ELEXON firms up relationships with transparency and trust

"Transparency is a fantastic way of building trust." Peter Davies, Head of Service Delivery, ELEXON

About ELEXON
ELEXON is at the heart of the UK’s electricity supply and distribution industry.They administer the Balancing and Settlement Code, which governs the wholesale electricity balancing and settlement arrangements for the UK. This touches some 27 million customers and every company in the electricity energy market.

What ELEXON needed
In 1999, Logica won a contract to design, build and operate the central services supporting the New Electricity Trading Arrangements (NETA) in England and Wales. The systems went live in 2001 and were so successful that these were extended to cover the whole of Britain four years later.

In 2007, ELEXON saw a natural split in business process systems hosting and operations, and applications management and development. They decided, therefore, to draw up two new contracts, one for each area.

ELEXON revisited their relationships with suppliers.Until then, these focused on suppliers having to deliver to the terms of a contract, backed-up by some very demanding SLAs. "Looking ahead," says Hayley Weir, Head of Commerical and Procurement, "we concluded it would be impossible for us to meet our customers’ needs for continuous improvement without changing the nature of our relationship with our service provider. The original contract gave rise to a supplier silo mentality focused purely on defined transactions. Moving forward we needed a more partnering culture, founded on the premise of working together to deliver greater value."

Our answer
In 2007, ELEXON sent out a competitive tender for hosting and operations. While our work with them had proven our technical know-how, we explained to ELEXON that we were keen to get closer to them and to work with them more as part of the team than as a supplier.

In 2008, we were awarded a five-year contract worth £39 million for the business process outsourcing, hosting and communications aspects of the British Electricity Balancing and Settlement Systems. Business processing areas include financial funds administration of £1billion per year, and reading over 2,000 meters that measure specific energy flows across the national grid.

A Success story
With the new contract, we’ve been able to slash 40 per cent of operational costs. It also drives and rewards innovation for ELEXON and Logica in several ways.

A monthly Innovation Forum has been set up where joint ELEXON and Logica teams present their ideas for service improvement and cost reduction. "It’s a chance for people to step away from their day jobs and to come together to look at things differently," explains Peter. "It’s encouraging people to think laterally and is delivering the sort of ideas that we hope will translate into bottom-line savings." This Innovation Forum has produced a pipeline of great ideas for improving things – from providing operational information online to creating the best possible business processes.

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