Robert Pryor - Capgemini Energy LP

Robert Pryor - Capgemini Energy LPCapgemini CEO Chell Smith foresees a day when utility companies — under pressure to reduce costs — turn to outside providers to manage their back-office processes. In May 2004, Capgemini took a first, dramatic step toward that goal by forming Capgemini Energy LP, a joint venture with TXU Corp. that began when the consulting firm won a 10-year contract to manage back-office operations for the energy giant — the largest business process outsourcing deal in the history of the utility industry.

The man charged with leading Capgemini’s foray into utility industry BPO is Bob Pryor — a high-energy, risk-taking veteran who joined then–Ernst & Young in 1997.

Pryor’s personality proved to be a perfect match for TXU’s new CEO, C. John Wilder, who arrived in February 2004 with a bold strategy for reinventing the Dallas-based company.

In just six weeks, Pryor’s team proposed, presented, and won a $3.5 billion contract to provide all information technology, human resources, finance, accounting, revenue management, and customer care services to TXU. Just 45 days later, the joint venture, Capgemini Energy LP, was born. Some 2,700 employees were transferred to the new operation, as well as 600 third-party contracts from TXU — with the goal of improving customer service levels and reducing SG&A costs by 30 percent, or about $150 million a year.

“It spanned completely across all the company,” he recalls. “We needed to have a really good solution — an incredible plan not only for managing, transforming, and running it, but also to not disrupt TXU or screw up the fundamental day-to-day operations.”

As of April 2005, Pryor’s team has accomplished most of its goals and achieved a 98 percent success rate according to 30 key performance indicators. For instance, cash flow increased by 25 percent and call center response time was cut from 300 seconds to an average of 11 seconds.

But those successes didn’t come without sacrifice. Some 600 positions were eliminated, and another 500 employees were moved to other Capgemini centers as part of the transformation. Pryor managed the tough times with a policy of transparency.

“Since Capgemini Energy’s inception, we’ve made it very clear what our vision is and what the potential impact is for people at an individual level,” Pryor explains. “Also, as we’ve had to do planned reductions, we’ve told them in advance. Rather than have people just worry every day, we created several phases through which we clearly communicated the number of employees and departments that would be affected.”
TXU’s 18-month transformation is expected to end by November, and then Pryor can focus on the next phase of the venture — gaining a second utility client.

“We’re in discussions with a lot of utility companies, but they’re taking a longer time in analyzing it and digesting it than TXU did, which is really typical,” Pryor says. “I’d be wildly excited if all clients around the globe would do this so quickly.”

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