CGI wins £20m electricity industry BPO contract

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Outsourcer’s deal will help smart meter roll-out and comes after water industry contract win too

CGI has won a £20 million three year contract, including a two year extension option, with ELEXON, the industry-funded company that administers the wholesale electricity balancing and settlement arrangements for the UK.

CGI has been providing business process and IT outsourcing services to ELEXON for the last 15 years and under the terms of this new agreement CGI will operate, maintain and manage all ELEXON’s core applications, whilst migrating them to its cloud in order to deliver increased flexibility and scalability.

ELEXON currently handles large amounts of data including settlement of over 5,700 daily wholesale electricity trades, 1.25 million daily meter readings and settlement of over £1.4 billion of customer funds annually.

auditing software finance deal agreement contractThe electricity industry is preparing for the introduction of smart meters in the UK, which may mean ELEXON’s settlement processes move from an estimated model to one that works based on actual, near real-time consumption data. Similarly, European regulators are considering new rules that could see wholesale electricity settlement applied to 15-minute increments rather than the 30-minute increments currently used in the UK.

Such potential changes in the industry mean that ELEXON needed a flexible and scalable core IT infrastructure to support its core applications.

Mark Bygraves, CEO of ELEXON, said: “The UK electricity market is undergoing critical changes that mean we, as a key partner to the wholesale industry, need to invest in our core IT infrastructure to continue delivering outstanding service.”

He said: “This outsourced agreement with CGI provides significant expertise, capability and a modern, scalable infrastructure at highly competitive rates. We will save over £1 million annually in our fixed IT running costs, which is great news for our customers and demonstrates ELEXON’s ability to continue to deliver value for money to the industry.”

As part of the agreement CGI will deliver a wide range of outsourced IT and business process services including provision of ELEXON’s customer service desk, central market industry processes and end of day settlement processes, infrastructure and network hosting and application management and development services.

Tara McGeehan, vice president of UK energy, utilities and telecommunications at CGI, said: “Our core competency in managing, maintaining and improving complex applications combined with the highly scalable nature of our cloud offering together with our deep industry knowledge, means we are well placed to help ELEXON prepare for a period of significant change in the UK electricity sector.”

CGI recently announced it has been contracted to build and manage the central market infrastructure for the UK water sector by Market Operator Services, the company established by the government to facilitate the introduction of competition to the UK water market. CGI is also the IT partner for the Data Communications Company, the body supporting the UK-wide introduction of smart meters by linking them to the IT systems of the UK’s energy companies.

Earlier this year, CGI was selected by City of Edinburgh Council to provide outsourced ICT services to support the council’s introduction of integrated digital services. The contract, valued at £186 million, is designed to deliver anticipated efficiency and cost savings of £45 million over the seven year term, said the council.

@AntonySavvas