1. Describe the Organizations 2. Define the Problem 3. Define information aspect of the problem 4. How IT impacts the problem 5. Define alternatives 6.
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1. Describe the Organizations
2. Define the Problem
3. Define information aspect of the problem
4. How IT impacts the problem
5. Define alternatives
6. Pros/Cons of Alternatives
7. Select your solution and analyze advantages
8. Go or No Go Decision
9. Pros/Cons Alternatives
10. Define Messages for Modern Leader
Provincial Power Corp (PPC)• Virtual Monopoly since incorporation in 1910.• Sold significant amount of power to the states and
neighbouring provinces• 1997 – Revenues of $1.2 billion and served 350,000
customers.• 1998, the provincial government started discussing
de-regulation• 12 different information systems, outdated and not-
integrated. Meter based rather than customer based. Not Y2K compliant.
• Poor history of IT customer service capabilities.• 1998 – PPC and PwC agree to work on SAP
implementation (called Customer Foucs ’99)• 233 users highly impacted, 73 users medium
impacted, and 517 low impact
PriceWaterhourseCooper (PwC)• In 1998, Price Waterhouse and Coopers
Lybrand merged• 150,000 people working in 150 countries• Six lines of service and 22 industry-specialized
practices– Management consulting is one of their lines of
business• Technology solutions– ERP (SAP, Peoplesoft, Oracle), IT integration, Internet
Advisory, and Solutions thru technology.• PwC Energy and Mining is one of the strongest
specializations them. Greatest strength was evaluation the external environment and helping organizations anticipate and respond to those changes.
SAP• SAP is an enterprise-wide software application
company (ERP). The company was founded in 1972 by three (five) ex-IBM employees and was based in Waldof, Germany.
• 8,000 (86,000) customers in 84 (120) countries• R/2 launches at the end of the decade• Sold 1.2 million shares on the Frankfurt and
Stuttgart stock exchanges in 1998.• 1990’s launch R/3 (SAP most popular product) had
12,000 instalations in 84 countries, by 1999. R stands for real time processing– Benfits/Innovation:• Client-Server concept• Uniform appearance of graphical interface (GUI)• Relational Databases• Runs on any type of computer
SAP• 1996 installed 1,089 new R/3 customers. At the end of 1996 the
installed 9,000.• 1997 celebrate 25 years and more than 50% of company’s revenue is
generated outside of Germany.• End of the 1990’s company launches mySap.com
– Links ERP and e-commerce using Web technology• Invest 17-25% of revenues in R&D• With service-oriented architecture and the underlying integration and
application platform SAP NetWeaver, SAP is providing our customers with solutions for end-to-end business processes. With SAP NetWeaver, your company can integrate people, information, and processes within the company and beyond.
• To further demonstrate our commitment for ongoing innovation, growth, and market leadership, SAP acquired Business Objects in 2008. Together, SAP and Business Objects, an SAP company, offers the industry's most comprehensive portfolio of business performance and optimization solutions for companies of all sizes.
• 51,500 employees (website)
Generation Transmission Distribution Retail
Deregulation
Increased competition along the value chain
Leaner operations to reduce costs
Improved customer service
2. 2. OrganizationalOrganizational Problem – Problem – May 1998May 1998
Existing systems focus on “meters”, not customers
Industry trend towards “Smart Meters”
Y2K compliance
2. 2. OrganizationalOrganizational Problem – Problem – May 1998May 1998
Several unconnected legacy systems contributes to poor communication, reduces ability to provide excellent customer service
◦Unconnected Implications◦Poor Customer Service implications◦Increasing costs of supporting legacy systems from an IT perspective
Several unconnected legacy systems contributes to poor communication, reduces ability to provide excellent customer service◦ Unconnected Implications:
Each system has different databases, for example G.Swanson could be Glen Swansun.
Conflicting data in each database. Stale information, does not update immediately. Syncing is
very difficult to accomplish in a timely and cost effective manner.
◦ Poor Customer Service implications Frustrated customers because the organization has multiple
points of contacts Call backs and lengths of call are longer which result in
higher customer service costs (staff and systems)◦ Increasing costs of supporting legacy systems from an IT perspective
Maintain knowledge base for increasingly obselete systems. Risk that legacy systems will not be suported in the future.
1.Status Quo – continue to
maintain and troubleshoot
current legacy systems
2.Implement SAP enterprise
solution.
Pro Less expensive (in the
short term)
Familiarity of staff with existing system
Change management is not an issue
Con Existing systems are
not connected
Costs of maintaining legacy systems will rise
Knowledge of legacy systems may become scarce
Vendor support may no longer be available
Pro
Familiarity (PPC is using SAP)
IS-U/CCS meets their needs
Open architecture allows for connection with legacy systems
Negotiating leverage
Con
SAP Weaknesses
Poor support Long implementation time IS-U/CCS was incomplete,
development was slow Cost = $27 million
PPC weaknesses
Poor track record (mitigated by hiring PwC)
PPC, PwC and SAP agree to work together Project Name: Customer Focus ’99 1st ever implementation of SAP IS-U/CCS Code is still be written!!!!
How is it going? Any Guesses? Past History?
July 11, 1999 - Decision facing PPC/PwC is whether or not to continue the project as planned
Product development at SAP was slow
An alternative to scrapping the project: Can the scope/timeline be modified?
Pro Project so far had met
critical path timelines
Key milestones had been identified, ie. Both PwC and PPC knew what success “looked like”
Con IS-U/CCS was still not
finished, development was slow
Major issues to be addressed:
time pressure budget constraints technical problems staff motivation
concerns
Escalation of commitment
Pro No more project
spending
Existing systems are still functional
Project included upgrades to existing system to ensure they were Y2K compatible
Con Still have same issues as
before
Will still need to do something
Crown corporation will be viewed as having wasted taxpayer dollars
1999-2000 Annual Report:
“The successful installation of a state-of-the-art customer information and billing system was a significant achievement. The new SAP Customer Care and Service System provides monthly billing for over 300,000 customers and integrates customer information with information contained in NB Power’s other SAP systems.”
Clear vision of what success looks like.
Clear definition of project objectives.
Senior management commitment, sponsor.
Communicating reasons for change, not SAP due to changing environment.
Identify the lessons learned (PPC B, Ex 1, Memo by Lawton) What worked, what didn’t
Don’t be afraid to hire a consultant
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