hydro one cornerstone: case study

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Hydro One Cornerstone:Case Study

Carmine [email protected]

Brian [email protected]

mailto:[email protected]

mailto:[email protected]

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


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


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.



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


key suppliers

Leverage Vendor Master capabilities in SAP

Improved ERS processes -

through better automation



Improved requisition to

pay-capabilities


pay-capabilitiesMore automated document

reviews/approvals

More automated document

reviews/approvals

Reengineer direct ship receipt

confirmation process



Greater control governance around one-time setup vs. regular AP Vendor

setup


setup

Automated MRs from operational/direct

materials (Work Orders) that are currently keyed in by "Order Desk" for

LOB-E&CS



LOB-E&CS

More accurate and timely material ordering

LegendPhase 1 / 2+Phase 2+


Improve Warehouse shipping processes and payment reconciliation with carrier


SCM Benefits

AM Benefits



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



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


Financial reporting at the

asset level


asset level

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



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


estimates

Be

ne

fit

Low

High



AM Benefits

WM Benefits



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 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



Reduced AFUDC costs through

automated closing process

steps



steps

Reduce Accident Severity Rate through proactive id of

safety issues


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



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


2-3% of higher productivity

Inventory Reduction

Reduction in Labour Costs

Price Reductions




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



Ben

efi

t

Low

High



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


SRM


SRM

Improved spend analysis & reporting

through service master hierarchy & move to unit level pricing for services





Implement service time entry for Contractor Mgmt

Implement service time entry for Contractor MgmtImplement supplier self-service portal

Implement supplier self-service portal


key suppliers


key suppliers

Leverage Vendor Master capabilities in SAP






pay-capabilities


pay-capabilitiesMore automated document

reviews/approvals

More automated document

reviews/approvals






setup


setup



LOB-E&CS



LOB-E&CS

More accurate and timely material ordering





SCM Benefits

AM Benefits





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





Increased Capital spend effectiveness and increased

ROA through improved asset data and analysis




asset level


asset level












estimates


estimates

Be

ne

fit

Low

High



AM Benefits

WM Benefits



















steps



steps


safety issues


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







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




Inventory Reduction

Reduction in Labour Costs

Price Reductions




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


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



20082007



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?

hydro one cornerstone: case study

Documents

unsupported legacy systems

large industrials hydro

business driven program

shareholder value hydro

program missionsupport

transmission stations

ontario footprint

amore transformational