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Case study

Ofgem readies new energy switching programme

Energy regulator Ofgem aims to dramatically overhaul how UK consumers control and switch their gas and electricity services. Working together, we are coordinating a programme to support fast, integrated and seamless switching that covers more than 120 energy providers and 50 million customers

The challenge

The UK’s retail energy system is about to undergo a massive change – a change larger than any since privatisation took place more than 25 years ago.

Energy regulator Ofgem’s goal is to transform the consumer experience by creating a unified gas and electricity platform that enables people to switch energy providers within one day of requesting a change. Currently, such changes can take more than two weeks or can involve complications and errors that affect consumer satisfaction. Achieving this means working with more than 120 gas and electricity parties across the UK, and changing systems and processes that impact more than 50 million consumers.

As the Switching Programme Coordinator, we have worked on few other projects or engagements that rival this one for scale. We are responsible for running the Programme Management Office and coordinating progress and communications with Ofgem and across the industry as well as providing advice to the Ofgem Senior Responsible Officer (SRO). This includes assessing and mitigating potential reputational and operational risks, such as challenges arising from COVID-19 that might impact programme deadlines or the desired consumer outcomes.

Underpinned by new regulation, in the form of the Retail Energy Code (REC), Ofgem’s Switching Programme was launched in 2016 and is set to go live in the middle of 2022. As well as giving consumers more choice and control, it aims to promote greater innovation and competition in the nation’s energy sector.

The approach

With so many different energy parties of different types and sizes, it’s vital that every organisation stays on track and is prepared for when the Switching Programme goes live. Having previously worked on Project Nexus, Ofgem’s most recent other major transformation project in the gas sector, we knew it was important to take a methodical, consultative approach to ensure everyone understands the project timelines and is working towards a common goal.

Transparency is also critical in giving both consumers and energy parties confidence the new system will be fair and effective.

We designed an engagement strategy that prioritises regular and transparent communication with all programme stakeholders. For example, Ofgem and all energy parties now use the cloud-based Salesforce Community platform to access information and provide the Programme with real-time information on their progress. This ensures fair, consistent communication with organisations, no matter how big or small they are, and makes the project management team more efficient and accountable, which is a key challenge on a transformation of this scale.

The online Salesforce Community Portal provides access to FAQs, guidance documents, common sets of data and self-service capabilities. This supports our comprehensive governance model, which requires fully auditable data trails for future reviews and compliance requirements. Surveys and Readiness Assessments in the online community ensure Ofgem is kept informed of ongoing issues and concerns. We also engage with a variety of industry working groups to help with this.

As part of our responsibilities in the Switching programme, we stay alert to potential risks and advise Ofgem on strategies to avoid these. From March 2020 onwards, this included helping to manage COVID-19-related challenges that might have slowed the programme’s progress. A critical element to success was a shared commitment to transparency across the industry – alongside Ofgem we had many in-depth conversations with parties about their portfolio issues, such as management of vulnerable customers, and helped to ensure these challenges were incorporated into the Programme activity to minimise any complications and keep everything on track. Based on what was learned about each organisation’s specific risks, we were able to reschedule them within a tranched approach to the testing phase. This gave parties facing greater challenges the confidence of knowing they would have more time to deal with the pandemic’s impacts while also being able to meet the programme’s required timelines.

Alongside managing programmatic risks and those associated with particular workstreams, we established a strategic risk management process for the overall programme. This considers the extent of change, progress indicators and external factors affecting the sector. Our risk dashboard is used on a weekly basis to drive discussions and deep dives on risk mitigation approaches.

Finally, we led a full programme review to ensure that everyone with a stake in the outcome had input in the process, while open Webex discussions and fortnightly Q&A sessions provide an opportunity to directly and transparently address people’s concerns. This enabled Ofgem to recalibrate the programme to accommodate stakeholder needs and build confidence across the industry that the plan could be delivered.

The next steps

Testing of the new switching Central Switching Solution (CSS) commenced on 10 May 2021, which was an important milestone towards Ofgem’s goal of reinventing the consumer experience. Moving on to this stage will involve staying alert to a number of potential risks and making sure the solution works as intended. As the programme progresses, we have a process to assess each energy party's readiness to move on to the next phase. That process involves gathering empirical evidence on an ongoing basis to ensure adequate data for decision making and managing risk, including reputational risk to Ofgem. Current evidence shows that over 90% of participants say they are ready for the testing phase.

After testing is completed, the programme moves on to the transition stage. Managing this successfully involves more than just technical readiness: we have developed a number of criteria spanning technical and business readiness considerations that energy parties will need to meet when evaluating their business preparedness. These also include considerations of consumer needs, as the programme has set out high-level expectations.

“Ofgem is committed to promoting competition and innovation in the gas and electricity market and wants to empower consumers and put them in the driving seat so they can make the best choices on their energy with confidence.”

Rachel ClarkSRO of the Switching Programme, Ofgem

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