Vanilla system powers up utility to save $1.5m

When Northern Territory's Power and Water went commercial and chose a "vanilla" IT system, it set itself up to save $1.5 million a year.

NT's Power and Water, which became a government-owned corporation on July 1 2002, found remodelling its IT systems and processes key to the success of its transition from a state-run authority to a commercial entity.

With assets in excess of $1.2 billion and 680 employees spread throughout offices in Darwin, Katherine, Tennant Creek, Alice Springs and Yulara, Power and Water is the territory's premier provider of electricity, water and sewerage services.

Andrew Macrides, general manager, business services for Power and Water, said planning for the transition to commercialisation began about two years ago when a board of directors was appointed for the authority.

A major review of IT was conducted he said, when it became clear the systems' capacity needed to be increased to go forward.

High on the hit list was replacing the financial system, which included an off-the-shelf mainframe accounting software package used by all NT Government agencies, and the customer billing system (another in-house solution), which is about to go to tender.

"Within our financial systems we had four legacy mainframe systems [two in-house, a Masterpiece and Mincom product] that were not well integrated and cost a lot of money to run. It also look a long time to get information out of the systems ? and a lot of manual work to produce beneficial reports."

Macrides said that after a fairly lengthy process of documenting how the business operated and how the financials were managed in-house, a change management process was put in place and a public tender was called for an integrated solution to replace the legacy systems.

"The board wanted us to have a 'vanilla' system with little customisation. Also, it didn't want the new and old systems to run parallel. And the new system had to be in place by July 1."

Jim Bamber, manager business systems and information management for Power and Water, said after a year-long process of tendering, evaluation, negotiation and design, Oracle Financials went live on April 2 this year.

Including hardware, software, implementation and labour costs, the project was a $7 million investment, with an ROI period of three and a half years, Macrides said.

Bamber said up to 20 full time IT people were involved in the project, including Power and Water staff and vendor staff. "This was because it was a compressed project."

Conversion was the most "interesting" part of the implementation Bamber said, as the team had to deal with four legacy systems and many spreadsheet applications.

The implementation went "smoothly", Macrides said, due to the preparation undertaken during the design phase.

"During the design phase there was an emphasis on system configuration. We identified the surplus processes and the less-than-desirable ways of doing things. We had to realign processes to suit the 'vanilla' way of doing things.

"There was also a fair amount of training required [before deployment], data conversion and documenting to [ensure ease of] cut over to the new systems."

Bamber said while the company had realised the importance of training -- especially within the financial area where collectively staff had more than a century worth of experience on the systems - "in hindsight I think we could have improved on this".

While the system is now up and running, Bamber said the project has not finished for the IT team. "All we have done so far is a box drop, the second phase is a benefits realisation study. We will be working with business on this."

Another system updated for the July 1 changeover was the works information system, which manages the company's assets.

Macrides said this system was "key" to the business to understand the age of the utility's systems. Power and Water invests more than $40 million a year on such investments and a similar amount to maintain and repair existing assets.

The system runs on an Empac product called Indus; the standard industry interface. Since Oracle Financials and the Empac product had an established gateway, Macrides said the Oracle Project Costing module was implemented in conjunction with Financials, to streamline procedures.

Apart from the customer billing system, Bamber said the remaining cornerstone to the utility's revamp of IT is the geographic information system (GIS).

Presently this is an in-house system, which has been in place for 10 years. "We have undertaken a cheap product upgrade, but we are looking for an off-the-shelf product. We now tend towards packages."

Copyright © 2002 IDG Communications, Inc.

Shop Tech Products at Amazon