by Ofgem for a catalogue of offences, including silent calls and mis-selling, while it also had to repay £70m to 2 million customers after another fiasco.
The company recently implemented a new customer engagement platform from Rant & Rave in an effort to get customers back on side, support by an ad campaign devised by McCann Manchester and fronted by Omid Djalili promoting “jargon-free” bills (pictured).
Earlier this month British Gas’ business division revealed 95% loss in operating profit during the first half of this year following a botched implementation of a new CRM and billing system, also provided by SAP.
At the time it said: “As a result, we incurred an increased bad debt charge and additional costs associated with extra resource required to help resolve the issues…”