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.

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de-regulation• 12 different information systems, outdated and not-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

SAP Canada’s website does not list NB Power as a success story