Transalta: How a Power Company Saved Time and Reduced Capital Expenses Through Better Project Portfolio Management
 

Transalta: How a Power Company Saved Time and Reduced Capital Expenses Through Better Project Portfolio Management

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TransAlta Corporation, a Canadian power generation and wholesaling company, needed to better “compare apples to apples” when selecting its portfolio of capital projects across fuel types and ...

TransAlta Corporation, a Canadian power generation and wholesaling company, needed to better “compare apples to apples” when selecting its portfolio of capital projects across fuel types and investment streams.

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Transalta: How a Power Company Saved Time and Reduced Capital Expenses Through Better Project Portfolio Management Transalta: How a Power Company Saved Time and Reduced Capital Expenses Through Better Project Portfolio Management Document Transcript

  • Case Study: Enterprise Portfolio Management ORGANIZATION PROFILE TransAlta Corporation is an electricity power generator and wholesale marketing company headquartered in Calgary, Alberta. It operates over 70 power plants in Canada, the United States and Australia. TransAlta’s operates geothermal, wind, hydro, natural gas and coal power generation facilities. How a Power Company Saved Time and Reduced Capital Expenses Through Better Project Portfolio Management “We knew that some sort of project portfolio management was foundational for our future competitiveness in the marketplace.” - Carl Souchereau, Director of the Enterprise Project Management Office INDUSTRY Utilities SIZE 2,400+ employees COUNTRY / REGION C Canada, United States, Australia TransAlta Corporation, a Canadian power generation and wholesaling company, needed to better “compare apples to apples” when selecting its portfolio of capital projects across fuel types and investment streams. It wanted to make better decisions and reduce time spent searching for information. SOFTWARE USED:  UMT 360 SITUATION  Microsoft Project Server TransAlta is the largest power generation and wholesale marketing company in Canada. “What makes our situation particularly complex,” says Carl Souchereau, Director of the Enterprise Project Management Office at TransAlta, “is that we generate electricity through five different fuel types: coal, natural gas, hydro, wind, and geothermal.” ABOUT UMT CONSULTING UMT is a recognized provider of Project Portfolio & Integrated Portfolio Management solutions and management consulting best practices. For over two decades UMT has helped Global 2000 companies gain transparency across their business and technology asset portfolios, rationalize costs, collaborate to make smarter investment decisions and maximize ROI. UMT is Microsoft's Worldwide PPM Partner of the Year 2013 and has been twice named a Gartner Cool Vendor in PPM and is positioned as a Visionary in Gartner's Integrated IT Portfolio Analysis Magic Quadrant. some sort of project portfolio management was foundational for our future competitiveness in the marketplace.” SOLUTION TransAlta discussed its needs with several potential providers, and eventually chose UMT. “What UMT brought was a simplified, automated, fast method of boiling down a vast Souchereau says, “In choosing which universe of data to a meaningful subset projects to do, we had no mechanism to on which executives could make compare apples to apples.” High-level decisions,” Souchereau says. executives thus spent a great deal of UMT Senior Vice-President Richard time debating capital investments during Evans was impressed with TransAlta. their annual budgeting sessions. “Too often project portfolio Furthermore, they found these debates management is just an IT initiative—in frustrating because they knew they part because of this very complexity in could make better decisions if their data comparing projects across disciplines,” sources could cut through complexity to he says. “But TransAlta was committed provide objective criteria. to enterprise-wide transformation.” “We didn’t yet know what we needed,” Souchereau says, “UMT had a very good Souchereau says, “but we knew that approach. Most importantly, they were www.umt.com
  • not pushy. They listened, they sought to Meanwhile, however, Souchereau sees understand our pain points and what we project management as a world of wanted to accomplish. They were patient, continuous improvement. He sees three and wanted to keep the solution simple and user-friendly.” With strong encouragement from UMT, Souchereau developed a working group of project managers from different TransAlta sectors to design and test the solution. “Culture is a tough nut to crack,” Souchereau says. “We knew that for this solution to be effective, the change management surrounding it had to come from the business users, and not be pushed down from on high.” UMT assisted in the design and configuration of the solution and the training of users. “UMT didn’t just dump it in our lap and run,” Souchereau says. “They helped us with change management, staying to train and teach, which we really needed.” The resulting Project Portfolio Management System (PPMS) is TransAlta’s system of record for the creation, selection, planning, and management of all projects in the company regardless of size, complexity, or investment type. PPMS—which is built on Microsoft Project Server, UMT 360, and Microsoft SharePoint Server—uses a structured series of tasks and workflows to assist the organization at all levels to make the best use of time, money, and people. TransAlta now does its annual budgeting in PPMS rather than its SAP enterprise resource planning solution, making the process easier for executives and eliminating the time spent on manual uploads. Looking forward, TransAlta is interested in tackling asset management. “We have capital-intensive investments in assets such as coal plants that have a defined lifecycle,” Souchereau says. “If we could map that lifecycle in PPMS, scheduling maintenance routines and other projects, we may be able to both improve our longrange forecasting and ensure that we’re maximizing the value of these assets.” keys to success in implementing projects: defining scope, aligning interests, and executing with discipline. BENEFITS & BUSINESS IMPROVEMENTS 1. A single source of the truth. Souchereau says the top benefit of PPMS is that it provides a single place where anybody can find up-to-date information about projects. “If somebody has a question about the portfolio, they don’t have to ask ten different people and get ten different answers—they can look it up in PPMS,” he says. 2. Time savings. In the fall of 2012, Souchereau took top executives through the annual capital budgeting process using PPMS, not SAP, for the first time. “The process took a fraction—less than 25 percent—of the time we had spent previously,” he says. “This was a huge benefit, because these executives’ time is so valuable. Our improved efficiency in capital reviews, by itself, paid for the cost of the solution.” Project teams also save time throughout the year by using the system’s reporting functions. “The preformatted reports have not just reduced but eliminated the time that project teams used to spend doing reports,” Souchereau says. “If project sponsors or reviewers want an update, they don’t need a custom report—all they have to do is refresh the software to get the most current information. So the project team can spend less time reporting and more time working.” 3. Improved decision making. Souchereau is already seeing benefits in earlier flagging of projects ripe for deferral. “Where under the old system we might not decide to defer a project until the fourth quarter, now we have the data and the comprehensive view to make that decision earlier, often in the second quarter.” When a project is not ready, TransAlta can liberate the people and money that had been earmarked for it to do higher-priority work. Souchereau expects this improvement to reduce capital expenses for the company as a whole. “I don’t have the numbers yet—it’ll take at least a year to show up—but I know that we’re better at choosing projects based on profitability,” Souchereau says. By choosing projects of higher value, and more quickly eliminating lower-value projects, Souchereau expects that TransAlta will have accomplished the same amount of work with reduced capital expenses. 4. Better capital stewardship. Making better decisions is one important component of using capital wisely. Another is ensuring sound execution of those decisions—and PPMS is helping with that as well. On one level, it frees project managers from reporting duties so that they can have more time to focus on execution. But on a deeper level, because TransAlta is using a single project management system, it is moving diverse sectors into more standard methodologies. “We now have our hydro projects and gas projects, for example, using the same reports,” says Souchereau. “Our teams are using the same templates and workflows. And because our project managers are always planning, scheduling, and executing projects the same way, they can more easily move among sectors.” Evans, of UMT, notes that these changes are likely to have far-reaching benefits. “Most journeys into improved portfolio management are about creating a culture of better decision making and swifter execution,” he says. “I’m impressed with TransAlta’s first-year efficiency gains, but I think even more profound value is yet to come.” The information above is being provided by TransAlta Corporation without consideration and TransAlta Corporation does not make any representations or warranties in regards to either UMT or the PPMS. The experiences of TransAlta have been identified as being specific to TransAlta and there is no assurance that other company’s would experience similar results or achieve comparable benefits; and the actual results may differ materially from those identified by TransAlta and UMT above. 1 Battery Park Plaza, 4th Floor, New York, NY 10004, (212) 965-0550 | Copyright © 2013 UMT. All Rights Reserved