Home services giant Centrica is spending £450m on customer relationship management (CRM) projects for its British Gas and AA subsidiaries.

The two initiatives are expected to achieve annual savings of more than £100m.

The largest system is at British Gas, with a £350m budget. The project covers nearly 12.8 million gas and 6 million electricity users and will provide 12,000 customer service staff with instant access to detailed information about client accounts. Some 5,000 employees are already using part of the system.

'We think this improvement in service will make it easier to retain existing customers as well as attract new ones,' said Paul Bysouth, director in charge of the CRM project.

'It will mean reduced customer acquisition costs, lower customer churn rates, and reduced operational costs as well as allowing customer service people more time to spend on providing support and offering additional products to our customers.'

A separate £100m project at the AA is deploying CRM software for its 13m vehicle breakdown service customers. Both systems will be fully operational by 2005.

The initiatives are part of a major IT change programme at Centrica to modernise its systems and service levels.

Last year the company created a single database using Trillium Software for all British Gas and AA customers, and plans to expand the system to cover its Goldfish credit card and telco One.Tel

The database will be crucial to the success of the British Gas CRM system, which is being built using software from Siebel and SAP, with integration work by Accenture.

'The real benefit of our investment will be from the difference it makes to our relationship with customers - they will be able to deal with us more quickly and easily,' said Bysouth. 'They will need to make only one call to us to cover their different accounts - such as gas, electricity, telecoms and home servicing.'

Centrica has an annual IT budget of around £600m to fund change and service improvement projects.

The company is also spending £14m installing HP OpenView software to manage fault reporting for its IT helpdesk, which receives 400,000 calls a year.