The Register today reports that British Gas (aka Centrica) is taking legal action against international consulting firm Accenture after a total overhaul of their billing systems costing stg£300m resulted in customers being incorrectly billed (in some instances on multiple accounts – for one customer at the same address). British Gas claims that it has had to hire 2500 extra staff to work on fixing the problems. According to The Register, GB has already written off £200m resulting from customer complaints. This means that the minimum you should estimate for the total cost of non-quality here is a figure to the north of £500m sterling (Cost of implementation + costs of scrap and rework  = ‘First cut Cost of Non-Quality). For readers in the US, that is nearly US$1bn.

And that is BEFORE the lawyers get involved. And before you take into account the cost to British Gas of lost customer revenues when customers switch to a rival supplier to get away from the problems.

British Gas claim that Accenture are responsible for implementing  a system which didn’t work and which had “fundamental errors” in its design and implementation. Accenture, for its part, rejects the British Gas claims saying that:

“Centrica directed the design, build and implementation of the Jupiter system and insisted on many of the features they now find problematic. At their own choice, after extensive testing, in March 2006 Centrica took over total control over all aspects of the system about which they now complain and has operated the system themselves for over two years.”

Accenture will be ‘vigourously defending’ the High Court action. To translate this:

1. It’s in the English High Court (“ka-ching” says the lawyer’s cash register)
2. It will be an aggressive case (meaning lots of lawyers with cash registers going “ka-ching”).
3. Customers (of Accenture and/or British Gas) will wind up paying the price in the end (the ‘Lawyers who like to say “Ka-Ching”‘ will require paying).

So, is this an IQ Trainwreck?

Yes it is. There is a significant cost to British Gas already incurred, with further costs to arise for both British Gas and Accenture. However the real impact has been on British Gas customers, who have wrestled with incorrect billing issues and related frustrations since the system went live.

Andrew Brooks, (one of our IAIDQ members in the UK and a man with some experience in these types of projects it would seem) has a nice post on his blog about the real root cause here. He makes some very valid points about who was (or should have been) driving this particular train when it went off the rails. His short post is well worth a read.

Ultimately this speaks to the maturity of organisations when faced with an IQ Trainwreck… moderately mature organisations will look to themselves to see how their culture and management may have driven the train off the tracks. Immature organisations will seek to hold their contractors accountable. Very mature organisations… well, they’ll have made sure the tracks were laid and everyone knew what direction the train was going in before starting.