The bilateral transactions programme has delivered considerably higher efficiency savings and more customer benefits than anticipated in the full business case.
That is the conclusion of MOSL’s final assessment of the Ofwat-mandated phase of the programme, which was successfully completed at the end of November 2022.
Following the introduction of the hub, MOSL estimates the programme is generating more than 120,000 hours in efficiency savings across the 16 processes that are now hub.
At a notional £20 per hour, this equates to financial savings of around £2.4 million per annum (at 2020/21 prices) – double the ‘mid-case’ estimate of £1.2 million savings anticipated in the business case. The savings include £340k of benefits identified during the delivery of the programme.
As well as efficiency savings, the report also identifies a range of benefits for customers, from faster, more reliably processing of requests and better handling of enquiries to a reduction in the number of manual input errors due to an increase in the number of fields that are automatically completed.
The total cost of the programme up to the end of November 2022 was £4.1m, 39 per cent higher than anticipated. This was principally due to trading parties’ request to accelerate the rollout and include additional functionality. Higher costs were more than offset by benefits, however.
Following trading parties’ approval of the MOSL Business Plan for 2023/24, work is now underway to standardise the remaining bilateral processes and add them to the central hub; a process that will take two years and which is anticipated to deliver a further £1.1m in efficiency savings per year.
Commenting on the results, John Gilbert, Programme Director, said: “Prior to introducing the hub we worked with trading parties to understand how long it took to carry out bilateral processes.
“Thanks to this data, we can say with confidence that the bilateral hub has transformed the speed and reliability of the processes we have delivered so far. In doing so, the hub is generating substantial efficiency savings year-on-year.
“But most importantly, this massive ‘behind the scenes’ effort by trading parties across the market has quietly revolutionised the way bilateral processes are handled, meaning that customers should increasingly be receiving the speed and quality of service they expect and deserve.
“We look forward to working with trading parties over the next two years to implement the remaining processes so that they, and customers, can enjoy the same benefits across all bilateral processes and wholesalers can finally de-commission their existing legacy systems.”
The full benefit realisation analysis is available here.
