(PG&E-10)
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PACIFIC GAS AND ELECTRIC COMPANY
CHAPTER 1
TRANSFORMATION – PROGRAM MANAGEMENT
A. Introduction
The purpose of this chapter of testimony is to describe in detail how Pacific
6
Gas and Electric Company’s (PG&E or Company) Business Transformation
7
Program (BTP or program) effort is organized, directed and managed. The
8
chapter is arranged as follows:
9
Program Structure;
10
Day-to-Day Operations;
11
Initiatives Development;
12
Principles of Integration;
13
Accenture Consulting Contract Structure; and
14
Appendix of Transformation Initiatives.
15
16
B. Program Structure
Given the comprehensive nature and scope of the BTP effort as described
17
in Exhibit (PG&E-1), Chapter 1, a program structure has been put in place to
18
ensure efficient management of all BTP work activities and participants, while
19
still accommodating the dynamic and evolving nature of the effort. Roles,
20
responsibilities, and delegation of authority for decision-making within the
21
program structure have been defined accordingly.
22
The Transformation Program structure currently in place is shown in
23
Figure 3-1. The transformation effort uses PG&E employees from across the
24
company, both geographically and by line of business. Some PG&E employees
25
involved in transformation are full-time, while others, primarily at the initiative
26
level, are part-time. The Program Management Office (PMO) and
27
transformation work stream “boxes” shown in Figure 1-1 contain both PG&E and
28
Accenture Consulting (Accenture) personnel to complement their respective
29
capabilities and backgrounds and carry out the necessary day-to-day work
30
activities.
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FIGURE 1-1
PACIFIC GAS AND ELECTRIC COMPANY
BUSINESS TRANSFORMATION PROGRAM STRUCTURE
A. Operating Committee
VP
Regulatory
Relations
Law / External
Stakeholder /
Regulatory
Sr. VP &
General
Counsel
Law / External
Stakeholder /
Regulatory
Sr. VP
Transmission
& Distribution
ED / AM
Sr. VP
Customer
Srvc & Rev
Customer
Executive VP &
Chief Operating
Officer
VP General
Services
Supply Chain
Sr. VP Human
Resources
HR/Labor /
Change Mgmt
Chair
Sr. VP, CFO
& Treasurer
Benefit Realization
& Performance
Mgmt
VP
Communication
VP & CIO
IT
Communications
B. Program Management Office (PMO)
Program Management
Business
Architecture/
Integration
Benefit Realization &
Performance
Management
Enabling Team
Coordination
Information
Technology
Architecture
Energy Delivery
(ED)
Supply Chain
Customer
Program Mgmt
Support
Change Management &
Communications
C. Transformation Work Streams
Asset Management
(AM)
Advanced Metering
Infrastructure (AMI)*
Information
Technology
Transformation
(ITT)
D. Enabling Teams
External Stakeholder Management
Law
Labor
Regulatory
(
4
) Matrix to the PMO, directly reporting to Sponsoring Officer
* AMI is considered part of BTP, but is not included in this GRC proceeding
A description of the roles and responsibilities of each of these groups and
5
teams involved in the Transformation Program follows.
6
1. Operating Committee
7
The BTP’s overall strategic direction is set by PG&E’s Operating
8
Committee (OC), which is comprised of senior PG&E utility officers. The
9
OC is chaired by PG&E’s Executive Vice President and Chief Operating
10
Officer. In addition to providing overall strategy and direction to the program
11
as a group, each OC member also individually serves as a sponsoring
12
officer to a particular program management team, transformation work
13
stream, and/or enabling team. The OC meets regularly, generally weekly, to
14
review, discuss and approve items of importance associated with the
15
Transformation Program.
16
17
The current OC officer membership, including their corresponding
sponsorship roles, is shown in Table 1-1.
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TABLE 1-1
PACIFIC GAS AND ELECTRIC COMPANY
OPERATING COMMITTEE OFFICER SPONSORS
Line
No.
1
2
3
4
5
6
7
8
9
4
5
Program Management/Work Stream/
Enabling Team OC Sponsor For:
Officer Title
Vice President, Regulatory Relations
Sr. Vice President and General Counsel
Sr. Vice President, Transmission and
Distribution
Sr. Vice President, Customer Service and
Revenue
Vice President, General Services
Sr. Vice President, Human Resources
Sr. Vice President, CFO and Treasurer
Vice President, Communications
Vice President and Chief Information
Officer
Law/External Stakeholder/Regulatory
Law/External Stakeholder/Regulatory
Energy Delivery/Asset Management (ED/AM)
Customer Management
Supply Chain
HR/Labor/Change Management
Benefit Realization/Performance Management
Communications
Information Technology
2. PMO
The Operating Committee established a PMO to serve as a centralized
6
program management department, with coordinating, monitoring, and
7
reporting functions. The PMO is the key focal point for joint PG&E and
8
Accenture management of the BTP on a day-to-day basis. The PMO
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ensures that the work stream initiatives and activities are integrated. It also
10
manages the scope of issues undertaken by the work streams, captures
11
and accounts for the costs and benefits associated with BTP initiatives, and
12
ensures that changes in Company practices resulting from BTP are
13
implemented. The PMO conducts regular meetings with work stream team
14
leads and leads the discussion of issues before the OC that require OC
15
consideration. In order to manage the BTP initiatives from design through
16
implementation and ensure appropriate approvals, the PMO has developed
17
processes and controls.
18
19
3. Transformation Work Streams
The BTP focuses on three key areas of PG&E’s core business: energy
20
delivery (including gas and electricity)/asset management; supply chain; and
21
customer management. In addition, as shown in Figure 1-1, Information
22
Technology Transformation (ITT) is designated as a transformation work
23
stream. Work stream team leads from PG&E and Accenture were selected
24
to oversee these areas, as well as manage the multiple initiatives
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associated with each. At the initiative level, a designated PG&E initiative
2
team lead manages the day-to-day activities of the team members.
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The relationship between the team leads of the transformation work
4
streams shown in Figure 1-1 and the initiative team leads reporting to them
5
is illustrated in Figure 1-2 using the energy delivery work stream as an
6
example.
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8
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FIGURE 1-2
PACIFIC GAS AND ELECTRIC COMPANY
WORK STREAM/INITIATIVE TEAM LEAD EXAMPLE – ENERGY DELIVERY
Energy
EnergyDelivery
Delivery
PG&E
PG&EWork
WorkStream
Stream
Team
TeamLead
Lead
Work
Work Design
Design and
and
Resource
Resource Mgmt
Mgmt
PG&E
PG&E Initiative
Initiative Team
Team Lead
Lead
Supervisor
Supervisor in
in Field
Field //
Field
Field Force
Force Transformation
Transformation
Electric
Electric Operation
Operation
Optimization
Optimization
PG&E
PG&E Initiative
Initiative Team
Team Lead
Lead
PG&E
PG&E Initiative
Initiative Team
Team Lead
Lead
Workforce
Workforce Flexibility
Flexibility
PG&E
PG&E Initiative
Initiative Team
Team Lead
Lead
Compatible
Compatible Units
Units and
and
Design
Design Templates
Templates
New
New Business
Business
PG&E
PG&E Initiative
Initiative Team
Team Lead
Lead
PG&E
PG&E Initiative
Initiative Team
Team Lead
Lead
The work stream teams plan, design and implement the Business
10
11
Transformation initiatives (see Appendix, Table A1-1 to Table A1-5, for
12
listing of initiatives by work stream) and are the key focal point for the
13
interaction of Accenture and PG&E for executing the underlying initiatives.
14
15
There are currently six transformation work streams.
(1) Energy Delivery (ED);[1]
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(2) Asset Management (AM);[1]
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(3) Supply Chain/Corporate Real Estate/Fleet;
[1]
Given the close and overlapping nature of so many of the initiatives under the
energy delivery and asset management work streams, the two are sometimes
referred to as one under the nomenclature of “ED/AM.”
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(4) Customer Management;
2
(5) Information Technology; and
3
(6) Advanced Metering Infrastructure (AMI).[2]
4. Enabling Teams
4
The enabling team is drawn from PG&E’s Public Affairs, Human
5
6
Resources and Law Departments to support the activities of the BTP.
7
These teams play a critical role in providing specialized guidance and
8
support to the individual work stream and initiative teams. The enabling
9
team coordination group in the PMO works to ensure effective integration
10
between assigned enabling team members and the work stream and
11
initiative team members.
12
C. Day-to-Day Operations
The day-to-day operations of the Transformation Program are coordinated
13
14
primarily by the PMO. As shown in Figure 1-1, the PMO is actually composed of
15
six teams reporting either directly or by matrix to the PMO senior director.
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Collectively, the teams reporting to the PMO senior director are considered the
17
program management work stream. The PMO senior director reports directly to
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the chair of the OC, PG&E’s Executive Vice President and Chief Operating
19
Officer.
The PMO senior director provides leadership and direction to the
20
21
transformation efforts. This comprises ensuring that all roles and
22
responsibilities of the PMO are fulfilled, including development of the structure,
23
process and controls to ensure overall success of transformation. Key areas of
24
responsibility for the PMO senior director position are:
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Lead the development and ensure proper administration of process and
procedures;
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Ensure team leads, PMO leads, and enabling leads are fully aware of, and are
27
28
held accountable for, using the processes and tools to track, monitor,
29
manage and control the program;
Ensure integration across the program;
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[2]
Advanced Metering Infrastructure (AMI) is considered a part of the Business
Transformation Program, but is not included in this GRC proceeding because
it is covered in other CPUC proceedings.
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Hold all program leads accountable for cost tracking and monitoring;
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Provide effective communications to the program. Ensure that a
3
communications strategy is developed for the program that incorporates the
4
needs of the teams, sponsoring officers, the OC, and other stakeholders
5
across the company;
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Effectively lead and direct all aspects of PMO function, including but not limited
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to: cost, schedule, scope, change control, contingency, issue, resources,
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quality, risk, procurement and contract, performance measurement and
9
reporting;
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Provide guidance and direction to all program leads, including holding regular
11
meetings for status review and issue capture/resolution. A key component
12
of directing and supporting the work stream and enabling teams is to
13
address questions, concerns, and issues that might arise;
14
Develop a timeline and strategy for issues to be brought to the OC to ensure
15
timely, effective feedback and decisions necessary to ensure success of the
16
program. This includes review and approval of all materials that are
17
presented to the OC and accountability for the quality, accuracy, and proper
18
sign offs of the information that is presented. Develop materials that
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present information in a discussion/decision making form. Also ensure that
20
the OC has the materials needed for review, discussion, and
21
decision-making; and
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Communicate decisions by the OC and ensure they are fully understood and
23
adhered to by leads.
24
The objectives, roles, and responsibilities of the six teams reporting to the
25
PMO senior director are:
26
1. Program Management Support
27
The program management support team is responsible for designing,
28
implementing, and coordinating a series of management processes to
29
ensure a successfully run program. The program management support
30
function manages the program activities by providing the tools, processes,
31
and support necessary for the program office to effectively control, measure,
32
and report the program activities.
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2. Business Architecture/Integration
The primary objective of the business architecture/integration team is to
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3
coordinate and align the overall business architecture (people, processes
4
and technology) with PG&E’s operating strategy, corporate governance and
5
initiative business cases. The responsibilities of the business
6
architecture/integration function include:
7

operating strategy, corporate governance and initiative business cases;
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9
Coordinating and aligning the overall business architecture with PG&E’s

Developing and maintaining the integrated, enterprise process
architecture;
10
11

Facilitating and coordinating integration across initiatives;
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
Assisting in the identification and resolution of cross work stream
13
impacts resulting from business capability changes, decisions, or
14
approaches defined in an individual work stream;
15

across business capability components of work streams;
16
17


22
Leading and facilitating capability delivery planning and the overall
business capability delivery approach and milestones; and
20
21
Leading and facilitating the identification, evaluation and selection of
enterprise operating alternatives and organization(s);
18
19
Assisting in the identification and resolution of risks/issues/conflicts

Providing assistance to the enabling teams.
3. Benefit Realization and Performance Management
23
The primary objective of the Benefits Realization and Performance
24
Management team is to design and execute the processes and tools which
25
monitor and report on the program’s overall financial status, program
26
business case benefits realization, operational performance metrics, and
27
overall performance of the program. In addition, this function is responsible
28
for developing and updating the program business case at specific
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milestones, and performing financial analysis to support decision making.
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A more detailed description of the roles and responsibilities of the Benefits
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1
Realization and Performance Management function can be found in
2
Exhibit (PG&E-10), Chapter 5.
3
4. Enabling Team Coordination
4
The primary objective of the enabling team coordination group is to
5
ensure that the work streams and enabling teams are effectively integrated
6
on an ongoing basis as the work stream initiatives proceed through the
7
deliverable/milestone review, approval and implementation process.
8
5. Information Technology Architecture
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The primary objective of the Information Technology Architecture team
10
is to provide the appropriate foundation and technical architecture required
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for the business transformation initiatives as a whole to meet their
12
objectives. The approach is to maximize integration between application
13
systems to support more data sharing, and to lower overall IT support costs
14
by minimizing customization of application systems. More detail regarding
15
IT Architecture objectives and initiatives can be found in Exhibit (PG&E-10),
16
Chapter 4.
17
6. Change Management and Communications
Change Management is a key component of the Transformation
18
19
process and focuses on the many cultural and organizational changes
20
which need to take place. Communications is responsible for developing
21
communication plans and coordinating the production of key messages and
22
materials to prepare key stakeholders (both internally and externally) for
23
business and cultural transformation changes. In addition, Change
24
Management and Communications is responsible for providing the
25
competency development materials and programs (e.g., leadership, skills
26
training, individual performance management) necessary for transformation.
27
Change Management & Communications works within the work streams
28
and extremely closely with the enabling team and other PMO teams to
29
manage change associated with the Transformation efforts.
The change management team is focused on the following
30
31
six initiatives:
32

33
Change Planning: This initiative is designed to evaluate change
impacts and stakeholder support requirements necessary to guide and
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develop communications, sponsorship, training and required changes in
2
human resource practices. It involves the design, implementation, and
3
management of the complete set of change management activities
4
across the work streams and also provides overall direction and
5
guidance for all change management related initiatives unique to each
6
individual work stream.
7

Leader and Sponsor Development: This initiative focuses on working
8
with the OC executive sponsors to develop strategies to effectively
9
transfer their knowledge and support for Business Transformation
Program initiatives to others.
10
11

Communication: This initiative focuses on the design, development
12
and implementation of a communication strategy and plan to support
13
implementation activities during the term of the transformation program.
14
It will include coordination of related work from initiative teams across
15
work streams with internal and external communications efforts.
16

Change Agent Network Management: This initiative focuses on the
17
development and management of a network of change agents
18
established to help ensure consistent messages are provided to
19
employees and to provide a channel for monitoring the preparation for
20
changes in the organization.
21

Training and Organization Development: This initiative focuses on
22
the design and development of necessary training and organization
23
development approaches for initiatives. This also includes the
24
development of a Leadership Academy for PG&E supervisors and
25
managers.
26

Human Resources: This initiative focuses on the redesign of PG&E’s
27
HR organization, programs, policies, plans, and guidelines necessary to
28
institutionalize a new organization culture, including guidance and
29
creation of templates necessary to support initiative job design.
30
D. Initiatives Development
31
As described in more detail in Exhibit (PG&E-1), Chapter 1, PG&E
32
undertook a thorough examination of its core business in 2004. Teams of
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employees reviewed the following key areas of the business: Customer
2
Operations, Energy Delivery (gas and electric) and Asset Management, and
3
Supply Chain. While other areas of our business will eventually be evaluated in
4
a similar fashion, the effort started with those parts of the business that are
5
closest to the customer, while being careful not to take on or implement too
6
much change too fast.
7
PG&E identified and evaluated factors for success in each of the lines of
8
business. An important input in this process was a series of site visits to other
9
utilities (and some non-utility businesses) so PG&E personnel could see first
10
hand how other companies performed a particular process or aspect of the
11
business better. This initial work culminated in the development of a number of
12
proposed initiatives for improving the service business model, with the ultimate
13
goal of attaining our vision of industry leadership.
14
The proposed initiatives and their supporting business cases were
15
preliminary and not yet fully developed, evaluated and ready to implement, nor
16
could the costs and savings of the initiatives be reliably estimated until detailed
17
design was complete. At year end 2004, PG&E management decided to move
18
forward with the Business Transformation Program reflected in the potential
19
initiatives developed by the teams. The next step was to undertake detailed
20
design of the first phase of initiatives.
21
To assist in the initial assessment described above and in the design of the
22
initiatives, PG&E hired Accenture Consulting, a business consulting firm with
23
significant experience and a positive track record in improving and transforming
24
utilities and companies in other major industries.
25
The Phase 1 initiatives are listed in Tables A1-1 to A1-5 in Appendix A.
26
Phase 1 of the Transformation Program focuses on the refinement of the
27
business case for certain initiatives and the design of the specific plans,
28
processes, and requirements to implement them. Although PG&E intends the
29
Business Transformation Program to be broad, individual initiatives will be
30
subject to periodic checkpoints, business case reviews, and approvals to ensure
31
that the benefits of the program are maximized while meeting the demands of
32
PG&E’s business and regulatory requirements.
33
34
PG&E plans to proceed with the program through a series of measured
steps and executive decision points. Decisions to proceed with specific
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initiatives will be taken on a case-by-case basis having regard to overall
2
program objectives, the guiding principles described above, and the
3
requirements of PG&E’s business and regulatory environment.
4
5
E. Principles of Integration
The financial and operational performance benefits of the program will be
6
fully realized only if there is successful integration of program initiatives and
7
effort across all of PG&E’s operating units. Figure 1-3 below presents an
8
excellent example of cross-work stream integration required for one important
9
process, New Business.
10
While new business transformation efforts are being led by the ED/AM work
11
stream, there are key integration points all along the way with component
12
activities and interactions under the direction of the supply chain and customer
13
management work streams—from start to finish. A carefully integrated
14
approach to the design and implementation of the improved new business
15
16
process is clearly a prerequisite for success.
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FIGURE 1-3
PACIFIC GAS AND ELECTRIC COMPANY
CROSS WORK STREAM INTEGRATION EXAMPLE – NEW BUSINESS
1, 3
Start Here
1, 2, 3
1, 2, 3
Closeout /
Account
Management Automated
Closeout if
Within
Tolerances
1, 3
Account
Set-up
1, 2, 3
Service
Initiation
Resource
Forecasting &
Planning / Mtls
Demand Planning
Integrated
Materials &
Resource
Planning
Integration
Points:
1, 2, 3
Call Center,
Web Takes
Application
Accurate
Schedules
Available
• Reduce Cycle Time
(Months to Weeks)
• Lower Cost / Connect
• Improve Customer Sat
(Commitments Met)
1 – ED/AM
Schedule
Commitments
2 – Supply Chain
3 – Customer
Simplified, Standard
Templates,
Compatible Units;
Sourcing;
Permits;
Contracts
Work
Design /
Reserve
Materials/
Customer
Fund Mgmt
Direct
Contractor /
Electronic
Materials / Crew
Links to
Availability
CDx
Schedule
Completed Units,
Crew /
Labor/Payroll,
Integrated
Material /
Materials Usage,
Dispatch /
Vehicles
Returns, GIS
Field Force
Material
updates
Transformation/
Delivery
Supervisor in Field/
Mobile Tech
As Built
1, 2
1, 2, 3
Dispatch
Construction,
Meter Set,
Inspections,
Energize
1, 3
1, 3
Performance Management
Customer Contact
Universal Employee Access
4
5
F. Accenture Contract Structure
The contractual agreement between PG&E and Accenture for the Business
6
Transformation Program allows services to be performed under the following
7
arrangements: (1) time and materials; (2) modified time and materials; and
8
(3) fixed price. The provisions for each of these forms of project services billing
9
is covered in Schedule C of the Master Services Agreement (MSA). It is
10
important to note that this agreement also allows PG&E to terminate at any time
11
without cause. In addition, the agreement specifies that a portion of Accenture’s
12
payment is at risk, subject to a performance assessment framework which
13
includes the success of the program using PG&E’s Performance Incentive Plan
14
methodology, and PG&E’s satisfaction with Accenture’s contribution to the
15
success of the program using a survey-based evaluation methodology.
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1
2
3
4
5
6
The components of the Accenture contract include:
Master Services Agreement. This includes the general terms and conditions
covering a 5-year period beginning January 17, 2005;
Schedule A – Business Transformation Program and Governance Framework
and Processes;
Schedule B – Performance Assessment Framework. This schedule provides
7
the framework and process for PG&E and Accenture to regularly assess
8
Accenture’s contribution to the success of the Business Transformation
9
Program through assessing both PG&E’s satisfaction with the quality of
10
Accenture’s contribution and the success of the program. The Framework
11
shall also be used as a basis to assess any program credits due from
12
Accenture;
13
Schedule C – Compensation;
14
Schedule D – Reserved for Future Use;
15
Schedule E – Acceptance Process for Deliverables;
16
Schedule F – Reserved for Future Use;
17
Schedule G – Reserved for Future Use;
18
Schedule H – Security Requirements;
19
Schedule I – Accenture Competitors;
20
Schedule J – Approved Subcontractors; and
21
Schedule K – Accenture Insurance Coverage.
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APPENDIX A
2
3
4
TABLE A1-1
PACIFIC GAS AND ELECTRIC COMPANY
ASSET MANAGEMENT PHASE 1 TRANSFORMATION INITIATIVES
5
(See Exhibit (PG&E-10), Chapter 2)
Line
No.
Ref #(a)
Initiative Name
Description
1
AM1
Asset Information
Transformation
The Asset Information Transformation
initiative will take PG&E’s numerous
written and electronic data sources and
gather them together in one easily and
electronically accessible location. This
electronic data source will provide
asset information (performance and
maintenance history, location,
requirements, etc.) necessary to
optimize investment decisions,
facilitate system operations, and
optimize job/work grouping and crew
scheduling.
2
AM2
Asset Optimization
The Asset Optimization initiative will
result in fact-based, data-driven
decision-making to promote efficient
capital and expense spending on the
gas and electric delivery system. The
key objectives of this initiative are to
enhance PG&E’s capabilities for
planning and budgeting, both long and
short term, to improve the predictability
of asset performance for various levels
of investment and operating expenses,
and to focus investments to levelize
asset performance to match the
expectations for that asset/facility. The
ultimate goals of the initiative are to
develop a highly structured approach to
managing utility investments, with
consistent treatment and consideration
of regulatory, safety, reliability and
economic factors, and to enable PG&E
to allocate discretionary capital and
expense spending to those specific
areas and items where it will have the
most impact.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
6
A1-1
(PG&E-10)
1
2
3
TABLE A1-2
PACIFIC GAS AND ELECTRIC COMPANY
ENERGY DELIVERY PHASE 1 TRANSFORMATION INITIATIVES
4
(See Exhibit (PG&E-10), Chapter 2)
Line
No.
Ref #(a)
Initiative Name
Description
1
ED1
Work and Resource
Management, Including New
Business Improvement
Opportunity
The Work and Resource Management
initiative is focused on improving
energy delivery work processes, in
particular the design and estimating of
facilities, scheduling of work, the
dispatching (assignment) of work to
crews and/or employees, the
management of large projects, and the
organizational alignment of work
processes. It will introduce
fully-integrated work scheduling tools
and processes that will enable
improved work initiation, resource
management and job closing. The
initiative’s goal is to enable crews to
arrive at a work site with all the
necessary materials already there and
with a complete and consistent job
package.
2
ED2
Field Force Transformation,
Including Supervisor in the
Field Immediate Opportunity
The Field Force Transformation
initiative is focused on improving field
workforce productivity, facilitating the
consistent delivery of field services,
improving emergency response times,
and improving safety. The initiative
has two parts. The first part is the
supervisor in the Field Immediate
Opportunity, which is designed to
enable front-line supervisors to spend
more of their time in the field working
with their employees to focus on
customer satisfaction, productivity,
quality and safety. The second part is
the introduction of mobile computing
tools throughout field processes
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
A1-2
(PG&E-10)
Line
No.
Ref #(a)
Initiative Name
Description
3
ED3
Work Force Flexibility
This initiative will improve the use and
effectiveness of PG&E employees and
contractors by optimizing work
assignment, job duty, and work
scheduling flexibility through existing
and modified labor contract provisions.
Additionally, the initiative will develop
critical contract management
capabilities and rigorous performance
management (service level
agreements) of contractors to
maximize the value of our contracting
relationships.
4
ED4
Electric Operations
Optimization
The Electric Operations Optimization
initiative focuses on consolidation of
transmission and distribution control
centers. The key objectives of the
initiative are: (1) industry-leading
operational effectiveness; (2) increased
customer satisfaction; (3) continued
safety conscious environment; and 4)
reduced operational risk for the electric
system.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
1
A1-3
(PG&E-10)
1
2
3
TABLE A1-3
PACIFIC GAS AND ELECTRIC COMPANY
SUPPLY CHAIN PHASE 1 TRANSFORMATION INITIATIVES
4
(See Exhibit (PG&E-10), Chapter 3)
Line
No.
Ref #(a)
Initiative Name
Description
1
SC1
Strategic Sourcing/Phase 1
Strategic sourcing is a rigorous
process for making sourcing decisions
in order to reduce costs and sustain
high-quality materials and services. It
involves aligning the Company’s
sourcing strategy with the Company’s
operating strategy. Phase 1 focuses
on the strategic sourcing of
five spending categories: office
supplies, meters, wire and cable, staff
augmentation, and travel.
2
SC2
Strategic Sourcing/Phase 2
Phase 2 focuses on six large spending
categories: Transmission and
Distribution (T&D) electrical
equipment, engineering and technical
services, environmental and testing
services, freight, Maintenance, Repair
and Operations (MRO) materials, and
construction/generation services.
3
SC3
Procurement Opportunity Spend
Assessment
The Procurement Opportunity Spend
Assessment initiative is a
comprehensive analysis of PG&E’s
historic purchasing habits for materials
and services. The focus of the
initiative will be on segmenting 2004
spending into logical groupings based
on material or service type, and on the
purchasing technique used to procure
those materials or services. In
addition, the initiative will focus on
building a global strategy on “nonstrategic procurement spending,”
which is characterized by materials or
services that are common to many
businesses, but for which the
spending volume/savings potential
does not warrant strategic
relationships or partnerships with
suppliers.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
A1-4
(PG&E-10)
Line
No.
4
Ref #(a)
SC4
Initiative Name
Materials Demand & Supply
Planning
Description
The Materials Transformation
component of the Supply Chain work
stream is charged with optimizing the
way PG&E plans, procures, and
manages direct materials (those
commonly consumed materials that
are stocked in warehouses as
inventory and which currently flow
through three distribution centers). It
includes initiatives in support of
Materials Demand and Supply
Planning and Materials Distribution
Optimization.
The Demand & Supply Planning
initiative will design the capability
required for PG&E to develop
improved materials demand planning,
and integrate that plan with supply
capacity. The design activities will
focus on process design, organization
design, and technology selection.
5
SC5
Materials Distribution Optimization
The Materials Distribution
Optimization initiative is tasked with
exploring various alternatives for
materials transportation and order
fulfillment across the Company.
6
SC6
Supply Chain Organization &
Process Design
The Supply Chain Organization and
Process Design initiative will define
the capabilities and design the
processes required to support the
transformed company. Capabilities
requiring development include:
Demand Planning, Supply Planning,
Strategic Sourcing, Category
Management, and Strategic
Relationship Management. The
Supply Chain Organization and
Process Design Initiative will result in
recommended high-level, end-to-end
processes and organizational
structure(s) to support the transformed
supply chain organization, and
processes.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
A1-5
(PG&E-10)
Line
No.
Ref #(a)
Initiative Name
Description
7
SC7
Corporate Real Estate (CRE)
Corporate Real Estate (CRE) provides
a building asset management function
for the majority of PG&E’s common
utility plant facilities, and provides
facilities and land rights-related
support services to business partners
in the Utility. The primary functions of
CRE are developing the Company
Real Estate strategy, managing
building projects to construct and
maintain buildings, managing
day-to-day building maintenance and
operations activities, and providing
land rights support for gas and electric
transmission and distribution assets.
8
SC8
Fleet Asset Management
The Fleet Transformation strategy will
require the development of new asset
management strategies and fleet
service capabilities. Maintaining fleet
assets at the optimal age based on
the recommended replacement
strategy maximizes fleet asset
utilization and allows PG&E to
eliminate excess vehicles and
associated costs. The initiatives in
this category include: (1) Fleet Asset
Management Excellence, (2) Fleet
Asset Scheduling and Delivery, and
(3) Garage Operations Efficiency.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
1
A1-6
(PG&E-10)
1
2
3
TABLE A1-4
PACIFIC GAS AND ELECTRIC COMPANY
CUSTOMER MANAGEMENT PHASE 1 TRANSFORMATION INITIATIVES
4
(See Exhibit (PG&E-5), Chapter 1)
Line
No.
Ref #(a)
Initiative Name
Description
1
CS1
Back Office
The objective of the Back Office
initiative is to improve customer service
through improved “exception
processing,” which equates to more
timely bills. The initiative will help to
decrease time spent reviewing billing
exceptions on “no-bill” research and
increase billing accuracy. This will
decrease contact cost per customer
and meter-to-cash days for exceptions.
The initiative will also enable efficiency
gains in the back office.
2
CS2
Credit & Collections
Changes will be made to the
automated collection processes in the
Customer Care and Billing system
(hereinafter referred to as “CC&B
system,” but also formerly known as
CorDaptix) to support improved
collection efficiencies. The current
collection processes will be expanded
to provide additional collection streams
and steps for customer contact based
upon risk factors and internal
collections policies. As part of this
process, customer segmentation and
risk analysis for customers will be
reviewed and expanded in the CC&B
system.
3
CS3
Customer Satisfaction
One of the key objectives of the
Business Transformation Program is
the improvement in overall customer
satisfaction with PG&E. This initiative
will create a “customer view” of the
Business Transformation Program by
coalescing the customer impacts of all
initiatives and defining an operating
model for improving customer’s
satisfaction with PG&E’s delivery of
service.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
A1-7
(PG&E-10)
Line
No.
Ref #(a)
Initiative Name
Description
4
CS4
Customer Care and Billing
(CC&B)
This initiative will include a detailed
review of the technical application
software (Applications) and supporting
technical platforms for those
Applications that are primarily used by
Customer Service and Revenue. The
main goal of this initiative is to
recommend an approach (with a
business case) for moving to an
improved overall solution in these
areas.
5
CS5
Account Services
The objective of the Account Services
initiative is to increase the customer
satisfaction of medium-sized business
accounts while at the same time
maintaining the high level of customer
satisfaction for “key” accounts. The
initiative will lay the groundwork for
improving service delivery efficiencies
by optimizing internal support and
redirecting resources such that the
funding that would have been
otherwise spent can be reallocated
towards enabling the improved service
for medium size business customers.
6
CS6
Customer Fund Management
The objective of the Customer Fund
Management initiative is to improve
customer satisfaction around the new
business process primarily by helping
to reduce the end-to-end new business
cycle time. This initiative combined
with Energy Delivery’s new business
related initiatives will increase
efficiency and standardization in the
end-to-end new business process as
well as improve the availability of data
to all parties involved in the process. It
will also provide a centralized tool to
enter data and reduce the redundancy
of data entry.
7
CS7
Local Offices
The objective of this initiative is to
ensure a high level of service through
local customer payment channels.
_______________
(a) Reference to initiative designations found in Exhibit PG&E-10, Chapter 5.
A1-8
(PG&E-10)
Line
No.
8
Ref #(a)
CS8
Initiative Name
Contact Center
Description
The goal of the Contact Center
initiative is to improve overall
effectiveness by maintaining or
incrementally improving customer
service levels while reducing operating
costs. This will be accomplished by
improving the acceptance and
satisfaction levels of customer self
service options, increasing first contact
resolution, reducing repeat calls and
improving overall performance.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
1
A1-9
(PG&E-10)
1
2
3
TABLE A1-5
PACIFIC GAS AND ELECTRIC COMPANY
INFORMATION TECHNOLOGY PHASE 1 TRANSFORMATION INITIATIVES
4
(See Exhibit (PG&E-10), Chapter 4)
Line
No.
Ref #(a)
Initiative Name
Description
1
ITT1
IT Governance
This initiative will design a PG&E IT
governance model and related
processes to enable effective IT
decision making and management
functions, aligned with the overall
program governance model and the IT
Architecture initiative.
2
ITT2
Definition of Baselines
This initiative will research the current
state of the IT business within PG&E
and use this information to design
appropriate plans for the other
initiatives.
3
ITT3
Consolidate/Reorganize IT
Staffing
This initiative will consolidate and
reorganize the IT staffing within PG&E.
Industry benchmarking shows that
standardization is more effectively
applied when it is directed by a central
IT organization.
4
ITT4
Transform IT Strategy &
Architecture Capabilities
This initiative will expand the emphasis
of enterprise standards across all lines
of business, and will centralize all
strategic planning to ensure
appropriate support of the business
transformation initiatives.
5
ITT5
Solution Development – Center of
Excellence
Business transformation will require
extensive investment in IT. In order to
support the business, the application
development processes must be
improved to handle large volume of
change in a rapid and consistent
fashion. To achieve this capability
quickly, PG&E will be creating a
“center of excellence” (COE) for its
application development. A COE can
be defined as a virtually centralized
organization that leverages multiple
products and services in the delivery of
specific, focused business solutions.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
A1-10
(PG&E-10)
Line
No.
Ref #(a)
Initiative Name
Description
6
ITT6
Transform Service Level
Management
Service delivery organizations such as
IT must be able to measure and
monitor agreed to service levels in
order to ensure the business is
receiving the highest value added
service for the cost. This initiative
includes the following three activities:
(1) Service Level Agreements
Definition and Management, (2) Reset
Existing Service Levels, and
(3) Account Management Enablement.
7
ITT7
Rationalize and Consolidate
Devices
This initiative bundles multiple
infrastructure consolidation and
rationalization projects. Standardizing
on a minimal number of hardware
platforms leads to economies of scale,
minimization of support costs and
complexity, and an increase in the
speed of delivery of IT services.
8
ITT8
Solution Maintenance and
Service Delivery Sourcing
This initiative will include the evaluation
of sourcing options for staffing IT
functions in context with the other
initiatives in order to provide the
highest level of value.
9
ITA1
Enterprise Application Integration
(EAI)
This initiative will refine the company’s
IT integration architecture by
standardizing to one operating platform
and involve the development of an
Enterprise Application Integration (EAI)
strategy, standards and architecture.
This integration will enable several
Transformation initiatives, including:
Work/Design Transformation, Asset
Optimization, and Materials
Distribution Optimization.
10
ITA2
Enterprise Internet Platform –
Phase 1
This initiative will create a consistent
technology platform for all Internet and
Intranet applications. This initiative
(Phase 1) involves planning and the
selection of a technology platform.
Phase 2 will involve implementation of
the Internet platform
11
ITA3
Enterprise Data Management/
Warehouse
This IT infrastructure system will
provide a foundational directory
service which will allow business
applications to readily find the primary
source of data, and eliminate the need
for individual applications to keep
duplicate data.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
A1-11
(PG&E-10)
Line
No.
12
Ref #(a)
ITA4
Initiative Name
Application Rationalization –
Phase 2
Description
This initiative will review the
applications which are not affected by
the business transformation initiatives,
and develop business cases for the
consolidation or retirement of them.
_______________
(a) Reference to initiative designations found in Exhibit (PG&E-10), Chapter 5.
A1-12