My Client case study SAP IS utility solution for power

1. Strategies for Performance
Improvement for Distribution Utilities
Role of Technology and
Operational Practices
Aditi Tarafdar
Project : XXXXXXXXX
2011 Jan

2. Presentation Flow
 Part I - Introduction to XXXX
 Part II - Reform framework & Business Model
 Part III – Challenges Faced by XXXX
 Part IV - XXXX Business Strategy & Improvement Initiatives

3. Part I
Introduction to XXXX

4. Geographic Description

5. XXXX Profile
XXXXis an internationally acclaimed enterprise which specializes in
manufacturing of PV solar modules. Since our inception in 2006,
we have gradually developed ourselves to become one of the key
players among mono crystalline and multi crystalline photovoltaic
solar module manufacturers.
manufactures state of the art solar photovoltaic (PV) modules, mono
crystalline and multi crystalline types, which supply sustainable solar
electric power to both on and off-grid residential, commercial as well
as industrial establishments. We offer a wide range of solar PV
modules from 5 Wp to 300 Wp. As a part of our ongoing expansion
plan we look forward to increase our production capacity to 100MW
by 2011.

6. Part II
Reform Framework

7. Local Reform Framework
 No precedent of successful Privatization elsewhere in the country; Orissa
Privatization had failed
 DVB main challenge was high AT&C Losses
 DVB Balance Sheets restructured working backward from Tariff Supportability
 AT&C Loss Reduction Targets 53% to 31% in 5 years (Public Interest)
 16% RoE subject to achievement of Targets. Downside 100%, Upside 50%
share
 Regulatory Risk Mitigated
 Normative Tariff Order (prior to bidding) fixing the principles of Cost
Recovery + Return
 Regulator consulted prior to unbundling and bound by Transfer Scheme
 Funding of Terminal Benefit Liabilities; Other Contingent Liabilities

8. Reform Framework…Cont…
 Employee Uncertainty addressed through Tripartite Agreement
 Clean Balance sheet transferred
 Past liabilities on DISCOMs capped at Rs. 1 cr per annum
 Past Receivables belong to GoNCTD – Collection Commission 20%
 Power to settle old disputes – limited delegation to DISCOMs
 For 5 years DISCOMs to concentrate on reducing AT&C Losses and Network
Improvement and Transco to continue with Bulk Power Purchase

9. Reform Framework…Cont…
XXXXX Power Board Assets
Liabilities & Equity
1. All the assets and 2. All the liabilities of DVB are transferred to
liabilities of DVB are Holding Company, entire Equity of Holding
acquired by GoNCTD Company is issued to GoNCTD
GoNCTD Holding Company)
3. All the assets are
transferred from 4. Equity and Debt in the
GoNCTD to successor successor entities,
entities. Assets equal to the value of
assigned a value Serviceable liabilities
equal to serviceable is issued in favor of
liabilities the Holding Company.
AAAA. BBBB CCCC CCCC- 2 CCCC-3
Offered for privatization - effective July 2002

10. Business Model
Financial Support From Government During Transition Period
Revenue from retail Expenses and return
supply CCCC Expenses – approved by Regulator
(Less due to present losses) Return – Guaranteed – 16%
Balance amount for Bulk Supply Purchase
(DISCOM’s Paying capacity)
Loan From Government
Payment to AAAA TRANSCO The Transitional Support
To make up loss

11. Key Features of XXXX’s Business
 License based Regulated business – license for 25 years.
 Top and Bottom line regulated business wherein -
 Regulator approves the Capital expenditure, Revenue expenses and RoE
(provided the annual committed AT&C Loss level is achieved)
 Retail Tariff to remain same throughout locations
 Key Success to reform was Commitment to reduce AT&C losses by
17% over 5 years and to bring down the losses from then determined 48% to
31%
Both top and bottom lines of the business is capped with restrictions on
expenditure and ceiling on returns.

12. Part III
Challenges faced by XXXX

13. Challenges addressed through PPP Model
High AT&C losses
• Incentive to overachieve Targets
• Penalty for not achieving Targets
• Solutions need to be sustainable requiring long term approach
• High Capex Involved in Technology Interventions-HVDS, SCADA, AMR
• Effective Enforcement by follow up in Courts
• Flexibility for Settlements (out of Courts)
Lack of Service Orientation
• Public Tolerance is high with Electricity Boards & less with private players
• High Expectations from private players push performance
Reliability of Supply: Needs huge Capex to modernize Networks
Regulation: Issue of Regulators autonomy can be a problem when public sector
is to be regulated
Pressure to perform: Subsidies are easy way out for SEBs but not for private
players

14. Consumer Interfacing
Front-end Back-end
Generator
UTILITY
Tx. Utility
Govt.
Consumer Trader
Regulator SLDC
It’s been a challenge meeting the consumers’ expectations, and perceived to
be responsible for actions of others.

15. Stakeholders Expectations
STAKE HOLDERS EXPECTATIONS
Advent of consumerism and consumer delight in retail electricity
Consumers
distribution
Investors Safety & enhancement of their investment /
Ventures
DERC Compliance to billing, metering, tariff
Regulation & performance standards
Balancing the development & stakeholders
Interests.
Government Early success of the reform and privatization
Process
Employees • Better working conditions
• Personal and professional development
• Empowerment at all levels
• Enhanced communication
• Improvement in compensation & incentives

16. Consumer Interface with Distribution Utility
We needed to know our consumers’ priorities

17. Way Forward: Changing Roles
 From arrogance of Monopoly to Softness in competition.
 From Activity to Result (measurement) culture.
 Efficiency to Effectiveness.
 From Reactive to Proactive approach.
 Quantitative to Qualititative approach.
 Using Hierarchal authority to authority of Expertise and Concern.
 We have always done this way to we can do differently.

18. Emerging Trends in Automation
 Enterprise application (ERP)
 Automatic Meter Reading (AMR)
 Geographic information System (GIS)
 Communication Infrastructure
 Grid Station & Distribution Automation
 SCADA/EMS/DMS
 Outage Management System (OMS)
 Integration with Enterprise Application

19. Part IV
XXXX’s Business Strategy
&
Improvement Initiatives

20. Sustained Initiatives for Improvement
A Step-by-Step Approach
Poor
Consumer
Services
AT&C
Losses Identification of
3 Broad Areas
for
Network
Constraints Improvement

21. Strategic Roadmap – IS Power & Utility plan
Strategy for current fiscal
1,00,000 No planned exp.
5400 erstwhile
>50% backlog on infrastructure
DVB staff with
complaints improvement
Unfavorable
past 3yrs
working conditions
AT&C Losses Consumer service & System Reliability to Performance
<25% IT Interface to be be comparable with Orientation through
comparable with world best utilities in India. Change Management
standards

22. Information Technology Roadmap
50 OFFICES D
SCADA I
C
O S
TRANSCO CRM A
M S
M GRID STN (6)
EMS T
Billing E
W R
XXXX
N GRID STN (52) SAP E
B R
E E
T DA DMS GIS C
W DIST SUB STN O
O (4000) V
AMR
R E
K R
CUSTOMERS Y
OMS Call Centre

23. System Reliability
&
Technological Interventions

24. Benefits of SCADA
Financial Benefits
Quick restoration ► Reduced interruption ► More energy sold
Optimised network design ► Being evaluated
Leasing communication network ► Alternate revenue stream
Remote ops ► Unmanned stations ► Reduced admin/salary costs
Operational Benefits: Reduced Outage Time
Switching & Restoration Time ► Improve SAIDI, SAIFI
Reliability of Supply ► Improve Customer Satisfaction
GIS & OMS Integration ► Improve Customer Service
Load Forecasting & Scheduling ► On “Day Ahead” Basis
Safety Benefits: Enhanced Life of Equipment
Safety Tagging & PTW ► Eliminate Parallel Operation & Back-feed
Network Mapping ► Optimised Load Transfers
Equipment Monitoring ► Optimize Maintenance
Network Parameter Monitoring ► Eliminate Overloading Outage

25. Embracing New Age Technologies
Geographical Information System – SAP
SAP GIS Solution used primarily for the following 3 purposes:
•New Connection Management and other consumer services.
•Immediate Redressal of No Supply Complaints
•Network Planning & Management
 All Utility network assets including Grids,
Substations, Feeder Networks are mapped.
 Global Positioning System is used for
accurate positioning of assets which is
critical from operational point of view.
 All Consumers as available in CRM of the
XXX are geographically captured.
 Consumer’s LV network feeding points
(poles/pillars) are marked on the map.

26. Benefits Reaped from SAP GIS
 System Improvements schemes being built on GIS which resulted in savings of
approximately Rs.30,00,000 in the very first system improvement scheme
approx. ten (10) percent of Scheme value
 Direct Savings/Benefits derived out of GIS project – Rs 12600000/- in the
very first year of completion of project
 Arrears worth Rs 1,94,57,393/- were recovered using the location map
extracted out of GIS.
 Technical feasibility time has reduced drastically leading to increase in customer
satisfaction.
Total investment - Rs. 3.7 Crores
Savings - Rs. 3.5 Crores
Payback Period - Approx. 13 months

27. Integrated Business Processes
Capital Expenditure Management
Asset Management
Operations and Network Management
Commercial Management
Legend
Business Process GIS Interface

28. Operational Practices
&
Consumer Services

29. Strategic Approach: BPR
BPR Approach
Technical Operations Commercial Operations
•Centralized
•Decentralized
•Consumer Segmentation
•Empowerment to Zones
•Benchmarking for
•Profit Center
Consumer Service
Zones and Districts are our consumer interface – be it power supply or any
commercial issue. THEY OWN THE CONSUMERS……

30. BPR - Revenue Cycle Processes
Commercial Process Reengineering – an industry first!

31. Strategic Approach: Consumer Segmentation
Consumer Segmentation
High Revenue Base (HRB) High Consumer Base (HCB)
•Personalized
Approach
•Centralized
Approach
•Account Manager
•Maximize Technological
•Value Added Services
& Minimize Human Intervention
•Reducing Consumer Footfalls
Consumer Segmentation - differentiated delivery of services as per the
specific needs of each segment.

32. Revenue Discipline - Differentiated Bills
 Bills reflecting the Arrear Status of
consumers –
Disconnection Notice goes along the Red
Bill which leads to optimization of costs
also.
- social stigma attached to it.
Concept of Consumer Credit
Rating also being Introduced

33. Reducing AT&C Losses

34. Metering Systems – plugging the Revenue leakages
 Meter Repository System - each Meter is issued
against a specific K No. based on a random selection
through a customized application.
 this eliminates the probability of misuse &
installation at misdirected place – institutional check
on manipulation.
• 60% of the Revenue gets generated through MRS Screen shot
Automated Meter Reading (all high end
consumers > 15 kW)
• Pre paid Metering – enables consumers to track
and monitor their consumption.
Prepaid meter GSM Modem with meter

35. Other Schemes
Sankalp
Scheme was launched with objective of
improving Billing and Collection
Efficiency through increased Employee
participation
JJ Cluster Scheme
Sahyog
This Scheme (Franchisee) was
launched to reduce AT&C losses in
clusters of low income group habitats.

36. Contribution from Zone/District
Zones develop and suggest their action plan, by including, but not limited to, the
following into their strategy for reducing the AT&C losses in their respective
zones:
• HVDS Implementation
• LTABC Implementation
• Local Enforcement
• Load shedding
• JJ cluster connections through advocacy with area MLA/NGO etc

37. Change Management
&
Performance Orientation in IS –
Utility integrated with other Core
module SAP HR

38. Initial Challenges in current fiscal
Human Resources & Administration
 An anxious workforce, disillusioned with the post
privatization scenario.
 No Corporate structure with absence of key
functions such as HR, Finance, Commercial etc.
 Poor working conditions and unhygienic Building
Environment.
The foremost priority was to earn the Right to Govern in
the psyche of the employees by developing a sense of
assurance in their combined ability.

39. The Legacy inherited as on this fiscal
 Huge manpower strength of 5638 employees (none of whom)
 Lack of accountability, initiative and service attitude
 Poor employee data bank
 Erratic nature of promotions and transfers
 Non-existent training facilities
 Multi-levelled hierarchy with only a handful executives
 No corporate structure in existence for functions like hr, admn.
 Ambiguity of roles and responsibilities
 Dilapidated / unsanitary buildings / offices
 Absence of employees welfare activities
 Ineffective attendance system
 Large gaps with reference to TATA work culture

40. Organization Structure & Manpower
 Management Audit conducted through a reputed
external agency to gauge the expectations of the
inherited employees.
 Organization Structure defined, with clear
Manpower Planning for each department
 Voluntary Separation Scheme introduced–
towards right sizing the organization.
 Induction of New Talent – ETs & MTs as
catalysts for the Change Management.
 Set up of Vigilance & Internal Audit groups for
institutionalizing organizational discipline.
Corporate set up in place – focus on Roles & Responsibilities through
specific JDs & KRAs of individuals

41. Organizational Performance Alignment
- Catch Ball Theory
VISION & MISSION
O
P
CORPORATE MIS M
S
Mapping the Initiatives thro Perf. Scorecards D
P
9 Grps. 3 Grps. Dst.,Zn TS&P 5 Grps. 6 Grps. 5 Grp. M
S
I
P
JD/KRA JD/KRA. JD/KRA. JD/KRA. JD/KRA. JD/KRA. JD/KRA.
M
S

42. XXX Corporate BSC (OPMS)
F1 – Achieve
F1 – Achieve
prescribed rate of
prescribed rate of
return
return
- Be EVA Positive
- Be EVA Positive
Financial
F2 – Grow F4 – Enhance sales F7 – Reduce
F7 – Reduce 5% F8 – Reduce
F2 – Grow F4 – Enhance sales 10% F8 – Reduce
15% revenue in
revenue in thru partnerships
thru partnerships unit cost of
unit cost of cost to serve
cost to serve
20% F6 –Reduce
F6 –Reduce power
non-regulated
non-regulated e.g. time of day
e.g. time of day 10% power
business
business tariffs etc.
tariffs etc. F5 –
F5 – fixed cost of
fixed cost of purchased
purchased
F3 – Reduce
F3 – Reduce Reliability of network per
network per
Reliability of
commercial
commercial supply input unit
input unit
40% AT&C losses supply
AT&C losses
30%
35% 20% C3 –Low Revenue Base
C3 –Low Revenue Base 10%
Customer
C1 -High Revenue Base
C1 -High Revenue Base C2 -Government
C2 -Government C4 -Franchisees
C4 -Franchisees
-High reliability
-24 x 7 -24 x 7 -Accurate -F air margin return
-Premium service -Premium service metering/billing -F air terms
quality quality -Timely connection -Hand holding
-Promptness -Promptness -Convenient payment
-Reducing cost -Reducing cost modes
-Communication -Communication -Timely information
-Flexibility -Flexibility
20% 15% 30% -Prompt redress 15% 20%
Customer Relationship
Customer Relationship
Advocacy
Advocacy Service Delivery
Service Delivery Loss Reduction
Loss Reduction Cost Leadership
Cost Leadership
Management
Management
P1-Ensure
P1-Ensure P7- Ensure P18-Right P22-Identify
P22-Identify
P7- Ensure P18-Right 15%
effective
effective adequate P11- Ensure 40%
P11- Ensure size lower cost
lower cost
P4-Brand
P4-Brand adequate 20% P15-
P15- size
enforcement
enforcement 20% supply to meet meter
meter organisation finance
finance 15%
building
building supply to meet Convenience
Convenience organisation
load replacement
replacement to improve
Internal Process
load to improve
P2- Achieve
P2- Achieve P23-Improve
P23-Improve
productivity
productivity
opinion/envir
opinion/envir P8- Ensure
P8- Ensure P12- Effective treasury
treasury P26-
P12- Effective P16-
onment 25%
onment network
network 40% billing & P16- P19-Optimise
P19-Optimise management 10%
management Identify
billing & 30% Transparency
shaping
shaping P5-Policy availability
availability recovery Transparency procurement
procurement cheaper/
P5-Policy recovery
advocacy process
process P24-Improve
P24-Improve alternate
advocacy 25%
P9- Timely
P9- Timely P13- Effective P17-
P17- capital
capital power
P3-Consumer
P3-Consumer P13- Effective P20-Identify
P20-Identify
connection
connection 15% enforcement Effective/timely
Effective/timely efficiency 20%
efficiency sources
communication
communication enforcement savings from
savings from
20% 30% grievance
grievance 10% 20%
outsourcing
outsourcing
handling
handling 100% P25-Improve
P25-Improve
P6-Advocacy
P6-Advocacy P10- Reliable
P10- Reliable
P21-Identify
P21-Identify project
project
for enhancing
for enhancing billing
billing
10% 25% process cost
process cost management
management
consumer base
consumer base
improvements
improvements processes 10%
processes
L1- Staff competency L2- Infrastructure
L3- Culture
-Upgrade the workforce -Recruit/retain the best people -Achieve 100%
Learning &
-Communicate expectations -Encourage innovation & creativity
-Identify & develop key people automated processes
-Change attitudes (ownership -Make work environment productive, &
Growth
/commitment/customer focus
-Enhance employee engagement -Drive business excellence
conducive to performance
-Improve decision making thru KM
-Imbibe the value system
- Capture & disseminate external

43. Institutionalizing Performance Management
Data Warehousing through applications such Implementation of SAP SEM
as SAKSHAT, DEBS, BBS etc. - Management Cockpit
Query for report from
Different systems
Systems

44. Review & Improve
 Goal Setting Meeting
Participants Agenda
Name
 Revisiting of Measures,
Corporate BSC Reviews,
Targets & Initiatives for CEO, COO, Senior
Organizational Policy Issues,
MTM Advisors, all HODs
FY08-09 comprising MTM
Business Excellence , Cross
functional Issues
 Every Functional Review
COO, Head
through BSC Commercial, MTM Commercial BSC Review,
CRM
 Rolling of all Functional Members, Circle Heads, Commercial Issues
concerned Dept
& Corporate BSC
through SAP COO, Head Operations, Operation BSC Review,
NRM MTM Members, Circle Operational Issues, District/Zonal
 Link all Issues to the Heads, concerned ZMs Scorecard Review Performance
Measure of BSC COO, MTM ,
HOD(CE&C), HOD Infrastructure issues, security,
 Institutionalization of IRM
(Governance), concerned Training, Administration Issues,
Departmental Scorecards Dept.
 used as Review Tool Functional Heads &
FRM Group Performance Review
 Widening scope to cover respective Dept. HOGs
AMCs ORT/
Head Operations, Circle
PRT/ Circle, district specific Issues
Heads, concerned ZMs
CRT

45. District/Zonal Scorecard
Knowledge and Learning sessions conducted – sharing of best
practices among the zones

46. Grid Score Card
Performance November 2004
Emergency Preventive Equipment Safety
Weightage OT / Employee
Shut down Maintenance Breakdown Accidents
Rank Units Rs Nos. Marks Nos. Code
100 20% 20% 40% 10% 10%
1 Pitampura III 1331 1 94.80 0 0
2 Trinnagar 1445 1 137.00 0 0
3 S G T Nagar 1730 0 121.10 0 0
4 Ranibagh 1573 0 115.00 0 0
5 Jahangirpuri 1464 2 82.00 0 0
6 Pusa 1821 0 97.80 0 0
7 Rohini V 1865 0 72.60 0 0
8 Rohini Sector 23 2032 0 82.80 0 0
9 Gulabibagh 1368 4 72.40 0 0
10 Inderpuri 2052 1 78.10 0 0
33 Civil Lines 2 2058 7 79.10 1 0
34 Rohini IV 2009 0 58.10 0 0
35 Ashokvihar 2256 2 49.80 0 0
36 Rewariline 2302 7 73.80 1 1
37 GTK 2373 3 64.40 1 0
38 Shalimar Bagh 1928 DNA 65.70 0 0
39 Mangolpuri I 2372 1 56.40 0 0
40 Pitampura I 2401 7 50.40 0 0
Not Complete, for Illustration purpose only.

47. Projects Scorecard
PROJECTS PERFORMANCE SCORE CARD
S.No Index METRO URBAN NARELA BAWANA TOWN CITY
8.57 7.85 6.17 4.84 5.82 6.02
1 Project Average Duration Completion
6.82 7.86 8.61 6.00 9.97 12.81
2 Project Management
2.50 8.00 7.69 10.00 0.00 5.00
2.1 Adherence to Project Time Schedule
0.00 2.75 2.68 5.71 2.27 1.25
20.00 17.53 9.49 7.36 13.49 9.20
2.2 Value of Work executed.
9.18 18.09 20.00 11.42 7.19 7.21
5.00 2.06 1.30 5.00 3.64 1.44
3
Deployment of Corporate 1.66 Divisional Balanced0.60
Quality of Work
5.00 & 5.00 5.00 3.13
4 Safety of Work Scorecard from0.10
0.05
3.16
April 2006. 0.28
4.15
0.21
4.10 2.50
0.05
3.33
0.03
5.00
0.08 0.00 5.00 0.00 0.00 0.00
5 Innovation
1.95 5.00 0.85 0.77 0.00 0.58
5.00 5.00 5.00 5.00 5.00 5.00
6 Compliance to statutory requirements
5.00 3.75 5.00 5.00 5.00 5.00
5.00 5.00 5.00 5.00 5.00 5.00
7 Contract Closing
5.00 5.00 5.00 5.00 5.00 5.00
15.10 12.79 11.41 8.70 10.59 10.59
8 Suyojna/Online Progress orientation
18.30 19.04 17.37 20.00 19.43 19.06
CUMMULATIVE SCORE FOR FY: 05-06 59 63 59 53 46 47

48. Monitoring AT&C Losses
Not Complete, for Illustration purpose only.

49. Employee Competency Development
 Instituted HRDI as the Learning and Resource center.
 Training Need Identification through the Performance Appraisal system itself.
 Institution of CENPEID – in association with USAID to cater to the training
needs of its own and other SEB’s employees.
 Training Policy formulated – 6 days for executives and 2 days fro non
executives.
 Peer to Peer exchange programs in association with USTDA for sharing of best
practices and knowledge.
 Initiation of CFT approach – for handling critical concerns cutting across
departments.

50. Internal Communication
 Joint Interaction Forums constituted for effective
two way communication.
 LGIE in association with ACCORD –
participation across all levels of employees.
 Introduced Town Hall Meetings – unstructured
reviews aimed at two way communication.
 SURKHIYAN – monthly news bulletin for
employees.
 SARTHI – forum for resolution of Grievances
instituted.
Policies on Ethics, Harassment & standardization of rules through Leave &
Travel Policy.

51. Applying the A-D-L-I approach to
Organizational Excellence E
D
D
C
B
A
Self Sustenance
Maturity &
Performance
Assurance
Consolidation
Electricity Theft
Performance
Last Mile
Elimination of
Management
Change
Tackling the initial challenge of Diverse
Consolidation of Past achievement and Backward Integration Empowerment
Workforce & AT&C Losses
ensure Consumer Orientation Systems Approach

52. Other Value Added
Initiative SAP IS – Utility for XXXX

53. Asset Leveraging – BI Visualization & Process
Documentation
Used for authoring,
configuring, and
viewing MDSD
method content and
processes.
Develop method
content and create or
extend processes
Select applicable RUP
components
Includes Rational
Tool Mentors
Includes extensive
context sensitive help
Published a process
website for access by
team members.

54. Asset Leveraging – SAP DW Information Modeling
Use IEC Common
Information Model to
define standard utility
data items
Use IEC Model Extension
Methodology to define
SCE and SmartConnect™
unique data items
Use Business Archetype
Patterns and Analysis
Patterns to define
standard business data
items
Use ANSI Standards to
define meter data types

55. Consumer Driven Initiatives
 Load Enhancement Drives
 Meter Replacement Drive (removing the myths related to the electronic
meters)
 Internal Wiring Checking Campaign
 Energy Conservation Campaigns
Providing Helping Hand to Consumers. . .

56. Thanks …
Let’s have interaction…..