Provincial Power
Corporation
Presented by:
Siddeek Ali
Leslie Dyck
Tim Friesen
Chris Reichert
Jayson Schimnowski
Jimmy Tran
Presentation Outline
Company Background
 Crown corporations, traditionally government-owned,
provide services to Canadians in a non-competitive
marketplace
 Provincial Power Corporation (PPC) has held virtual
monopoly since 1910 as electricity provider
 Revenues of $1.2B serving 350,000 customers
 Organizational goals:
 Remain the prime supplier of electricity in the province
 Remain easy to do business with (ensuring customer loyalty)
 Be customer-focused and cost effective
 Run a billing system that is Y2K compliant
The Organizational Problem
 PPC needs to address the imminent deregulation
 Unbundling of utilities value-added chain
 Increased government regulation
 Competition from new entrants, alliances, M&As
 Increased need for diversification and strategic planning
The Traditional Model
Generation
Transmission
Distribution
 Crown corporation is involved in all aspects of the
supply chain
The Incoming New Model
Energy
Generation
Transmission
Distribution
Customer
Service &
Billing
 1998 brings the serious possibility of deregulation
 Utility companies were analyzing their business
processes to see where they would fit into the new
deregulated marketplace
Information Aspect of Problem
 Poor customer service & billing process
 Meter-focused rather than customer-focused
 Inability to handle all types of power contracts
 Lacks integration of various business processes
 No integration between functional areas
 Isolated solutions for: installation, connection, repair,
monitoring, maintenance, & other site services
 Isolated solutions for energy consulting and contract
management
Information Aspect of Problem
 Inefficiency
 No coordination between back office & front office
functions
 No communication mechanisms between, for example, finance
and power logistics
 Must evaluate core competencies
 If business units can’t communicate, can management
effectively get a handle on core competencies?
 What effects might this have on PPC’s ability to adjust to
deregulation & competition?
IT/IS Impacts
 Current customer information system (CIS) is based
on an outdated mainframe
 12 isolated legacy systems
 Expensive and risky to maintain
 Current CIS runs poor or dead-end software
 Rarely allows incorporation of new communication
technologies
 Even if incorporation is possible, it is extremely expensive
1. Do Nothing
 Continue to use 12 non-integrated legacy systems
 Upgrade legacy systems to ensure Y2K compliancy
2. SAP IS-U/CCS
 Enterprise-wide software planning application,
Enterprise Resource Planning (ERP)
 Company based in Germany with thousands of
customers around the world
 Many capabilities
Legacy System - Pros
 Less costly in the short term
 No need to pay for the high costs of replacing entire system
 Familiarity
 Employees are knowledgeable in using the legacy system
 No employee retraining burden
 For example, time, money, and company moral
 Less risky
 Avoids the uncertainty associated with installing an entirely
new system
Legacy System - Cons
 Not adaptable to changing business environment –
deregulated utilities industry
 poor or dead-end software engineering
 Mainframe based
 Costly to maintain in the long term
 Does not allow communication between departments
 In-field representatives cannot communicate with billing
SAP IS-U/CCS - Pros
 Integrates and facilitates communication between all
PPC departments
 Logistics, Financials, Customer Service, & Etc.
 Adaptable to PPC’s organizational structure
 Eliminates need for multiple legacy systems
 Has business process-oriented user interface
 Allows end-users to multitask
 Offers software solutions for all activities
performed in PPC
 Front office
o Universal billing system to handle all types of contracts
 Back office
o Open architecture to communicate with 3rd party systems
SAP IS-U/CCS - Cons
 Very costly to implement
 $25M to $27M
 Long implementation time
 Over 15 months
 Poor support
 Program still under development and would not be shipped
until late 1998
Solution
 Implement SAP IS/CCS
 Allows PPC to fulfill organizational goals:
 Remain the prime supplier of electricity in the province
 Wide range of capabilities prepares PPC for unknown future
 Remain easy to do business with (ensuring customer loyalty)
 Improves on PPC’s current business practices
 Be customer-focused and cost effective
 Customer orientation allows PPC to provide better and more
efficient customer service
 Run a billing system that is Y2K compliant
 System designed for the new millennium
Customer Focus ’99 Project
 Implement SAP IS-U/CCS under guidance of
PricewaterhouseCoopers LLP
 Project managed by Richard Lawton
 Certified SAP Consultant
Richard Lawton – Project Manager
 Setting up the project
 Managing the schedule
 Managing the finances
 Managing the benefits
 Managing the risks, opportunities, issues
 Making important recommendations
Lawton’s Recommendation
 Continue project as scheduled
 Delay project
 Postpone indefinitely
Issues to Consider
 Time pressures
 Project must be completed two weeks before August 23rd.
 If missed, project will be halted for three weeks at burn rate
of $150,000/week.
 Y2K
 Budget constraints
 $27.3 M budget and PPC’s objective was to spend less
 If project delayed, project will go over budget
 Technical problems
 PPC will be SAP IS-U/CCS’ first customer
 Difficulties and delays expected
Issues to Consider
 Staff motivation concerns
 Stress and anxiety levels of the project team members were
extremely high as they approached the deadline
 Training time constraints
 Longer than expected SAP IS-U/CCS implementation time
meant that staff training time would be shortened
Project Outcome
 Lawton recommended that the project proceed as
scheduled
 Implement by August 23rd
 SAP IS-U/CCS went live on August 9th
 First batch of customer bills printed on August 12th
 $1.5M under budget
 Functioned as designed
 Implementation resulted in some issues
 1% of the customer account information was not converted
correctly, about 3,500 accounts
 Strive for perfected resulted in high emotions
 Less training than preferred
MB Hydro IT/IS
 Six IT departments, numerous ERP systems:
 SAP – finance, HR, materials planning, work orders
 Banner – customer care incl. bill generation, Mybill, service
orders, computer-aided dispatch to service
 GIS applications by ESRI and GE Smallworld
 Hydro integrated the ERP systems:
 they found no out-of-the-box solution that fit their model
 they communicate, they’re accessible across functional areas
 E.g. HR and meter functions link with Finance
 Future
 continued improvement of customer interface
 wireless meters, which could enable time-of-use rates,
remote connect/disconnect, improved energy management
service
Messages for Modern Leader
 Vendor management
 Be aware of additional mandatory software systems
 Dedicated team
 Steering committee, project management team
 Unfreeze, move, and refreeze
 Organizational behaviour change model
 Training
 Allocate adequate time, money, and trainers
QUESTION
TIME