© 2008 Eventure Events. All rights reserved. Hydro One Cornerstone: Case Study Carmine Marcello Carmine.Marcello@HydroOne.com Brian Martin Brian.Martin@Accenture.com.
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© 2008 Eventure Events. All rights reserved.
Hydro One Cornerstone:Case Study
Carmine MarcelloCarmine.Marcello@HydroOne.com
Brian MartinBrian.Martin@Accenture.com
Hydro One:At A Glance
One of the largest electricity delivery Systems in the World
Wholly owned by the Province of Ontario
Ontario Energy Board regulates Transmission and Distribution separately
Transmission Distribution
• $7.3 Billion in assets• 28,900 KM network – over 96% of capacity in Ontario• 51 LDCs, 61 large industrials• 26 Interconnection facilities• 273 Transmission stations
• $5.4Billion in assets• 123,000 KM system – spans 75% of Ontario • 1.3 Million rural and urban customers incl. 32 LDCs, 50 Large industrials
Hydro One:Ontario Footprint
Our mission is to be an efficient and dynamic electricity transmission and distribution company that is best in North America in the areas of safety, customer service and reliability, while focusing on our people and creating shareholder value
Hydro One:Strategic Five Year Vision
• Ensure public confidence as stewards of provincial assets
• Best safety record in the world
• Top quartile reliability
• Customer satisfaction: 90% across all segments
• Skills development and retention
• Shareholder returns: Productivity/ “A” category Rating
IT Strategy:Catalyst for Change
Alternative 1
• Use of point solutions scaled to individual business process requirements
• Minimal use of enterprise systems
Alternative 3
• Use of principal enterprise systems as the established default for new applications
• Use of point solutions where justified by incremental value
Alternative 4
• Functionality consolidated to single enterprise system
• Use of point solutions limited to processes not supported by single enterprise system
Single Enterprise System
Best-of-Breed Point Solutions
Low High
Alternative 2
• Targeted use of point solutions for differentiated business processes
• Use of enterprise systems for common or undifferentiated processes
Best-of-Breed Point Solutions
Emphasis
Enterprise System(s) with Minimal Point
Solutions
Single EnterpriseSystem Emphasis
Enterprise Systems with Multiple Point
Solutions
Application Architecture Alternatives
Enterprise Systems with
Point Solutions
Current Hydro One
• Multiple highly customized enterprise systems supporting a subset of business processes
• Many processes supported by independent point solutions
Three Customized Enterprise Systems with Custom Point
Solutions
Recommended Hydro One
Architecture Direction
Degree of ITIntegration
andApplicationUniformity
Beyond IT:Business Driven Program takes Shape
Our Business Challenges EAM Opportunities
Patchwork of highly customized, unsupported legacy systems
have led to
Siloed and complex processes
and created
Barriers to achieving integration cost savings
A consolidated and integrated platform…
will enable
Simplified and standardized end-to-end processes…
and support
Sustained integration cost savings
EAM
Business and IT Challenges make opportunity right for a
more transformational program. “This is not an IT project”
Cornerstone:The Program
How SAP supports Hydro One’s Transformation
Cornerstone:The Program Mission
Support the Corporate Mission
Provide renewing and sustaining support for Hydro One’s Internal Controls
Create more effective and efficient business operations
Enable achievement of corporate regulatory objective
Drive Employee Engagement
Enablement Organization
Enterprise Asset Management“System Foundation”
Finance/HR/Pay“System Extension”
Enterprise Asset Mgmt Tools“System Extension”
Customer Information System
Enablement Organization
Enterprise Asset Management“System Foundation”
Finance/HR/Pay“System Extension”
Enterprise Asset Mgmt Tools“System Extension”
Customer Information System
Cornerstone:Phase One – The Project Team
“The power of Four”“Vanilla tastes great!”
Cornerstone:Phase One - Scope
Phase One will replace current Passport functionality in supply chain, work management, asset management, and accounts payable, with SAP functionality.
Functional Area SAP Modules
Supply Chain
Accounts Payable
Work Initiation
Preventative Maintenance
ECC 6.0ECC 6.0-MM, SD, PM, PS-MM, SD, PM, PS-WM, HR*-WM, HR*-FI (G/L, AR, AP)-FI (G/L, AR, AP)
SRM (APO)SCMPIEP
Cornerstone:Phase One – Scope/Landscape
iHub
WEP
SCDN
INTEGRATreasury
BMO
TD
EDIServer
Fax Server
Label Matrix
E-Time Machine
Bottomline
LFACA
MAIMS(ECHO)
EDW
FDM
SQDM
ADM
EPS
Pe
ople
So
ft
AM
GL
PC
HR
BI
Pay
GL Account Transactions
Employee Data
Financial Accounting &Project Data
Labour Costs &Hours
Work Order Info
Billing Requests
PurchaseOrders
Compatible Units
Billing &Design
Employee TimePurchase
Orders
CSS
Work Orders
Inspection Info
Work Accomplishmentinfo
Work Orders
Customer initiated work
Invoicefile
EmployeeExpenses
EFTInstr. &
Check issue
CashedCheck
file
Wire paymentInst. &
Act. Sum
Financial, Material &Asset related Data
(5 interfaces)
AcntsPayable
Trn
Finance
Work and Asset Management
Supply Chain
Finance
Work Management
Supply Chain
Batch
Real-time
Legend
To-Be Application Landscape
Ent
erpr
ise
Por
tal
Netweaver
Finance
Work/Asset Management
Solution Manager
PM PS
SAP for Utilities
COFI
XI
CUs
SAP
SD
MM LE WM QM
APO DP SNP MD Admin
SRM SSP EBP SS
Supply Chain
Barcodes
Customer Info
PSDB
Asset Register Info
P3EPragmacad
GIS
ArcFM (GDS)
Work Orders
Schedule Info
Completion Info
CATS
Real EstateTax Payments
Payment receipt
ORMS
Asset Register Info
Asset Register Info
TLGIS
EGIS
Cornerstone:Phase One – Value Streams
Business benefits were identified, prioritized and driven down to detailed value levers. KPI creation is underway.
Opportunity Filter
Screen Criteria:• Materiality• Probability of Achieving
Enhanced & more efficient compliance through self-service procurement
Integrated Planning esp. in large Capital Projects
Likelihood of Achieving HighSimpler, lower risk
LowComplex, higher risk
Ben
efi
t
Low
High
Improved Strategic Procurement
Improved Strategic Procurement
SCM Benefits
Improved contract compliance & mgmt
More efficient forecasting, planning
& execution of SC through X-LOB
materials classification & SLA’s
Improved SC process compliance esp. wrt
lead-times
Enhanced SC skills through use of SAP APO and
SRM
Enhanced SC skills through use of SAP APO and
SRM
Improved spend analysis & reporting
through service master hierarchy & move to unit level pricing for services
Reduce expediting, material handling & storage costs, returns,
and excess/obsolete inventory.
Reduce expediting, material handling & storage costs, returns,
and excess/obsolete inventory.
Implement service time entry for Contractor Mgmt
Implement service time entry for Contractor MgmtImplement supplier self-service portal
Implement supplier self-service portal
Implement ASN (EDI or XML) with
key suppliers
Implement ASN (EDI or XML) with
key suppliers
Leverage Vendor Master capabilities in SAP
Improved ERS processes -
through better automation
Improved ERS processes -
through better automation
Improved requisition to
pay-capabilities
Improved requisition to
pay-capabilitiesMore automated document
reviews/approvals
More automated document
reviews/approvals
Reengineer direct ship receipt
confirmation process
Reengineer direct ship receipt
confirmation process
Greater control governance around one-time setup vs. regular AP Vendor
setup
Greater control governance around one-time setup vs. regular AP Vendor
setup
Automated MRs from operational/direct
materials (Work Orders) that are currently keyed in by "Order Desk" for
LOB-E&CS
Automated MRs from operational/direct
materials (Work Orders) that are currently keyed in by "Order Desk" for
LOB-E&CS
More accurate and timely material ordering
LegendPhase 1 / 2+Phase 2+
LegendPhase 1 / 2+Phase 2+
Improve Warehouse shipping processes and payment reconciliation with carrier
Improve Warehouse shipping processes and payment reconciliation with carrier
SCM Benefits
AM Benefits
LegendPhase 1 / 2+Phase 2+
LegendPhase 1 / 2+Phase 2+
Optimized O&M and Capital spend through enhanced asset analysis and maintenance through use of Meridium
Optimized O&M and Capital spend through enhanced asset analysis and maintenance through use of Meridium
Improved system reliability through higher quality asset data
Increased Regulatory compliance and reduced fines (NPCC & NERC) through optimized work
bundling for routine inspections and PM work
Improved warranty tracking and recovery through enhanced failure
and life-cycle cost analysis
Improved warranty tracking and recovery through enhanced failure
and life-cycle cost analysis
Increased Capital spend effectiveness and increased
ROA through improved asset data and analysis
Better leverage of Tech and IS to provide better and more accessible information from EAM system
Better leverage of Tech and IS to provide better and more accessible information from EAM system
Financial reporting at the
asset level
Financial reporting at the
asset level
Improved productivity, SCM & resource planning/scheduling through BRPR
replacement and integrated processes
Improved productivity, SCM & resource planning/scheduling through BRPR
replacement and integrated processes
Streamlined project design, estimating, SCM & work
execution through development of standards, CU’s and task lists
Streamlined project design, estimating, SCM & work
execution through development of standards, CU’s and task lists
Reduced Regulatory FTE’s to prepare improved T&D Rate Filings by providing “One Asset One View”
Reduced Regulatory FTE’s to prepare improved T&D Rate Filings by providing “One Asset One View”
Better managed Customer commitments through streamlined connection process across LOB’s and more accurate/faster
estimates
Better managed Customer commitments through streamlined connection process across LOB’s and more accurate/faster
estimates
Be
ne
fit
Low
High
Likelihood of Achieving HighSimpler, lower risk
LowComplex, higher risk
AM Benefits
WM Benefits
LegendPhase 1 / 2+Phase 2+
LegendPhase 1 / 2+Phase 2+
Improved planning of long lead materials though use of standard designs and CU’s
Improved planning of long lead materials though use of standard designs and CU’s
Increased crew productivity through better planning and
scheduling of work and increased bundling
Increased crew productivity through better planning and
scheduling of work and increased bundling
Increased back-office productivity Designer/Clerical through reduced
costs of tracking work to be scheduled and time prioritizing work
Increased back-office productivity Designer/Clerical through reduced
costs of tracking work to be scheduled and time prioritizing work
Improved Contractor management through better compliance, performance
mgmt and reduced cost of paying contractors
Improved Contractor management through better compliance, performance
mgmt and reduced cost of paying contractors
Reduced AFUDC costs through
automated closing process
steps
Reduced AFUDC costs through
automated closing process
steps
Reduce Accident Severity Rate through proactive id of
safety issues
Reduce Accident Severity Rate through proactive id of
safety issues
Improved Cust Sat through faster repair of major storm damage
Improved Cust Sat through faster repair of major storm damageImproved Dx Cust Sat through
more accurate scheduling and contact through enhanced GIS
information on assets
Ben
efi
t
Low
High
Likelihood of Achieving HighSimpler, lower risk
LowComplex, higher risk
Improve large Tx customer satisfaction through more detailed reporting and
improved connection process
Improve large Tx customer satisfaction through more detailed reporting and
improved connection process
WM Benefits
SCM
AM
WM
Capability Areas Value Levers Detailed Value Levers
Reliability
Business Efficiency and Effectiveness
Sustainment
Development
O&M and Capital Spend
Warranty
Regulatory RelationshipRegulatory Compliance
Rate Filing
Customer Satisfaction Large Customers
Productivity
Safety
Customer Satisfaction
Emergency Work
Field Productivity
Designer/Clerical Productivity
Large and Mid-Size Customers
Retail and Small Customers
Contractor Management
Identify Safety Issues
Major Storm Damage
Compliance Management
Sourcing and Category Management
Transactional Processing
Source-to-Pay
Demand & Supply Planning
4-7% of savings potential
5-15% of savings potential
2-3% of higher productivity
Inventory Reduction
Reduction in Labour Costs
Price Reductions
20-30% of savings potential
1-5% of higher productivity
1-5% of savings potential
Lower Order Lead-time
Improved Customer SvcOpportunity Filter
Opportunity Filter
Screen Criteria:• Materiality• Probability of Achieving
Enhanced & more efficient compliance through self-service procurement
Integrated Planning esp. in large Capital Projects
Likelihood of Achieving HighSimpler, lower risk
LowComplex, higher risk
Ben
efi
t
Low
High
Improved Strategic Procurement
Improved Strategic Procurement
SCM Benefits
Improved contract compliance & mgmt
More efficient forecasting, planning
& execution of SC through X-LOB
materials classification & SLA’s
Improved SC process compliance esp. wrt
lead-times
Enhanced SC skills through use of SAP APO and
SRM
Enhanced SC skills through use of SAP APO and
SRM
Improved spend analysis & reporting
through service master hierarchy & move to unit level pricing for services
Reduce expediting, material handling & storage costs, returns,
and excess/obsolete inventory.
Reduce expediting, material handling & storage costs, returns,
and excess/obsolete inventory.
Implement service time entry for Contractor Mgmt
Implement service time entry for Contractor MgmtImplement supplier self-service portal
Implement supplier self-service portal
Implement ASN (EDI or XML) with
key suppliers
Implement ASN (EDI or XML) with
key suppliers
Leverage Vendor Master capabilities in SAP
Improved ERS processes -
through better automation
Improved ERS processes -
through better automation
Improved requisition to
pay-capabilities
Improved requisition to
pay-capabilitiesMore automated document
reviews/approvals
More automated document
reviews/approvals
Reengineer direct ship receipt
confirmation process
Reengineer direct ship receipt
confirmation process
Greater control governance around one-time setup vs. regular AP Vendor
setup
Greater control governance around one-time setup vs. regular AP Vendor
setup
Automated MRs from operational/direct
materials (Work Orders) that are currently keyed in by "Order Desk" for
LOB-E&CS
Automated MRs from operational/direct
materials (Work Orders) that are currently keyed in by "Order Desk" for
LOB-E&CS
More accurate and timely material ordering
LegendPhase 1 / 2+Phase 2+
LegendPhase 1 / 2+Phase 2+
Improve Warehouse shipping processes and payment reconciliation with carrier
Improve Warehouse shipping processes and payment reconciliation with carrier
SCM Benefits
AM Benefits
LegendPhase 1 / 2+Phase 2+
LegendPhase 1 / 2+Phase 2+
Optimized O&M and Capital spend through enhanced asset analysis and maintenance through use of Meridium
Optimized O&M and Capital spend through enhanced asset analysis and maintenance through use of Meridium
Improved system reliability through higher quality asset data
Increased Regulatory compliance and reduced fines (NPCC & NERC) through optimized work
bundling for routine inspections and PM work
Improved warranty tracking and recovery through enhanced failure
and life-cycle cost analysis
Improved warranty tracking and recovery through enhanced failure
and life-cycle cost analysis
Increased Capital spend effectiveness and increased
ROA through improved asset data and analysis
Better leverage of Tech and IS to provide better and more accessible information from EAM system
Better leverage of Tech and IS to provide better and more accessible information from EAM system
Financial reporting at the
asset level
Financial reporting at the
asset level
Improved productivity, SCM & resource planning/scheduling through BRPR
replacement and integrated processes
Improved productivity, SCM & resource planning/scheduling through BRPR
replacement and integrated processes
Streamlined project design, estimating, SCM & work
execution through development of standards, CU’s and task lists
Streamlined project design, estimating, SCM & work
execution through development of standards, CU’s and task lists
Reduced Regulatory FTE’s to prepare improved T&D Rate Filings by providing “One Asset One View”
Reduced Regulatory FTE’s to prepare improved T&D Rate Filings by providing “One Asset One View”
Better managed Customer commitments through streamlined connection process across LOB’s and more accurate/faster
estimates
Better managed Customer commitments through streamlined connection process across LOB’s and more accurate/faster
estimates
Be
ne
fit
Low
High
Likelihood of Achieving HighSimpler, lower risk
LowComplex, higher risk
AM Benefits
WM Benefits
LegendPhase 1 / 2+Phase 2+
LegendPhase 1 / 2+Phase 2+
Improved planning of long lead materials though use of standard designs and CU’s
Improved planning of long lead materials though use of standard designs and CU’s
Increased crew productivity through better planning and
scheduling of work and increased bundling
Increased crew productivity through better planning and
scheduling of work and increased bundling
Increased back-office productivity Designer/Clerical through reduced
costs of tracking work to be scheduled and time prioritizing work
Increased back-office productivity Designer/Clerical through reduced
costs of tracking work to be scheduled and time prioritizing work
Improved Contractor management through better compliance, performance
mgmt and reduced cost of paying contractors
Improved Contractor management through better compliance, performance
mgmt and reduced cost of paying contractors
Reduced AFUDC costs through
automated closing process
steps
Reduced AFUDC costs through
automated closing process
steps
Reduce Accident Severity Rate through proactive id of
safety issues
Reduce Accident Severity Rate through proactive id of
safety issues
Improved Cust Sat through faster repair of major storm damage
Improved Cust Sat through faster repair of major storm damageImproved Dx Cust Sat through
more accurate scheduling and contact through enhanced GIS
information on assets
Ben
efi
t
Low
High
Likelihood of Achieving HighSimpler, lower risk
LowComplex, higher risk
Improve large Tx customer satisfaction through more detailed reporting and
improved connection process
Improve large Tx customer satisfaction through more detailed reporting and
improved connection process
WM Benefits
SCM
AM
WM
Capability Areas Value Levers Detailed Value Levers
Reliability
Business Efficiency and Effectiveness
Sustainment
Development
O&M and Capital Spend
Warranty
Regulatory RelationshipRegulatory Compliance
Rate Filing
Customer Satisfaction Large Customers
Productivity
Safety
Customer Satisfaction
Emergency Work
Field Productivity
Designer/Clerical Productivity
Large and Mid-Size Customers
Retail and Small Customers
Contractor Management
Identify Safety Issues
Major Storm Damage
Compliance Management
Sourcing and Category Management
Transactional Processing
Source-to-Pay
Demand & Supply Planning
4-7% of savings potential
5-15% of savings potential
2-3% of higher productivity
Inventory Reduction
Reduction in Labour Costs
Price Reductions
20-30% of savings potential
1-5% of higher productivity
1-5% of savings potential
Lower Order Lead-time
Improved Customer Svc
Cornerstone:Phase One – Project Timeline
Project Mobilization January 2007
Go-Live of June 2nd 2008
Project Post Go-Live suspended July 31st 2008
Project Close-out Sept 12, 2008JulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFebJan
DeployTestBuildDesignMobilize
20082007
JulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFebJan
DeployTestBuildDesignMobilize
20082007
Test & Deploy Training
Deploy
BusinessReadiness
Program Management
Plan Build
Test ExecutionTest Planning
Mock ConversionsConversion Planning
Config Design , Build
Tech Design Development Build
Environments Setup and Management
Design Technical Infrastructure Confirm Sizing
Plan Test Plan Deploy
Operational ProceduresHow To Documents and Strategies
Design Planning
SANDBOX DEV TEST LEARNING PRD
RICEF SAP & Legacy FD
Config Rationale
Conference Room Pilot
Business ProcessDesign (BPDS) & Data Definitions
BusinessReadiness
CONVPROT
Pro
gra
m
Mgt
Busi
ness
RIC
EF
Tech
nolo
gy
Chang
e M
anagem
ent
STAGING
Technical Testing Plan and Execution
Develop and Execute Change Network & Communication Plan
Build Learning & Perf MaterialsDesign Learning &
Performance Support
Launch Sustainment Organization
Sustainment Organization Structure Complete
Deploy New RolesDesign Roles Build New Roles
Continue Staffing Sustainment Organization
New/ Modified Jobs Deployed
Staff Key Sustainment Org
Design Sustainment Organization Build Sustainment Org
JulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFebJan
DeployTestBuildDesignMobilize
20082007
JulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFebJan
DeployTestBuildDesignMobilize
20082007
Test & Deploy Training
Deploy
BusinessReadiness
Program Management
Plan Build
Test ExecutionTest Planning
Mock ConversionsConversion Planning
Config Design , Build
Tech Design Development Build
Environments Setup and Management
Design Technical Infrastructure Confirm Sizing
Plan Test Plan Deploy
Operational ProceduresHow To Documents and Strategies
Design Planning
SANDBOX DEV TEST LEARNING PRD
RICEF SAP & Legacy FD
Config Rationale
Conference Room Pilot
Business ProcessDesign (BPDS) & Data Definitions
BusinessReadiness
CONVPROT
Pro
gra
m
Mg
tB
usi
ne
ssR
ICE
FT
ech
nolo
gy
Ch
ang
e M
anagem
ent
STAGING
Technical Testing Plan and Execution
Develop and Execute Change Network & Communication Plan
Build Learning & Perf MaterialsDesign Learning &
Performance Support
Launch Sustainment Organization
Sustainment Organization Structure Complete
Deploy New RolesDesign Roles Build New Roles
Continue Staffing Sustainment Organization
New/ Modified Jobs Deployed
Staff Key Sustainment Org
Design Sustainment Organization Build Sustainment Org
# Person days/# People on the project:
43,265/468
# Deliverables produced: 861
# Issues raised/addressed: 721
# Change Requests addressed: 436
# Test Scenarios executed/Total SIRs: 868/1097
# Tasks on Cutover Plan: 1287
# People Classroom Trained prior to go-Live: 2221
Mobilize Design Build Test Deploy
Cornerstone:Phase One – Transition to Enablement
The ‘Project’ Phase of the Project may be over – but the “real” work is just beginning.
Hydro One has set up an Enablement organization to continue to drive value from Cornerstone long-term
VISION
The Enablement Organization will drive productivity
through enterprise process improvements and
ensure we leverage the Cornerstone Assets to their
full potential
Cornerstone:Phase One – Transition to Enablement
Enablement Structure and Guiding Principles
Enablement Director
Process & Data
Manager
Performance
Improvement Manager
Business Solutions &
Training Managers
Enablement Guiding Principles
• Continuously leverage the Cornerstone investment
• Improve impacted business processes on an ongoing basis
• Identify and prioritize business improvements based on measurable and
verifiable value
• Govern data as an asset to drive better analysis and decision making
• Increase end user productivity and quality of work
Cornerstone:Project/Program Success
Cornerstone “Why Projects Fail” Placemat
Lack of Sponsorship•Lack of buy-in that change is necessary•Lack of an aligned vision•Lack of commitment / courage to achieve vision•Turf battles
Decision Making•Lack of timely decision making to maintain pace•Fear of decisions (i.e. analysis paralysis)•Inability to make unpopular decisions
Risks•Risk mitigation strategy defined, but not executed on•Late identification and communication of risks•‘Head in the sand’ in decision making
Scope Definition/Containment•Scope not defined clearly•Scope change management governance•Wait too long for benefits
Change Management•Lack of ownership and Involvement•Guessing at readiness•Lack right skills or effort to manage change process •Isolating “change management”to members of the change team
The System•Customizing system beyond limits•‘Unnatural’ functions of system to mimic legacy apps•Too many interfaces and conversions increasing risk
Lack of Sponsorship•Lack of buy-in that change is necessary•Lack of an aligned vision•Lack of commitment / courage to achieve vision•Turf battles
Decision Making•Lack of timely decision making to maintain pace•Fear of decisions (i.e. analysis paralysis)•Inability to make unpopular decisions
Risks•Risk mitigation strategy defined, but not executed on•Late identification and communication of risks•‘Head in the sand’ in decision making
Scope Definition/Containment•Scope not defined clearly•Scope change management governance•Wait too long for benefits
Change Management•Lack of ownership and Involvement•Guessing at readiness•Lack right skills or effort to manage change process •Isolating “change management”to members of the change team
The System•Customizing system beyond limits•‘Unnatural’ functions of system to mimic legacy apps•Too many interfaces and conversions increasing risk
Cornerstone:Project/Program Success
Cornerstone Program Values
• Collaborative relationships
• Respect and trust for one another
• Badgeless
• Client focused
• Transparency
• Sponsor support
• Empowered teams
Questions?
© 2008 Eventure Events. All rights reserved.
Carmine MarcelloCarmine.Marcello@HydroOne.com
Brian MartinBrian.Martin@Accenture.com
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