Comgás: Helping Transform Its Organization, Processes and Focus

The initiative has helped reduce costs and improved efficiencies and, more importantly, has positioned Comgás for high performance by making it more competitive in Brazil’s residential gas market.

Companhia de Gás de São Paulo (Comgás) is the largest natural gas distributor in Brazil, responsible for more than 25 percent of the country’s total gas sales. The company’s network of more than 5,000 kilometers (3,106 miles) of pipelines reaches more than 680,000 consumers in 177 municipalities in the state of São Paulo. The controlling shareholder in Comgás is Integral Investments, which, in turn, is controlled by BG São Paulo Investments B.V. and Shell Gas B.V. In 2010, the company reported fiscal year net revenues of US$2.3 billion.

Watch the Video:

Media Help

Download Video Transcript [PDF, 103KB]

BG Group's sale of Comgas to Cosan was completed in November 2012.

Over the years, Comgás had forged its success by delivering gas to Brazil’s high-volume, industrial consumer market. With this market clearly reaching maturity, the opportunities for continued expansion were limited.

Accenture and Comgás conducted a thorough strategy assessment to come up with a plan for growth. As one of the conclusions, the company would focus more of its energies on penetrating the low-volume, high-margin residential market.

Making sales inroads into the residential space posed several other challenges. In Brazil, consumers rarely invest in heating systems of any sort. And residences rarely use gas for heating water or cooking. They opt, in large numbers, for electricity.

This meant Comgás would need to develop new sales and marketing capabilities and tactics. To provide gas to residences, Comgás would also have to construct new pipes and build the capabilities necessary to install and connect services in a cost-effective way.

Finally, the company needed to establish a customer-centric culture and transition from a business-to-business to business-to-consumer (B2C) operating model.

To achieve these ambitious goals, Comgás set out to reduce construction and sales costs by reengineering supply chain processes, establishing a strategic sourcing methodology and optimizing supplier relationships. To bring this link between supply chain management and high performance to life in its own operations, Comgás turned to Accenture.

In addition to having successfully delivered a wide range of projects at Comgás for the past seven years, Accenture brought deep insights into the utility industry, business function expertise, broad capabilities to boost organization performance and strong relationships with key business areas across the Comgás enterprise.

Resources from Accenture’s consulting group—including professionals with deep skills in talent and organization performance, strategy development, supply chain management and customer relationship management—set out to create a new go-to-market approach that would allow Comgás to grow its market share in an increasingly competitive environment.

As a first step, the team conducted scenario-planning exercises with Comgás not only to explore the various ways the company might save money and increase its share of the residential market, but also to understand the potential challenges associated with the proposed solutions.

The team assessed the market potential, analyzed the various suppliers’ total cost structure and then set out to design a new operating model based on a customer-centric approach to service delivery, new productivity standards, efficiencies of scale and innovative win-win partnerships with suppliers. A new strategic sourcing methodology was put in place to help Comgás identify new suppliers, which were needed to meet the demand of its growing residential customer base.

Accenture’s Talent and Organization Performance professionals helped establish a governance model to oversee Comgás’ ongoing transition to a B2C mindset. As part of this effort, Accenture helped design a technical education program, which was offered through a large and well-known institute in São Paulo.

With Accenture’s help, Comgás has created a new market-driven organizational structure and operating model to help manage its B2C transformation and achieve high performance in an increasingly competitive environment. The primary goals of the project were to help Comgás build market share in the residential gas services market and to strengthen its financial footing by reducing operating costs. The project is well on its way to achieving both goals.

It is estimated that the new organizational model, processes, training programs and governance structure will enable the utility company to boost its residential customer base by 147 percent in one year and 500 percent by 2010. In terms of cost reductions, new ways of working with suppliers are expected to help Comgás reduce annual operating costs by up to 17 percent.

These savings are driven by anticipated cost reductions in three key areas:

• Operations—Comgás expects the transformation program to produce a 54 percent productivity improvement, 11 percent operational lead-time reduction, 14 percent material cost reduction and 27 percent logistic cost reduction.

• Administration—Comgás anticipates reducing its training costs for suppliers by 83 percent.

• Working Capital Efficiency—Comgás expects to reduce its inventory levels by 14 percent and its accounts receivables by 21 percent.

According to Romualdo Tiseo, Comgás’ integrated planning superintendent: “Accenture’s participation in this transformation program was a fundamental factor in Comgás’ ability to realize these benefits in such a short period of time.”

For more than 10 years, Accenture has demonstrated our commitment to helping Comgás achieve high performance. Today, Accenture continues this tradition of support and collaboration with a team of professionals in change management, supply chain management, customer relationship management and strategy development.

Together with Comgás, these resources are transforming the utility’s relationships with its supplier base and its go-to-market approach. The result is a comprehensive and dynamic change program that is enabling Comgás to seize new opportunities and maintain its competitive edge.