Before the privatization, the municipality of Purmerend had outsourced the front and back office activities to a third party with its own, external, IT platform. The financial accounting was done on the IT systems of the municipality. Under these arrangements, getting insight into business performance was complicated.
Walter Verdonk, Chief Financial Officer of SVP recalls: “The business fundamentals were not right. Our lack of business insight made it difficult to make decisions and adequately control our business. The outsourcing arrangement resulted in subpar credit collection and inadequate customer satisfaction ratings. Moreover, the high cost of outsourcing contributed to an operational loss.“
Furthermore, the Dutch government was preparing a comprehensive new legal framework for district heating which required a flexible approach. Therefore the newly appointed management of SVP decided to insource its front and back-office activities as a first important step to turnaround the company performance.