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www.energycentral.com ENERGYBIZ MAGAZINE 39
38 ENERGYBIZ MAGAZINE July/August 2005
Managing<br />
Complexity<br />
EVERYONE KNOWS WHAT ASSET MANAGEMENT IS —<br />
THEY’RE JUST NOT SURE WHAT TO CALL IT.<br />
By Warren Causey<br />
Asset <strong>management</strong> seems to have as many names as there<br />
are vendors promoting it and utilities buying it. That’s because there<br />
is no one over-arching definition of the discipline. Is it enterprise<br />
resource planning (ERP)? Is it enterprise <strong>asset</strong> <strong>management</strong> (EAM)? Is<br />
it a system that produces process improvement from generation to<br />
the field? Is it inventory, financials, warehousing, wires and pipes, or<br />
people? What exactly constitutes an <strong>asset</strong>? Increasingly, utilities are<br />
determining that virtually everything they possess is an <strong>asset</strong> — from<br />
the information stored in automated systems, recorded on paper, or<br />
even communicated by word of mouth.<br />
The definition of <strong>asset</strong> <strong>management</strong> has shifted considerably since the<br />
early days when SAP, based in Germany, introduced the idea of “enterprise<br />
software” to U.S. companies back in the early- to mid-1990s. Considered<br />
prime targets, utilities were just coming out of a long slumber as regulated,<br />
protected, quasi-governmental organizations with great resources.<br />
Facing the very real risk of competition, utilities quickly realized that the<br />
“silo structure” of their information technology solutions wouldn’t work<br />
in the proposed new environment; nor would existing haphazard systems<br />
of locating, moving, and accounting for all kinds of <strong>asset</strong>s.<br />
Thus, SAP and other vendors began expanding their footprints to<br />
compete with SAP. They expected to take the industry by storm and<br />
eventually drive out niche players with all-encompassing, tightly integrated<br />
software packages. However, some strange things happened<br />
along the way to this planned vendor nirvana: collapse of deregulation<br />
in California; the demise of Enron and other corporate malfeasance;<br />
and the implosion of the wholesale energy market. One interesting<br />
phenomenon that resulted, besides the splintering of the enterprise<br />
<strong>asset</strong> <strong>management</strong> computing market, is most “energy companies”<br />
40 ENERGYBIZ MAGAZINE July/August 2005<br />
now want to be called “utilities” again. They also want to define,<br />
configure, and determine <strong>management</strong> of <strong>asset</strong>s on their own terms<br />
— not as some large vendors decided they should be defined.<br />
As a result, not only have SAP, Oracle, J.D. Edwards, PeopleSoft, and<br />
several others opted against creating monolithic “enterprise computing”<br />
empires at utilities, but also utility IT seems to be as splintered as ever<br />
— at least in the United States. The lineup of vendors also has changed<br />
considerably. First PeopleSoft acquired J.D. Edwards. Then Oracle acquired<br />
PeopleSoft. Traditional CIS/CRM vendor SPL WorldGroup acquired a smaller<br />
ERP/EAM vendor, Synergen, plus an OMS vendor, CES International, and<br />
now is playing in the “enterprise” <strong>asset</strong> <strong>management</strong> space.<br />
Several other ERP/EAM vendors have continued to broaden and<br />
expand their offerings to encompass more <strong>asset</strong>s. Indus International<br />
of Atlanta, for example, acquired a CIS from SCT and now calls its<br />
overall package “Service Delivery Management.”<br />
Utilities did catch on to the idea of having their systems communicate<br />
across the enterprise, but they have done so much “picking<br />
and choosing” that many enterprise or <strong>asset</strong> <strong>management</strong> vendors<br />
find themselves having to link to their competitors’ products at the<br />
same utility. One example of that trend is evident at Nashville Electric<br />
Service, which acquired Mincom software, an enterprise software<br />
vendor, and integrated it with PeopleSoft/Oracle. National Grid of New<br />
England is another case in point. Its U.S. operations run primarily on<br />
PeopleSoft, but its United Kingdom parent has a former (before the<br />
PeopleSoft merger) Oracle EAM solution. Lattice, a newly acquired gas<br />
subsidiary, employs SAP.<br />
The idea of enterprise <strong>asset</strong> or resource software has split into<br />
competing ERP and EAM paradigms. Both have enthusiastic advo-
cates and overlapping software. Utilities continue to mix and match<br />
their <strong>asset</strong> <strong>management</strong> solutions, but view them as a necessary part<br />
of a whole. “Work <strong>management</strong>, <strong>asset</strong> <strong>management</strong> and financial are<br />
integrated into one system,” says Connie Woo, vice president and CIO<br />
at Toronto Hydro. “The rest (CIS, SCADA, GIS) are stand-alone systems.<br />
We definitely would like to see all of these systems integrated to<br />
support seamless processes.”<br />
“Seamless processes across all <strong>asset</strong> groups and functions” is<br />
the mantra of most utilities today, especially the large investorowned<br />
entities that dominate 75 percent of the market. That includes<br />
systems that deal with <strong>asset</strong>s all the way to the residence or business.<br />
“I mentioned field service automation and SCADA, which are two areas<br />
I would like to see improved,” Woo says. “We also have a distribution<br />
<strong>management</strong> system, but we would like to expand it.”<br />
Even industry analysts categorize the <strong>asset</strong> <strong>management</strong> marketplace<br />
in different ways. Some will rank work <strong>management</strong> vendors in one<br />
study, EAM vendors in another, supply chain <strong>management</strong> (SCM) in yet a<br />
third category, and ERP vendors in a fourth or fifth category — sometimes<br />
even adorning the term ERP with Roman numerals for good measure.<br />
Vendors will stake claims to being the No. 1 solutions provider in<br />
one category or another. Sub-segments in the marketplace often are<br />
applied, for example, defining industry categories in different functional<br />
ways (energy companies including oil and gas as well as electric, or separate<br />
categories for electric generation vs. transmission vs. distribution),<br />
or by using three “tiers” to distinguish large-, mid-, and small-sized<br />
companies before analyzing the different vendors’ market shares.<br />
But for utilities, the main interest is in developing integrated software<br />
systems that enable them to improve the processes involved in<br />
dealing with their <strong>asset</strong>s and doing so system-wide. “A major area that<br />
I’m really looking at where there needs to be a breakthrough is in business<br />
process orchestration,” says Gene Zimon, senior vice president,<br />
Information Technology, NSTAR, based in Westwood, Mass. “If you buy<br />
the logic that you’re implementing processes by assembling legacy and<br />
new software components, you end up with a set of systems that has<br />
to be integrated in order to deploy an effective business process.”<br />
Thus one important “<strong>asset</strong>” being sought from technology is<br />
improved “process,” making the definition even more complex.<br />
The complexity of the undertaking was expressed by Mahvash<br />
Yazdi, senior vice president, business integration and CIO, Edison International<br />
and Southern California Edison,<br />
in Rosemead, Calif. “Our engineering<br />
organization is looking into application<br />
of technology wherever it makes sense<br />
in terms of both transmission and distri-<br />
bution <strong>asset</strong>s,” he says. “We also have a<br />
group that we call our technology watch<br />
group, and we are looking at informationrelated<br />
technology, such as automation of<br />
field tools. We are providing our linemen<br />
and trouble men with computers in their<br />
trucks and with tools that will enable<br />
them to manage their work in a real-time<br />
fashion, and have the right material<br />
[<strong>asset</strong>s] at the right location. We’re looking<br />
at power line carriers in a private<br />
fashion, potentially for a narrow-band<br />
automated meter reading. So, we have<br />
technology groups that are doing technology<br />
evaluation as well.” That means<br />
meters and the systems and individuals<br />
who read them are <strong>asset</strong>s, as well.<br />
Toronto Hydro’s Woo also views <strong>asset</strong> <strong>management</strong> as part of<br />
Vendors will<br />
stake claims<br />
to being the<br />
No. 1 solution<br />
provider in one<br />
category or<br />
another.<br />
“service-oriented architecture.” Woo says: “We are planning an<br />
upgrade of our EAM system, which is the system from Mincom that<br />
encompasses all our work <strong>management</strong>, human resources, <strong>asset</strong><br />
<strong>management</strong>, our financials, our supply chain, and all of our back office.<br />
So we’re planning to upgrade to the next version of that system. Hopefully,<br />
that will move us to a new architecture — the service-oriented<br />
architecture. Hopefully that will position us better for the Web and<br />
future automation.”<br />
Despite the attempt by vendors and analysts to quantify and<br />
“pigeonhole” <strong>asset</strong> <strong>management</strong>, it continues to be elusive in terms<br />
of definition at utilities. But due to their <strong>asset</strong>-intensive nature, utilities<br />
know they need to be involved in it. They understand that <strong>asset</strong>s<br />
include everything from the pole or transformer in the field to the<br />
business intelligence provided to the boardroom by integrated enterprise<br />
systems that enable executives to see the status of those poles,<br />
transformers, generating plants, and field service crews.<br />
www.energybizmag.com ENERGYBIZ MAGAZINE 41
Blending<br />
Solutions<br />
A GEORGIA CO-OP GOES “BEST-OF-BREED.”<br />
By Warren Causey<br />
Cobb Electric Membership Corp.(EMC), in Marietta, Ga.,<br />
is atypical of cooperative utilities in the United States. With its service<br />
territory located in one of the fastest-growing areas of suburban<br />
Atlanta, it’s larger than most co-ops with approximately 180,000 electric<br />
customers and more than 100,000 natural gas customers — all captured<br />
after the Georgia natural gas market was deregulated in July 1988.<br />
Cobb EMC also has morphed over the last 10 years from a traditional<br />
electric co-op to a multi-product company that sells everything<br />
from electricity and natural gas to local and long-distance telephone<br />
service, Internet service, home security, and more.<br />
To deal with its exploding list of services, Cobb EMC formed Cobb<br />
Energy Management Corp. (Cobb Energy) in 1997, a for-profit entity<br />
formed to be an aggregator of services for the membership of Cobb<br />
EMC and others.<br />
By 2003, it became obvious that Cobb EMC’s Orcom Customer<br />
Information System, which handled everything from financials and<br />
billing to tracking <strong>asset</strong>s in the field, needed updating.<br />
“That software really served us well through the years, but the<br />
way our company looked in 1995 [when the Orcom CIS was installed]<br />
and today is totally different,” says Steve Paolucci, associate vice<br />
president of finance at Cobb Energy. “The old monolithic software just<br />
couldn’t handle it anymore.”<br />
As a result of that impasse, Cobb Energy began exploring enterprisewide<br />
<strong>asset</strong> <strong>management</strong> software in 2003. In 2004, it began installing a<br />
new set of solutions. Most software and hardware for the entire enterprise,<br />
including the original co-op, now reside with Cobb Energy.<br />
“When we went into this project, we had hoped we could find one piece<br />
of software that could do everything we needed done,” Paolucci says.<br />
The fact that it didn’t work out that way is typical of many utilities<br />
in the United States — they haven’t been fertile ground for the large<br />
enterprise computing firms like Waldorf, Germany’s SAP.<br />
“We started with five or seven different options and narrowed it<br />
down to three: Lawson Software, St. Paul, Minn., PeopleSoft [now an<br />
Orcom subsidiary], and SAP,” Paolucci says. “We did intense sessions<br />
with those companies, gave them our requirements, and asked<br />
whether they could meet our needs out of the box, with minor modifications<br />
or major modifications.”<br />
42 ENERGYBIZ MAGAZINE July/August 2005<br />
That process, which was assisted by Capstone Consulting Partners,<br />
now a subsidiary of Alliance Data Systems, of Dallas, extended through<br />
last summer. However, none of the companies could satisfy Cobb Energy’s<br />
needs completely, Paolucci says. At that point, the utility decided<br />
to go with a “best of breed” solution. The result is the kind of mix-andmatch<br />
software selection that has driven executives of “enterprise”<br />
software firms up the wall and resulted in considerable consolidation.<br />
Cobb Energy will implement the following line-up of <strong>asset</strong> <strong>management</strong><br />
software:<br />
Lawson Software will handle financials and human resources/<br />
payroll.<br />
A new Cordaptix CIS from SPL WorldGroup, San Francisco, will<br />
be installed for customer care and billing.<br />
A component of Worksuite, of Houston, will provide the frontend<br />
for Cobb Energy’s existing field automation system.<br />
Intelliplant, a product of Information Intellect, of Marietta,<br />
Ga., will handle fixed <strong>asset</strong> <strong>management</strong> accounting for<br />
power and distribution <strong>asset</strong>s.<br />
“An EMC, like any distribution company, is pretty <strong>asset</strong> intensive, with<br />
most of the <strong>asset</strong>s being in transmission and distribution,” says Paolucci,<br />
explaining why there is a separate accounting system for fixed <strong>asset</strong>s.<br />
“Most generic accounting systems have one <strong>asset</strong> number for something<br />
such as a pole. Thus, they have to treat all those <strong>asset</strong>s individually. To<br />
avoid that, there are some specialty software systems that handle these<br />
things as groups. Information Intellect<br />
has one of those.”<br />
Cobb Energy now is installing<br />
and integrating all of the software.<br />
“We’ve been through three conversions<br />
so far,” Paolucci says. “We<br />
decided to try to learn from our<br />
previous mistakes — one of those<br />
was to run the projects ourselves.<br />
That’s why we hired Capstone. We<br />
wanted a company that had some<br />
expertise in managing a project for<br />
us so we could stay sort of on the<br />
outside and be more concerned<br />
with learning the software and<br />
training.”<br />
Despite the assistance, the<br />
installation is progressing in<br />
stages and won’t be fully<br />
completed until sometime in 2007,<br />
Paolucci says. When it is, Cobb<br />
Energy/EMC will join a long list<br />
of utilities that entrusts <strong>asset</strong><br />
<strong>management</strong> to a collection of<br />
best-of-breed software from<br />
several companies.<br />
definitions<br />
The following are offered<br />
as a guide.<br />
ERP – Enterprise Resource<br />
Planning<br />
ERP systems developed originally<br />
in heavy industry and tended<br />
to emphasize financials and<br />
resource planning, though they<br />
gradually grew to include work<br />
<strong>management</strong>, human resources,<br />
and other “softer” disciplines,<br />
including even customer information<br />
systems (CIS).<br />
EAM – Enterprise Asset<br />
Management<br />
EAM systems developed in more<br />
process-oriented industries with<br />
more emphasis on human resources<br />
and work <strong>management</strong>, but<br />
gradually grew to include financials<br />
and supply chain <strong>management</strong>/resource<br />
planning and CIS.<br />
SCM – Supply Chain<br />
Management<br />
SCM grew up in plants and<br />
factories and still concentrates<br />
primarily on the movement of<br />
parts, fuel, and other supplies<br />
within the heavy-industry supply<br />
chain. However, some SCM systems<br />
have grown to include other<br />
elements of ERP and EAM.
www.energybizmag.com ENERGYBIZ MAGAZINE 43
Improving Asset<br />
Efficiency for<br />
Productivity<br />
Gains<br />
By Brunson White<br />
Asset <strong>management</strong> capability within integrated enterprise<br />
solutions are rapidly transforming the ways in which both gas<br />
and water utilities monitor and repair their vast arrays of <strong>asset</strong>s.<br />
Energen Corp. recently revolutionized its business processes and<br />
created valuable new efficiencies by successfully implementing an<br />
enterprise resource planning (ERP) system that features integrated<br />
<strong>asset</strong> <strong>management</strong> functionality.<br />
Providing natural gas to more than 460,000 customers statewide,<br />
Alagasco and Energen have experience with periods of sustained<br />
change and a long history of preparing for the future. The company<br />
got its start in 1852 as Montgomery Gas Light. The company has<br />
two major subsidiaries: Alagasco, its natural gas utility, and Energen<br />
Resources, its oil and gas exploration and production company. Through<br />
its two subsidiaries, Energen acquires and develops domestic oil and<br />
gas properties and distributes natural gas throughout Alabama.<br />
Energen’s presence in the upstream as well as the downstream<br />
side of the business enhances the company’s understanding and<br />
appreciation of the entire energy value chain. Operating within two<br />
distinct aspects of the energy industry further serves to emphasize<br />
the importance of an IT solution that can create communications with<br />
a strong information flow between different departments.<br />
In 2002, Energen reevaluated its outdated legacy systems and<br />
numerous manual processes that had become large cost centers,<br />
concentrating primarily on the operations of Alagasco. With approximately<br />
1,200 employees and significant operations in seven states,<br />
Alagasco was outgrowing the cumbersome manual processes it used for<br />
project approval and documentation. Rather than continue underutilizing<br />
the company’s physical <strong>asset</strong>s by manually inputting project information<br />
into legacy systems, delivering documentation through inter-office mail,<br />
and manually reporting for regulatory compliance, <strong>management</strong> decided<br />
to employ an enterprise technology to manage all <strong>asset</strong>s by aiming to<br />
maximize the return on investment within each <strong>asset</strong>.<br />
The company first declared the need to make <strong>asset</strong>-related work<br />
(maintenance, productivity, automation) safer and more efficient. From<br />
an <strong>asset</strong> <strong>management</strong> standpoint, there were several other problems<br />
to address as well. Operating expenses were consistently rising due to<br />
44 ENERGYBIZ MAGAZINE July/August 2005<br />
a lack of transparency between different systems and an inadequate<br />
IT infrastructure for alerting managers to equipment requiring repairs<br />
and replacement. Inaccurate data records detailing plant and fleet <strong>asset</strong><br />
usage and repairs further stymied the company’s ability to operate<br />
at full production. Having looked at numerous solutions from several<br />
vendors to replace the homegrown systems, the IT staff’s first priority<br />
was a solution with a high level of integration. Not only would an easily<br />
integrated solution allow the company to streamline processes for work<br />
orders and maintenance, but it would also deeply embed within numerous<br />
departments across the enterprise — from accounting to maintenance,<br />
creating large productivity gains for a greater number of employees. As<br />
a company with a strong corporate culture spread throughout the state<br />
of Alabama, reaching a high level of employee buy-in to the implementation<br />
was another important goal.<br />
Energen officials chose the mySAP ERP system with <strong>asset</strong> <strong>management</strong><br />
functionality. Aiming for a launch date of Jan. 1, 2003, the project<br />
team began the implementation phase in March 2002. The greatest<br />
impact of the implementation was within Alagasco’s distribution<br />
system. Consisting of more than 30,000 miles of pipe that deliver<br />
natural gas directly to thousands of customer locations, the distribution<br />
system remains the company’s most important <strong>asset</strong>. Any defect<br />
in the piping can lead to an immediate revenue and product loss.<br />
Through the ERP system, capital project approvals and materials<br />
<strong>management</strong> helped expedite the process of expanding and improving the<br />
distribution system. With workflow <strong>management</strong>, project approval time<br />
decreased from a full work week to within a day. Moreover, materials that<br />
were in shortage are quickly re-routed to projects with the most significant<br />
need. For example, if additional materials and workers are required<br />
for constructing a new border station, both maintenance teams and<br />
materials are quickly dispatched from lower priority projects to provide<br />
maintenance, avoiding job stoppages due to a shortage of materials.<br />
Additional productivity gains are derived from improving the processes<br />
for acquiring and maintaining company <strong>asset</strong>s. All new <strong>asset</strong> acquisitions<br />
— from facilities to technology to office furnishings — are made within<br />
the system, approved by an internal check of real-time budget figures.<br />
After purchase, depreciation schedules are automatically added into the<br />
system for use by accounting and other departments, eliminating costly<br />
paperwork. For maintenance projects, entering work orders modularly<br />
into the system allows for information to be shared enterprise-wide,<br />
enabling different departments to move forward without having to wait<br />
for a paper trail to reach their desks. For example, while repair crews<br />
evaluate a work order for a fleet vehicle, the purchasing department can<br />
review the costs of replacing the vehicle. When the maintenance team’s<br />
final report is entered into the system, <strong>management</strong> has the up-to-theminute<br />
information to make an informed decision about replacement.<br />
As with any enterprise software installation, the Alagasco implementation<br />
experienced considerable challenges — the greatest of which<br />
rested in allowing the workforce to adapt to process changes. Through<br />
ongoing demonstrations of the advantages of the new enterprise<br />
system, Energen <strong>management</strong> was able to emphasize the time-saving<br />
benefits of the new system to end-users. Another obstacle arose from<br />
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ebiz_banner1.indd 1 6/28/05 4:22:29 PM
www.energybizmag.com ENERGYBIZ MAGAZINE 45
the granularity of the data provided by the<br />
system, at first resulting in a hypothetical “data<br />
overload.” However, through ongoing exposure,<br />
end-users and customer-facing employees<br />
were able to quickly turn this hindrance into<br />
a strength. When making purchase decisions<br />
about field equipment, Energen <strong>management</strong><br />
can now deftly search through the performance<br />
history of specific equipment, allowing<br />
for quicker, more-informed decision-making.<br />
As other utilities look to improve <strong>asset</strong><br />
<strong>management</strong>, they should seek out an implementation<br />
option that can instantly integrate<br />
with established business processes and link<br />
throughout the entire value chain. Industry<br />
best practices often preach about the value<br />
of an integrated approach, but this is an area<br />
that cannot be stressed enough. An integrated<br />
solution provides for a quicker and<br />
easier installation. Moreover, by integrating<br />
all business processes, Alagasco achieved a<br />
sophisticated level of service and responsiveness.<br />
Flaws within the distribution system were<br />
easily tracked, setting a maintenance schedule<br />
ranking repairs by areas of need and resulting in<br />
the lessening of revenue and product loss.<br />
No matter how skilled the IT department,<br />
a successful and seamless enterprise implementation<br />
cannot be handled alone. Thirdparty<br />
or vendor personnel must be available<br />
to help employees learn new systems and to<br />
ensure that phased implementations stick<br />
to original timetables and meet pre-designated<br />
goals. All utilities must be able to trust<br />
a vendor. At Energen, the team consistently<br />
worked well with our software partners and<br />
consultants, who were able to quickly train<br />
employees to utilize the new software, while<br />
providing a rational, goal-driven template for<br />
future implementations and upgrades.<br />
Energen realized quick, significant returns<br />
from its ERP solution. Overall costs fell with<br />
particular improvements seen by reducing<br />
mechanical failures and providing responsive<br />
corrective maintenance. Critical plant, fleet,<br />
and distribution equipment saw maintenance<br />
costs drop as well. Moreover, operational efficiencies<br />
increased greatly with the advent<br />
of real-time information and near real-time<br />
budgeting, allowing for the widespread transmission<br />
of mission-critical information to<br />
46 ENERGYBIZ MAGAZINE July/August 2005<br />
departments throughout the enterprise. With<br />
the ERP solution to help manage Alagasco’s<br />
workload, response time has improved drastically,<br />
which in turn improves customer service<br />
and loyalty measures.<br />
With the widespread success of the ERP<br />
system featuring <strong>asset</strong> <strong>management</strong> capabilities,<br />
Energen continues to bolster its production<br />
and cut down on costs by targeting the supply<br />
chain. A project team is currently working to<br />
install a document <strong>management</strong> system (DMS)<br />
to facilitate the accounts payable portion of<br />
the supply chain, linking the finance department<br />
with production efforts. Company-wide,<br />
a new focus has been embraced, calling for<br />
ongoing examination of business processes<br />
with the intent of delivering greater returns to<br />
customers and shareholders.<br />
Enterprise <strong>asset</strong> <strong>management</strong> is evolving<br />
outside of the legacy systems of the past two<br />
decades, becoming a significant part of the<br />
fully integrated utility. The major barrier to this<br />
transformation is the unwillingness of corporations<br />
to address the change <strong>management</strong><br />
issues concerned with leaving the interfaced,<br />
o n t o p i c<br />
Utility Outsourcing articles<br />
from EnergyPulse<br />
To view any of these articles, please go to<br />
www.energycentral.com/quicklink and type the<br />
quick link code into the quick link box.<br />
End the Asset Management Tug-of-War<br />
Richard MacDonald, SPL WorldGroup, Inc.<br />
Quick link code: P1025<br />
Optimizing EAM<br />
John Yolton, Solutions Associates<br />
Quick link code: P539<br />
It’s Always Been About Asset Management<br />
Frank Craig, MCR Performance Solutions<br />
Quick link code: P531<br />
Working Capital Reduction<br />
Donald Ryan, dynaTHinK LLC<br />
Quick link code: P402<br />
Asset Management, in Theory and Practice<br />
Bruce Humphrey, KEMA<br />
Quick link code: P386<br />
Capital Asset Life Extension<br />
Anthony Impelluso, AIM Engineering, LLC<br />
Quick link code: P320<br />
less-optimized world. The ROI to complete this<br />
transformation is available; organizations must<br />
be willing to venture outside of their comfort<br />
zones to realize the full potential of the integrated<br />
enterprise. While it’s difficult to predict<br />
when this trend will become the norm, integrated<br />
<strong>asset</strong> <strong>management</strong> will soon become<br />
the low-hanging fruit of the future as utilities<br />
look to complete supply chain optimizations.<br />
While some <strong>asset</strong>-intensive industries are<br />
unique enough to require highly specialized<br />
functionality within the <strong>asset</strong> <strong>management</strong><br />
space, I would argue these are the exception<br />
rather than the rule. In the end, the ultimate<br />
answer for utilities lies in extending ERP<br />
systems with new open-standard architecture<br />
platforms that preserve the deep integration<br />
of all business processes.<br />
Brunson White is the CIO of Energen Corp.,<br />
headquartered in Birmingham, Ala. He also<br />
currently serves as the chair of the American<br />
Gas Association/Edison Electric Institute<br />
Technology Advisory Council.<br />
A New Look At Spending Optimization<br />
Scott Sidney, UMS Group<br />
Quick link code: P204<br />
Seven Principles of T&D Asset Management<br />
Bill Cozzens, Soluziona USA<br />
Quick link code: P193<br />
Asset and Supply Chain Management<br />
Junaid Yasin, ProcureZone<br />
Quick link code: P185<br />
Value of Early Warning of Failure<br />
Tim Holtan, SmartSignal Corp.<br />
Quick link code: P159<br />
Asset Optimization<br />
Dunham Cobb, CGEY<br />
Quick link code: P137<br />
Utilities Need More Asset Management<br />
John Geoghegan, IBM<br />
Quick link code: P113<br />
Mixed Signals Cloud Reliability Picture<br />
Bruce Humphrey, KEMA<br />
Quick link code: P387<br />
Enterprise Exposure Management<br />
Kevin R. Rose, ENSIGHT Advisors<br />
Quick link code: P24
www.energybizmag.com ENERGYBIZ MAGAZINE 47
[ C A S E S T U D Y ]<br />
Mobile Computing Tools For Mobile Workers Improve<br />
Is the utility industry undergoing a sea change? Most analysts agree<br />
that it is not. They say, in fact, that it has already happened. The past<br />
model for increasing utility company profits — raising rates — is obsolete.<br />
New economic realities compel savvy executives to focus on bottom<br />
line improvements to increase market share, improve employee<br />
efficiency, maximize customer-retention levels and cut costs.<br />
And, they say, the 21st century’s emphasis on enterprise and productivity<br />
offers utility companies opportunities unseen since the early days<br />
of state and federal regulation three- quarters of a century ago. These<br />
opportunities more than justify the challenges inherent in seizing them.<br />
As one recently retired marketing vice president put it, “When<br />
I started in the business our major sales efforts were directed at<br />
legislators. When I left, it was all about customers. Which is how it<br />
should be. The legislators made sure we never lost money, but they<br />
also limited what we could do to earn income and how much of that<br />
revenue we could retain. Utilities are a no-limits industry now. A guy<br />
starting out in my business today may wind up building something<br />
more profitable than Microsoft by the time he steps down.”<br />
Exploiting new worlds — unlimited worlds — requires new tools. Better<br />
tools. Faster tools. More fail-safe tools. Tools that will work anywhere,<br />
anytime, under any conditions. Tools with an almost infinite capacity to<br />
be scaled up to do more work and scaled out to perform new tasks.<br />
Next-generation, utility task-optimized rugged portable computers,<br />
such as the Panasonic Toughbook® CF-18 and CF-29,<br />
are prime examples of tools that generate a direct impact on a utility<br />
company’s bottom line. This positive impact is measurable and<br />
occurs on both the revenue and cost sides of the balance sheet.<br />
A typical case study proves that the deployment of cuttingedge<br />
mobile-computing technology not only improves the bottom<br />
line, it improves it dramatically. And, in some cases, such as that<br />
of the United Kingdom’s largest power supplier, British Gas, the<br />
word “dramatically” could fairly be called an understatement.<br />
Prior to digitalization, British Gas had hundreds of field offices<br />
and 17,000 tech and back-office workers, most of them spending<br />
their workday shuffling papers. Today that 17,000-person workforce<br />
numbers less than 4,000, and most of the field offices have been<br />
shuttered.<br />
Wireless-capable Panasonic CF-18 ruggedized “convertible”<br />
notebook/tablets help a field force handle over 6 million service<br />
calls a year. Errors in ordering replacement parts have been<br />
reduced from one-in-four to “practically nonexistent” and delivery<br />
of those parts takes 12 hours, not several days.<br />
According to British Gas, the productivity of their technicians<br />
using the CF-18 has more than doubled, going from an average<br />
of four calls per day to ten and resulting in a “huge reduction in<br />
infrastructure and labor costs.”<br />
48 ENERGYBIZ MAGAZINE July/August 2005<br />
The British Gas experience proves that ruggedized computers<br />
with multi-protocol wireless connectivity are an essential component<br />
in reducing utility company operating expenses on both a global and<br />
per-call level.<br />
But can that impact really be shown on the other side of the<br />
ledger? Can a piece of hardware such as a Toughbook actually<br />
increase revenue as well as reduce costs?<br />
Research shows that it can, but only if that new piece of hardware<br />
fits perfectly within the IT scheme of the company deploying<br />
it. It must be more than the correct tool for the job; it must be the<br />
right tool for the entire enterprise.<br />
After intensive study and stringent testing, British Gas decided<br />
on the CF-18 because it exceeded both the performance and<br />
durability specifications for generic field-force computers and the<br />
task-specific requirements of a huge, diversified power utility.<br />
In addition to being the United Kingdom’s largest industrial and<br />
consumer supplier of gas and electricity, British Gas engages in<br />
such varied enterprises as appliance sales and repair, financial<br />
services, and security system design and implementation.<br />
The company employs field technicians for such disparate<br />
tasks as meter reading, line and pipeline maintenance, central air<br />
and heating system installation, commercial and residential steamboiler<br />
repair, and kitchen appliance service.<br />
To equip such a diverse workforce without hobbling the<br />
IT department with a hard-to maintain assortment of differing<br />
computer models and platforms, British Gas needed a high-performance,<br />
standardized unit with exemplary multitasking and communications<br />
ability.<br />
A fully ruggedized 4.5-pound computer with extended battery<br />
life, a 40GB shock-mounted hard drive and a daylight-readable,<br />
pressure sensitive touchscreen, the CF-18 instantly converts from<br />
a high-performance Windows XP notebook to a Windows XP tablet<br />
computer via a unique swiveling and folding screen.<br />
The Toughbook’s ability to replace both outdated notebooks<br />
and traditional, proprietary-software-driven pen tablets was<br />
critically important to British Gas, as was the CF-18’s full Intel®<br />
Centrino compliance and simultaneous wireless WAN, wireless<br />
LAN, Bluetooth and GPS capability.<br />
The time, effort and expense British Gas invested in its quest to<br />
maximize the return on its field-force computerization investment<br />
has paid off handsomely. Not only have the ruggedized portables<br />
dramatically reduced the sales, general and administrative share<br />
of every dollar British Gas spends on field force labor and materials,<br />
they have produced measurable revenue gains in areas susceptible<br />
to competitive pressures.<br />
According to British Gas Home Services IT business manager,<br />
Peter Ransom, the Panasonic “convertibles” are providing “absolutely<br />
fantastic” service. “Mobile computing has helped us reduce<br />
response times to call-outs, increase the speed of job turnaround,<br />
and ... present a fresh, clean and very professional image to the<br />
customer,” Ransom said.<br />
A D V E R T I S E M E N T
A D V EE RR TT II SS E M E N T<br />
[ C A S E S T U D Y ]<br />
To put it simply, the Toughbook implementation has helped<br />
British Gas achieve unusually high customer-satisfaction levels<br />
— the Holy Grail of all enterprises trying to increase market share,<br />
profits and ROI via new business acquisition and retention.<br />
Another utility company that has used cutting-edge mobile computing<br />
and communications technology to lead its industry in customer<br />
satisfaction is Arizona’s Salt River Project, recipient of the 2004 J.D.<br />
Power and Associates Distinction for Electric Utilities Award.<br />
SRP, which uses fully ruggedized Panasonic notebooks such<br />
as the Toughbook CF-29—a MIL-STD-810F-tested, Centrino-compliant<br />
portable—reports that increased use of rugged portable<br />
computers in the field has resulted in substantial savings in both<br />
dollars and personnel hours.<br />
And, SRP says, those are only some of the benefits attributable<br />
to the Toughbook deployment. Others include increased work crew<br />
efficiency, better communications and scheduling, safety improvements<br />
related to having the most current electric maps available<br />
for each job, safety improvements related to a decrease in miles<br />
driven to obtain maps and support at field offices, decreased radio<br />
and cell-phone traffic, an increase in customer service quality and<br />
a decrease in the amount of time customers are out of service.<br />
Since SRP’s corporate culture orbits around customer service,<br />
the last two items on that very impressive laundry list are arguably<br />
the most important. The company’s 2004 rating of 112 on J.D.<br />
Power’s utility customer satisfaction list outranked that of every<br />
other electricity supplier in the U.S., and company officials plan to<br />
do at least that well this year.<br />
SRP managers attribute a good part of their long-term customer<br />
honeymoon to the company’s policy of constantly upgrading and<br />
updating their mobile computing capability, adding applications<br />
and enhancements as they become available rather than waiting<br />
for the end of their hardware’s life cycle to renew the system.<br />
While companies throughout the utility spectrum are faced with<br />
the challenge of increasing profits without raising rates, there is no<br />
place where the shift to a new earnings model is more dramatic<br />
than in the cable television and telephone industries.<br />
Faced, for the first time, with competition from other cable<br />
companies as well as satellite providers, cable operators in many<br />
parts of the country are fighting increasingly bitter market-share<br />
wars. Rates are going down, the number of basic, nonpremiumtier<br />
channels is going up, and customer acquisition and retention<br />
enhancements like HDTV receivers or personal video recorders<br />
are being offered at cost or below. Despite all these factors, surveys<br />
still identify dissatisfaction with customer service as the most<br />
common cause of television provider churning.<br />
If market conditions in the broadcast-delivery business are<br />
chaotic, those in the telephone industry are in a state of complete<br />
bedlam. According to some surveys, the number of households<br />
that switched local telephone providers increased by more than<br />
60 percent in 2003-2004, with more than 10 percent of all U.S.<br />
telephone users either changing their primary carrier or abandoning<br />
traditional copper-wire service completely.<br />
Virtually every consumer willing to spend 30 minutes in online<br />
research can find a cellular provider offering them an almost unlimited<br />
number of online minutes, free voicemail, free long distance and<br />
free nationwide roaming for less than $50 a month. And they are<br />
willing to deliver all this service, as well as a “free” phone, directly to<br />
the customer’s mailbox, thus changing the service equation from a<br />
standoff — sitting at home waiting for an installer vs. standing in line<br />
at a cell phone store — to a win for the cellular provider.<br />
Given the advantages of reasonable monthly costs, free longdistance,<br />
no in-home service calls and portability, it’s no surprise<br />
that increasing numbers of Americans are firing their landline<br />
phone companies.<br />
“Utility professional<br />
continually trust the<br />
Toughbook CF-29 and<br />
convertible<br />
Toughbook CF-18 for<br />
rugged reliability and<br />
industry-leading uptime<br />
at a significantly lower<br />
total cost of ownership.”<br />
Responding to this pressure, many traditional phone providers<br />
have relinquished some of their most historically cherished profit centers<br />
to maintain market share. Package plans bundling unlimited local<br />
and long distance calling and a range of premium services — everything<br />
from call waiting and voice mail to distinctive ring tones and, in<br />
some cases, DSL — for a fixed, cut-rate price are proliferating.<br />
Making money while offering customers more bells and whistles<br />
for fewer dollars demands rigorous attention to cost control<br />
and employee productivity. Getting customers to subscribe — and<br />
stay subscribed — to those packages, regardless of their value,<br />
requires an almost obsessive focus on customer service. “While<br />
price will always be an important factor, satisfying customers has<br />
become more about the quality of the relationship and the provider,”<br />
says telephone industry analyst Steve Kirkeby.<br />
www.energybizmag.com ENERGYBIZ MAGAZINE 49
Explaining why his company recently pulled almost 3,000<br />
supervisors out of their offices and sent them into the field<br />
with ruggedized notebook computers, a key executive with one<br />
of America’s biggest telecommunications companies echoed<br />
Kirkeby. “The program is designed to enable us to do better work,<br />
more tightly scheduled work, and safer work,” he said. “It all comes<br />
down to increasing the quality of our customer service.”<br />
Improving customer relations by redefining its concept of service<br />
and spending millions of dollars on better tools was a formidable<br />
challenge for this company, but given the importance of every<br />
single market-share point won or lost, one it had to undertake.<br />
Since abandoning the concept of behind-a-desk supervisors<br />
in favor of “floating field offices” required portable computers<br />
capable of wearing many hats, selecting the perfect hardware<br />
platform was crucial.<br />
The notebooks would be used to monitor and evaluate field<br />
technicians while they worked, allowing supervisors to give them<br />
real- time problem-solving guidance. The units would need to be<br />
automatically updated with new cable maps, location records and<br />
service procedure changes and each would have to be capable<br />
of connecting to any of the several wireless protocols used in the<br />
company’s vast service area.<br />
And they would have to run all the applications the supervisors<br />
had previously performed in-office and file the generated e-documents<br />
on the company’s servers from wherever the supervisor happened<br />
to be. Finally, the computers had to be bulletproof. Failure<br />
of a technician’s computer, with the resultant backing up of service<br />
orders, is bad. Failure of a computer in the truck of someone with<br />
15 employees to support is unacceptable.<br />
The decision to use ruggedized Toughbooks such as the CF-<br />
29 was based on many factors, not the least being Panasonic’s<br />
unique position as the industry’s only core manufacturer of rugged<br />
computers and rugged computer components.<br />
50 ENERGYBIZ MAGAZINE July/August 2005<br />
[ C A S E S T U D Y ]<br />
CONTACT INFORMATION<br />
Rance Poehler, President<br />
Panasonic Computer Solutions Company<br />
Jim King<br />
VP of Operations<br />
Jared Gould<br />
VP of Engineering<br />
Brandi Gil<br />
Director of Marketing<br />
PANASONIC COMPUTER SOLUTIONS COMPANY<br />
50 Meadowlands Parkway<br />
Secaucus, NJ 07094<br />
Phone 800.662.3537<br />
Fax 201.392.6618<br />
www.panasonic.com/toughbook<br />
BUSINESS CONTACT<br />
Thell Gillis<br />
Phone (281) 395-8420<br />
thell_gillis@p2c2.com<br />
A D V E R T I S E M E N T
A D V E R T I S E M E N T<br />
[ C A S E S T U D Y ]<br />
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www.energybizmag.com ENERGYBIZ MAGAZINE 51
Sourcebook<br />
Listing Categories<br />
ENTERPRISE ASSET MANAGEMENT PAGE 52<br />
MAINTENANCE MANAGEMENT PAGE 56<br />
SW IMPLEMENTATION/SYSTEMS INTEGRATION SERVICES PAGE 56<br />
BUSINESS PROCESS PAGE 58<br />
MAINTENANCE OUTSOURCING PAGE 59<br />
OTHER PAGE 59<br />
ENTERPRISE ASSET MANAGEMENT<br />
Advantica<br />
PO Box 86<br />
Carlisle, PA 17013<br />
(717) 243-1900<br />
www.advantica.biz<br />
American Software<br />
470 East Paces Ferry Road<br />
Atlanta, GA 30305<br />
(404) 264-5296<br />
www.amsoftware.com<br />
Artemis International Solutions Corporation<br />
4041 MacArthur Boulevard, Suite 401<br />
Newport Beach, CA 92660<br />
(800) 477-6648<br />
Fax (949) 660-6501<br />
www.aisc.com/sao<br />
Contact<br />
Dan Niswonger, SAO Solution Sales Manager<br />
(847) 441-1802<br />
Dave Thomas, SAO Solution Sales<br />
(312) 231-7170<br />
Artemis International Solutions Corporation is<br />
the world’s leading provider of Investment Planning<br />
and Control solutions. The Artemis Strategic<br />
Asset Optimization Solution is based on a proven<br />
enterprise portfolio and project <strong>management</strong> platform<br />
by the world’s largest energy companies. This<br />
robust and highly configurable platform permits you<br />
to think big for the long term, but lets you start small<br />
and obtain highly measurable productivity results<br />
and/or ROI benefit in the short term.<br />
Champs Software, Inc.<br />
1255 North Vantage Point Drive<br />
Crystal River, FL 34429<br />
(352) 795-2362<br />
www.champsinc.com<br />
52 ENERGYBIZ MAGAZINE July/August 2005<br />
Data Systems & Solutions, LLC<br />
12100 Sunset Hills Road, Suite 310<br />
Reston, VA 20190<br />
(703) 375-2800<br />
www.ds-s.com<br />
Datastream Systems<br />
50 Datastream Plaza<br />
Greenville, SC 29605<br />
(864) 422-5001<br />
www.datastream.net<br />
Datria Systems, Inc.<br />
7211 South Peoria Street, Suite 260<br />
Englewood, CO 80112<br />
(303) 728-1300<br />
www.datria.com<br />
EPRI Solutions, Inc.<br />
942 Corridor Park Boulevard<br />
Knoxville, TN 37932<br />
(865) 218-8000<br />
www.eprisolutions.com<br />
ESRI 380 New York Street<br />
Redlands, CA 92373<br />
(909) 793-2853<br />
www.esri.com<br />
GEAC Enterprise Solutions<br />
11 Allstate Parkway, Suite 300<br />
Markham, ON L3R 9T8, Canada<br />
(905) 475-0525<br />
www.geac.com<br />
Hansen Information Technologies<br />
11092 Sun Center Drive<br />
Rancho Cordova, CA 95670<br />
(916) 921-0883<br />
www.hansen.com<br />
IFS 10 North Martingale Drive, Suite 600<br />
Schaumburg, IL 60173<br />
(888) 437-4968<br />
www.ifsworld.com<br />
Indus International Inc.<br />
3301 Windy Ridge Parkway<br />
Atlanta, GA 30101<br />
(770) 952-8444<br />
www.indus.com<br />
Intenia Americas<br />
Two Century Plaza<br />
1700 East Golf Road, Suite 900<br />
Schaumburg, IL 60173<br />
(847) 762-0900<br />
www.intentia.com<br />
Ivara Corporation<br />
935 Sheldon Court<br />
Burlington, ON L7L 5K6, Canada<br />
(877) 746-3787 x312<br />
www.ivara.com<br />
Contact<br />
Gary Davies, Vice President, Sales<br />
(905) 632-8000 x263<br />
Brian Maguire, Vice President, Marketing<br />
(905) 632-8000 x311<br />
A leader in <strong>asset</strong> reliability solutions, Ivara<br />
combines advanced technology and reliability<br />
expertise to help utilities achieve and sustain a<br />
proactive, reliability-focused approach to <strong>asset</strong><br />
<strong>management</strong>. Ivara EXP software supports the<br />
<strong>asset</strong> reliability process – effectively managing<br />
<strong>asset</strong> health and ensuring the right work is always<br />
done on the right equipment, at the right time.<br />
With Ivara, customers can achieve higher returns<br />
on their <strong>asset</strong> investment and reduce costs while<br />
ensuring safety and environmental integrity.<br />
Lawson Software<br />
380 St. Peter Street<br />
St. Paul, MN 55102<br />
(651) 767-7000<br />
www.lawson.com<br />
LogicaCMG<br />
10375 Richmond Avenue, Suite 100<br />
Houston, TX 77042<br />
(713) 954-7000<br />
Fax (713) 785-0880<br />
www.logicacmg.com/us<br />
Contact<br />
Gary High, Vice President, Sales & Marketing<br />
(713) 954-7096<br />
Sue Wilson, Marketing Manager<br />
(713) 954-7308
Demand dramatic improvement—<br />
unify your workforce, <strong>asset</strong>s and culture<br />
LogicaCMG’s Asset & Resource Management (ARM) suite provides<br />
the foundation utilities need to achieve dramatic business<br />
improvements. With ARM, utilities can unify their workforce, <strong>asset</strong>s<br />
and culture to reduce costs and better manage their business.<br />
By optimizing the use of information and <strong>asset</strong>s with ARM,<br />
companies can produce significant operational changes and move<br />
to the next level of business benefits. ARM provides the critical<br />
information technology that supports smarter business decisions<br />
and enables a utility to stand out from the crowd.<br />
The ARM product suite includes work <strong>management</strong>, mobile<br />
computing, <strong>asset</strong> <strong>management</strong>, compliance tracking, dispatch,<br />
scheduling and reporting capabilities delivered as a pre-integrated,<br />
seamless solution.<br />
LogicaCMG is a major international force in IT services and wireless telecoms.<br />
It provides <strong>management</strong> and IT consultancy, systems integration and<br />
outsourcing services to clients across diverse markets including energy and<br />
utilities, telecoms, financial services, industry, distribution and transport and<br />
the public sector. For more information, contact us at 1-800-334-7101 or see<br />
www.logicacmg.com/us.<br />
SOLUTIONS THAT MATTER<br />
www.energybizmag.com ENERGYBIZ MAGAZINE 53
For over 40 years, LogicaCMG has been a<br />
major international force in IT solutions, systems<br />
integration, consulting, products and services.<br />
LogicaCMG’s Asset and Resource Management<br />
(ARM) product suite combines work <strong>management</strong>,<br />
mobile computing, <strong>asset</strong> <strong>management</strong>, compliance<br />
tracking, dispatch, scheduling and reporting<br />
capabilities into a single, seamlessly integrated<br />
environment.<br />
From the office to the field, ARM streamlines<br />
a utility’s business processes, manages the entire<br />
work stream, controls operational costs, and<br />
manages maintenance and regulatory compliance<br />
activities.<br />
Mainpac<br />
10-12 Clarke Street, Suite 201<br />
Crows Nest, NSW 2065, Australia<br />
+ 61 2 9438 1411<br />
www.mainpac.com.au<br />
Mainsaver<br />
9890 Towne Centre Drive, Suite 100<br />
San Diego, CA 92121<br />
(858) 550-5300<br />
www.mainsaver.com<br />
Mincom<br />
9635 Maroon Circle<br />
Englewood, CO 80112<br />
(303) 446-9000<br />
Fax (303) 446-8664<br />
www.mincom.com<br />
Contact<br />
Marc Duame, Inside Sales Manager<br />
(303) 446-9000<br />
Utility organizations invest billions of dollars<br />
in <strong>asset</strong>s – from personnel to equipment. A single<br />
system to manage equipment maintenance,<br />
purchasing, finance and workforce planning<br />
is critical to ensure cost efficiency and quality<br />
service delivery.<br />
Mincom provides Enterprise Asset Management<br />
(EAM) and e-business solutions to power<br />
generation, transmission and distribution; water<br />
and wastewater; and gas utilities around the world.<br />
Mincom offers a range of consulting services<br />
delivered by experienced professionals with deep<br />
industry knowledge and implementation expertise.<br />
MRO Software<br />
100 Crosby Drive<br />
Bedford, MA 01730<br />
(800) 2 44-3346<br />
Fax (781) 280-2202<br />
54 ENERGYBIZ MAGAZINE July/August 2005<br />
[ C A S E S T U D Y ]<br />
www.mro.com<br />
Contact<br />
Ron Wallace, Industry Marketing Manager,<br />
Utilities<br />
(781) 280-6875<br />
Charles Maul, Enterprise Marketing Support<br />
Representative<br />
(770) 481-3070<br />
Jerry Schinski, Senior Sales Consultant<br />
(201) 909-3765<br />
MRO Software is the leading provider of<br />
strategic <strong>asset</strong> and service <strong>management</strong> solutions.<br />
Maximo Enterprise Suite, the company’s<br />
flagship solution, is delivered on a web-architected<br />
platform and increases productivity,<br />
optimizes <strong>asset</strong> performance, and service levels,<br />
reduces costs and enables <strong>asset</strong>-related sourcing<br />
and procurement across the entire spectrum of<br />
strategic <strong>asset</strong>s.<br />
MRO Software (Nasdaq: MROI) is a global<br />
company based in Bedford, Mass., with approximately<br />
900 employees, 10,000 customers and<br />
more than 260,000 end-users.<br />
NISC (National Information<br />
Solutions Cooperative)<br />
#1 Innovation Circle<br />
Lake St. Louis, MO 63376<br />
(866) 999-6472<br />
www.nisc.coop<br />
NewEnergy Associates, A Siemens Company<br />
400 Interstate North Parkway, Suite 1500<br />
Atlanta, GA 30339<br />
(770) 779-2800<br />
www.newenergyassoc.com<br />
Open Systems International, Inc.<br />
3600 Holly Lane North, Suite 40<br />
Minneapolis, MN 55447<br />
(763) 551-0559<br />
Fax (763) 551-0750<br />
www.osii.com & www.e-scada.com<br />
Contact<br />
Mary Jo Nye, Director of Business<br />
Development<br />
(763) 511-0559<br />
Open Systems International, Inc. (OSI)<br />
provides open and high performance solutions<br />
to utilities worldwide. These solutions include<br />
Supervisory Control and Data Acquisition<br />
(SCADA), Energy Management System (EMS),<br />
Generation Management System (GMS), and<br />
Distribution Management Systems (DMS), as well<br />
as individual software products for electric utility<br />
operation. OSI’s products include monarch, a<br />
Linux, Windows and Unix-based system platform<br />
and Osiris, a new Linux-based secure Remote<br />
Telemetry Unit.<br />
Oracle USA<br />
500 Oracle Parkway<br />
Redwood Shores, CA 94065<br />
(650) 506-7000<br />
www.oracle.com<br />
Peregrine Systems, Inc.<br />
3611 Valley Centre Drive<br />
San Diego, CA 91230<br />
(800) 638.5231<br />
www.peregrine.com<br />
Perfect Commerce<br />
850 NW Chipman Road, Suite 5050<br />
Lee’s Summit, MO 64063<br />
(816) 448-4444<br />
www.perfect.com<br />
Ramco Systems Corporation<br />
Crossroads Corporate Center<br />
3150 Brunswick Pike, Suite 100<br />
Lawrenceville, NJ 08648<br />
(609) 620-4800<br />
www.ramco.com<br />
R.W. Beck, Inc.<br />
1801 California Street, Suite 2800<br />
Denver, CO 80202<br />
(303) 299-5200<br />
www.rwbeck.com/emc<br />
SAP America, Inc.<br />
3999 West Chester Pike<br />
Newtown Square, PA 19073<br />
(610) 661-1000<br />
Fax (610) 661-8868<br />
www.sap.com<br />
Contact<br />
Leila Ahmed, leila.ahmed@sap.com<br />
Paul Jablon, paul.jablon@sap.com<br />
Carl Cross, carl.cross@sap.com<br />
SAP for Utilities is a set of state-of-the-art<br />
software solutions for utilities worldwide. The<br />
integrated, highly reliable, and scalable solutions<br />
enable the end-to-end <strong>management</strong> of business<br />
processes because they are built on the open<br />
architecture of the SAP NetWeaver platform.<br />
Today, in 70 countries around the globe, more<br />
than 950 leading electricity, gas, water, and<br />
municipality utilities in regulated, transitioning, and<br />
deregulated markets rely on SAP for Utilities.<br />
Soluziona<br />
Rosetree Corporate Center<br />
1400 North Providence Road, Suite 4005<br />
Media, PA 19063<br />
(610) 892-8920<br />
www.soluziona.us<br />
A D V E R T I S E M E N T
A D V E R T I S E M E N T<br />
[ C A S E S T U D Y ]<br />
Westar Energy Proves Knowledge is Power<br />
POSITIVE CHANGE<br />
Westar Energy, the largest electric energy provider in Kansas, is<br />
dedicated to providing its 650,000 customers with high quality<br />
service at below average prices. Although Westar Energy has<br />
received national recognition for maintenance and performance,<br />
the utility’s seven energy centers were constrained by homegrown<br />
mainframe information systems and reactive maintenance<br />
practices. The Company’s executives knew they could do better.<br />
They set out to grow best-in-class maintenance organizations.<br />
A select team of Westar Energy employees was created as a task<br />
force to plan the foundation for positive change. Goal-driven metrics<br />
were identified, and a new Enterprise Asset Management (EAM) system<br />
was chosen and put into place. David Walter, Engineer VI in Westar<br />
Energy’s “Engineering Reliability” department explains, “If you can<br />
measure against a goal, you can fix and improve the process. Metrics<br />
force the issue and fuel an environment of continuous improvement.”<br />
The value of this strategy became immediately apparent, and the utility<br />
expanded the EAM initiative over the next four years to include additional<br />
processes, modules, reports, and increasingly aggressive goals.<br />
THE SOLUTION<br />
In 1998, Westar Energy chose SPL WorldGroup’s Enterprise Asset<br />
and Work Management (SPL EAM, formerly known as the Synergen<br />
Series®), to replace its legacy systems. SPL EAM was selected<br />
over other vendor solutions because of its user friendliness, robust<br />
features, configurability, and low overall total cost of ownership. The<br />
application would enable standardized work practices and data formats<br />
across Westar Energy’s seven energy centers.<br />
In less than two years, all sites were live on SPL EAM and maintenance<br />
managers were ready to implement a new, three-pronged<br />
approach to power plant maintenance:<br />
1. Improve Planning and Scheduling: Westar Energy wanted<br />
to modernize its maintenance system and organization by<br />
implementing best practice work planning and scheduling.<br />
2. Integrate Maintenance and Supply Chain: Purchasing<br />
and inventory organizations would be a more closely<br />
integrated partner in support of maintenance efforts.<br />
3. Measure and Improve Results: The utility sought to<br />
increase accessibility of information and better manage<br />
results by establishing goals and performance metrics.<br />
Westar Energy’s greatest challenge involved the cultural/<br />
behavioral and procedural changes necessary to successfully<br />
implement goal-driven practices. Metrics would determine where<br />
weaknesses existed, and procedures would be implemented to<br />
improve performance. Personnel throughout the fleet were motivated<br />
to work together to overcome each limitation in pursuit of<br />
maintenance excellence.<br />
MEASURING SUCCESS<br />
SPL EAM serves Westar Energy work <strong>management</strong> needs, in the<br />
areas of work and project planning, scheduling, permitting, timekeep-<br />
ing, purchasing, inventory control, and more. Every transaction that<br />
occurs in a power plant is sent to the general ledger via SPL EAM.<br />
Using the data collected and stored in SPL EAM, Westar Energy<br />
executives are now able to track and measure performance and chart<br />
progress toward maintenance practice improvement goals.<br />
Westar Energy’s plant maintenance departments perform<br />
approximately 30,000 work order tasks per year and generate about<br />
17,000 work schedules annually. The utility has met several of its<br />
“This year we met our goal for the<br />
percentage of hours spent on predictive<br />
and preventive activities, and we will<br />
very likely raise the bar next year.”<br />
goals in transitioning from reactive maintenance to a more planned<br />
and scheduled environment, and was able to build upon its success<br />
by measuring and improving work package planning, advance<br />
scheduling, schedule compliance, planned materials percentages,<br />
and related metrics. According to Walter, “About 18% of our maintenance<br />
work is currently unscheduled. Recognition of, and visibility<br />
into, the inefficiency of unscheduled work is helping us to change<br />
our work culture.” He adds, “This year we met our goal for the percentage<br />
of hours spent on predictive and preventive activities, and<br />
we will very likely raise the bar next year.”<br />
Westar Energy’s materials and purchasing organizations also<br />
tended to be reactive. With metrics this is changing. The utility<br />
stocks nearly 60,000 SKUs in its warehouses and executes more<br />
than 17,000 purchase orders each year. Objectives such as reduced<br />
inventory, increased use of blanket purchase orders, achieving consignment<br />
goals, and meeting required dates are measured. Westar<br />
Energy’s Generation Business Analyst, Sue Gordon says, “The<br />
internal lead time from requisition generation to purchase order<br />
issue has been dramatically reduced. Replacing previously arduous<br />
tasks with the capabilities of SPL EAM made this possible.”<br />
EFFICIENCY OF INFORMATION BREEDS SUCCESS<br />
Walter concludes, “We’ve always felt that our maintenance organizations<br />
were effective. Today though, with the help of the SPL EAM<br />
solution and a strong focus on continual improvement in our work<br />
<strong>management</strong> process, we are even better. We are far more efficient in<br />
collecting intelligence now. Having ‘exploded’ in this respect is proving<br />
invaluable to our efforts. We now have the ability to continuously evaluate<br />
our progress and raise the standard as we meet our goals. The end<br />
result is a more efficient operation, more reliable service, and greater<br />
customer satisfaction.”<br />
www.energybizmag.com ENERGYBIZ MAGAZINE 55
SPL WorldGroup, Inc.<br />
525 Market Street, 33rd Floor<br />
San Francisco, CA 94105<br />
(415) 963-5600<br />
Fax (415) 963-5601<br />
www.splwg.com<br />
Contact<br />
Cathy McCause, Vice President, Marketing<br />
(925) 658-1056<br />
SPL WorldGroup delivers a leading Enterprise<br />
Asset Management software solution — SPL<br />
Enterprise Asset and Work Management (SPL<br />
EAM) — for collaborative work <strong>management</strong> and<br />
<strong>asset</strong> optimization across the enterprise. SPL<br />
EAM is also available as part of an integrated suite<br />
of best-in-class utility-specific software solutions<br />
including SPL Customer Care & Billing, Mobile<br />
Workforce Management, and Outage and Distribution<br />
Management that helps utilities around the<br />
world achieve competitive advantage while ensuring<br />
a lower total cost of technology ownership.<br />
Southeastern Data Cooperative, Inc.<br />
2100 East Exchange Place, Suite 300<br />
Tucker, GA 30084<br />
(770) 414-8400<br />
www.sedata.com<br />
TMA Systems, LLC<br />
5100 East Skelly Drive, Suite 900<br />
Tulsa, OK 74135<br />
(918) 858-6600<br />
www.tmasystems.com<br />
Xtensible Solutions<br />
PO Box 372969<br />
Satellite Beach, FL 32937<br />
(321) 777-3789<br />
Fax (321) 777-3810<br />
www.xtensible.net<br />
Contact<br />
Greg Robinson, President & CEO<br />
(321) 777-3789<br />
Joe Zhou, CTO<br />
(303) 229-4328<br />
Terry Saxton, VP Special Projects<br />
(763) 473-3250<br />
Achieving your <strong>asset</strong> <strong>management</strong> objectives<br />
will require unambiguous information to be shared<br />
among many applications and users. Xtensible<br />
Solutions offers the Model Driven Integration (MDI)<br />
Framework to meet this requirement in a timely and<br />
cost-effective manner. MDI provides the process<br />
and capability whereby your enterprise can lever-<br />
56 ENERGYBIZ MAGAZINE July/August 2005<br />
age a common language for <strong>asset</strong> <strong>management</strong><br />
goals and objectives, roles and responsibilities,<br />
and <strong>asset</strong> performance metrics that are understood<br />
and correctly used across your enterprise.<br />
MAINTENANCE MANAGEMENT<br />
ABB Inc.<br />
940 Main Campus Drive<br />
Raleigh, NC 27606<br />
(800) 919-4995<br />
www.abb.com/us<br />
Burns & McDonnell<br />
9400 Ward Parkway<br />
Kansas City, MO 64114<br />
(816) 333-9400<br />
Fax (816) 333-3690<br />
www.burnsmcd.com<br />
Contact<br />
Doug Riedel, Associate Vice President<br />
(816) 822-3391<br />
Jeff Greig, Associate Vice President<br />
(816) 822-3392<br />
Founded in 1898, Burns & McDonnell is a fullservice<br />
engineering, construction, environmental<br />
and consulting solutions firm.<br />
The company’s multi-disciplined staff of<br />
more than 1,800 includes engineers, architects,<br />
contractors, planners, estimators, economists,<br />
technicians and scientists, representing virtually<br />
all design disciplines. Burns & McDonnell plans,<br />
designs, permits, constructs and manages facilities<br />
all over the world with one mission in mind<br />
— to make our clients successful.<br />
Camcode Barcode Labels<br />
18531 South Miles Road<br />
Cleveland, OH 44128<br />
(800) 627-3917<br />
www.camcod.com<br />
Caver-Morehead Systems, Inc.<br />
5000 Legacy Drive, Suite 170<br />
Plano, TX 75024<br />
(972) 599-9330<br />
www.caver-morehead.com<br />
Cetaris<br />
41 Constellation Court<br />
Toronto, ON L0G 1J0, Canada<br />
(416) 679-9555<br />
www.cetaris.com<br />
Engica Technology<br />
Newcastle Technopole<br />
Kings Manor, Newcastle upon Tyne, NE1 6PA<br />
United Kingdom<br />
+ 44 (0) 191 201 7777<br />
www.engica.com<br />
har*GIS Field Information Systems<br />
6551 South Revere Parkway, Suite 210<br />
Centennial, CO 80111<br />
(303) 220-0253<br />
www.truckmap.com<br />
Harris Computer Systems<br />
1 Antares Drive, Suite 400<br />
Ottawa, ON K2E 8C4, Canada<br />
(613) 226-5511<br />
www.harriscomputer.com<br />
LinearVision, LLC<br />
198 Van Buren Street, Suite 120<br />
Herndon, VA 20170<br />
(250) 388-0500<br />
www.linearvision.com<br />
LogicaCMG<br />
See complete listing on page 52<br />
Meridium<br />
10 South Jefferson Street<br />
Roanoke, VA 24011<br />
(540) 344-9205<br />
www.meridium.com<br />
SMGlobal Inc.<br />
2911 Waterford Forest Circle<br />
Cary, NC 27513<br />
(919) 434-5146<br />
www.smglobal.com<br />
SW IMPLEMENTATION/SYSTEMS INTEGRATION<br />
SERVICES<br />
Accenture<br />
128 Third Street South<br />
St. Petersburg, FL 33701<br />
(727) 897-7000<br />
www.accenture.com<br />
AMEC Americas Limited<br />
2020 Winston Park Drive<br />
Oakville, ON L6H 6X7, Canada<br />
(905) 829-5400<br />
www.amec.com<br />
Deloitte<br />
127 Public Square, Suite 3300<br />
Cleveland, OH 44114<br />
(216) 589-1300<br />
www.deloitte.com/us<br />
Delve Energy Group LLC<br />
855 Foxberry Farms Road, Suite 200<br />
Minneapolis, MN 55340<br />
(763) 478-3580<br />
www.delveenergy.com
www.energybizmag.com ENERGYBIZ MAGAZINE 57
Doble Engineering Company<br />
85 Walnut Street<br />
Watertown, MA 02472<br />
(617) 926-4900<br />
www.doble.com<br />
Enspiria Solutions, Inc.<br />
10475 Park Meadows Drive, Suite 200<br />
Littleton, CO 80124<br />
(303) 741-8400<br />
Fax (303) 799-6766<br />
www.enspiria.com<br />
Contact:<br />
Hahn Tram, Executive Consultant<br />
(303) 521-3055<br />
Mehrdod Mohseni, VP, Business Development<br />
(303) 521-5395<br />
Chip Scott, EVP, Operations<br />
(303) 949-6144<br />
Enspiria Solutions provides consulting and<br />
systems integration services to help utilities plan and<br />
implement technology-enabled solutions including:<br />
Asset Management, Geographic Information Systems,<br />
Automated Meter Reading, Substation Automation,<br />
Outage Management, Work Management,<br />
and Mobile Field Dispatch. Our experts offer a range<br />
of Asset Management services to enable clients<br />
to succeed across their T&D enterprise including<br />
reliability <strong>management</strong> solutions, investment project<br />
prioritization, performance benchmarking, key performance<br />
indicators, and executive dashboards.<br />
ICF Consulting<br />
9300 Lee Highway<br />
Fairfax, VA 22031<br />
(703) 934-3637<br />
www.icfconsulting.com<br />
KEMA One Burlington Business Center<br />
67 South Bedford Street, Suite 201<br />
East Burlington, MA 01803<br />
(781) 273-5700<br />
Fax (781) 299-4867<br />
www.kema.com<br />
Contact<br />
Jennifer Krabbenhoeft, Director, Strategic<br />
Marketing<br />
(303) 708-9355<br />
Kristen Brewitt, Corporate Communications<br />
(781) 273-5700<br />
KEMA offers technical and <strong>management</strong><br />
consulting, testing, inspections, certification, and<br />
58 ENERGYBIZ MAGAZINE July/August 2005<br />
training services to more than 500 electric and utility<br />
industry clients in 70 countries. KEMA applies<br />
global experience and regional insight in offering a<br />
full complement of services supporting generation<br />
through the consumer side of the meter. Headquartered<br />
in Arnhem, the Netherlands with subsidiaries<br />
and offices worldwide, KEMA employs more than<br />
1,500 full-time professionals and leading experts in<br />
many facets of the energy utility industry.<br />
LogicaCMG<br />
See complete listing on page 52<br />
Navigant Consulting, Inc.<br />
615 North Wabash Avenue<br />
Chicago, IL 60611<br />
(800) 621-8390 x5736<br />
www.navigantconsulting.com<br />
PA Consulting<br />
1750 Pennsylvania Avenue NW<br />
Washington, DC 20006<br />
(202) 442-2000<br />
www.paconsulting.com<br />
POWER Engineers<br />
1295 South Eagle Flight Way<br />
Boise, ID 83709<br />
(208) 685-6355<br />
www.powereng.com<br />
Radio Satellite Integrators<br />
19144 Van Ness Avenue<br />
Torrance, CA 90501<br />
(310) 787-7700<br />
www.radsat.com<br />
Telemetric Corporation<br />
9941 West Emerald Street<br />
Boise, ID 83704<br />
(208) 658-1292<br />
www.telemetric.net<br />
UMS Group Inc.<br />
20 Waterview Boulevard<br />
Parsippany, NJ 07054<br />
(973) 335-3555<br />
www.umsgroup.com<br />
BUSINESS PROCESS<br />
Boreas Group LLC<br />
730 South Elizabeth Street<br />
Denver, CO 80209<br />
(303) 744-2108<br />
www.boreasgroup.com<br />
Bottom Line Impact<br />
1040 North Michigan Avenue<br />
Pasadena, CA 91104<br />
(626) 794-7894<br />
www.bottomlineimpact.com<br />
E3 Consulting, LLC<br />
3333 South Bannock Street, Suite 500<br />
Englewood, CO 80110<br />
(303) 762-7070<br />
www.e3co.com<br />
Elevon<br />
500 West Madison, Suite 1600<br />
Chicago, IL 60661<br />
(312) 258-6000<br />
www.elevon.cc<br />
GE Energy<br />
4200 Wildwood Parkway<br />
Atlanta, GA 30339<br />
(678) 844-5476<br />
www.gepower.com<br />
Hannon Armstrong<br />
1997 Annapolis Exchange Parkway<br />
Annapolis, MD 21401<br />
(410) 571-9860<br />
www.hannonarmstrong.com<br />
INOVx Solutions<br />
17701 Cowan, Suite 260<br />
Irvine, CA 92614<br />
(949) 752-3700<br />
www.inovx.com<br />
Invensys<br />
33 Commercial Street<br />
Foxboro, MA 02035<br />
(508) 543-8750<br />
www.invensys.com<br />
Itron 2818 North Sullivan Road<br />
Spokane, WA 99216<br />
(800) 635-5461<br />
www.itron.com<br />
Ivara Corporation<br />
See complete listing on page 52<br />
MCR Performance Solutions<br />
400 Skokie Boulevard, Suite 375<br />
Northbrook, IL 60062<br />
(847) 562-0066<br />
www.mcr-group.com<br />
Panasonic Computer Solutions Company<br />
50 Meadowlands Parkway<br />
Secaucus, NJ 07094<br />
(800) 662-3537, Option 5<br />
www.panasonic.com/toughbook/utilities<br />
Contact<br />
utilities@p2c2.com<br />
(800) 662-3537, Option 5
© 2005 Enspiria Solutions, Inc., an Osmose company.<br />
The Zen of Asset Management<br />
Hahn Tram – Student of eastern philosophies, father of two, collector<br />
of toy pigs, recipient of the Westinghouse Engineering Achievement<br />
award, foremost industry expert on utility <strong>asset</strong> <strong>management</strong>.<br />
While others fret, deliberate and struggle with the uncertainties of<br />
<strong>asset</strong> <strong>management</strong>, Hahn applies the same calm intelligence,<br />
enlightened intuition and clear comprehension that pervade all aspects<br />
of his life. And while elsewhere confusion may reign, Hahn’s confident<br />
experience make him always mindful of that which has come before,<br />
and that which is likely to follow. Ever aware of the need for balance,<br />
Enspiria’s Hahn Tram is the Zen of <strong>asset</strong> <strong>management</strong>.<br />
Real People with Inspired Solutions to Real Problems<br />
www.enspiria.com • 303.641.2968<br />
For over fifteen years, Panasonic Computer<br />
Solutions Company has produced the industry’s<br />
most dependable mobile PCs—legendary Panasonic<br />
Toughbooks®. Toughbook reliability assures<br />
utility industry professionals maximum uptime and<br />
a significantly lower total cost of ownership. With<br />
durability built into every seal, hinge and connector,<br />
Toughbooks offer the highest reliability rates in the<br />
industry. Toughbooks are ideal whether you’re up in<br />
the bucket, above or below ground or driving over<br />
rural roads.<br />
Toughbooks’ rugged features are unmatched<br />
for durability, with magnesium alloy cases, shockmounted<br />
hard drives and moisture- and dust-resistant<br />
LCDs and keyboards. And with integrated<br />
wireless capabilities, utility workers are able to<br />
receive work orders and make schedule changes<br />
in the field, dispatch and manage crews from<br />
virtually anywhere and instantly access customer<br />
service histories and inventory information.<br />
Platts UDI<br />
1200 G Street NW, Suite 1000<br />
Washington, DC 20005<br />
(202) 942-8788<br />
www.platts.com<br />
Powerlink Corporation<br />
20 South Santa Cruz Avenue, Suite 320<br />
Los Gatos, CA 95030<br />
(408) 399-3355<br />
www.powerlink.com<br />
Sargent & Lundy LLC<br />
55 East Monroe Street<br />
Chicago, IL 60603<br />
(312) 269-2000<br />
www.sargentlundy.com<br />
SmartSignal Corporation<br />
901 Warrenville Road<br />
Lisle, IL 60532<br />
(630) 829-4000<br />
www.smartsignal.com<br />
MAINTENANCE OUTSOURCING<br />
Asset Management Consulting Limited<br />
221 St. John Street<br />
Clerkenwell, London, EC1V 4LY<br />
United Kingdom<br />
+ 44 (0) 20 7688 2828<br />
www.amcl.com<br />
OTHER<br />
SensorLink Corporation<br />
PO Box 301<br />
1975 Valley Highway #9<br />
Acme, WA 98220<br />
(360) 595-1000<br />
Fax (360) 595-1001<br />
www.sensorlink.com<br />
Contact<br />
Ken Borbe, Director of Marketing & Sales<br />
(360) 595-1000<br />
Manufactures meters, sensors, and recorders<br />
for primary voltage. They read current, voltage,<br />
power factor, harmonics, and micro-ohms resistance.<br />
They record profiles including current and<br />
power factor.<br />
Our sensors measure in high voltage environments<br />
where a traditional potential or current<br />
transformers may not be the answer. Our research<br />
team is dedicated to designing high quality, easy to<br />
use sensors that give the right answer. Past projects<br />
include: Open core current transformers, Non-Contact<br />
power factor sensors and Current sensors for<br />
special SCADA applications.<br />
www.energybizmag.com ENERGYBIZ MAGAZINE 59
[ C A S E S T U D Y ]<br />
Asset Management:<br />
Optimized Business Use of Aging System<br />
Information Base<br />
INTRODUCTION<br />
Oklahoma Electric and Gas is completing implementation of a<br />
comprehensive <strong>asset</strong> <strong>management</strong> framework for its distribution<br />
business unit. Working with KEMA T&D Consulting, OG&E has<br />
implemented a method based on a unique approach to T&D system<br />
<strong>management</strong> that incorporates an aging infrastructure model<br />
into its investment, utilization and maintenance decision-making<br />
processes. Its approach also applies an option-based portfolio<br />
optimization method to maximize “bang for the buck” performance<br />
enhancement of its power delivery operations.<br />
OG&E moved to <strong>asset</strong> <strong>management</strong> to improve business performance.<br />
According to Terry Henry, Leader of Strategy, OG&E<br />
Electric Services, “Asset <strong>management</strong> is a change from traditional<br />
engineering standards and operations-guideline driven approach<br />
for decision making and spending to a <strong>management</strong> system that<br />
coordinates all decisions to maximize their joint contribution to the<br />
corporate business case. We believed it would help us focus on<br />
achieving maximum performance for our customers, our stockholders,<br />
and our employees.”<br />
Henry further notes that OG&E knew from the outset that it also<br />
needed to look at the issues and trends it faced due to continuing<br />
wear and tear on an aging T&D system. “We saw trends in our cost<br />
and operations data that indicated potential rising costs and reliability<br />
problems down the road. OG&E wanted to get out in front of<br />
such trends before they became problems. An <strong>asset</strong> <strong>management</strong><br />
approach seemed the ideal way to put any such problems in a business<br />
perspective and to optimize their solution.”<br />
“KEMA had a solid,<br />
fact-based methodology<br />
to address the aging<br />
infrastructure issues and<br />
made a good argument<br />
for including those issues<br />
directly in the <strong>asset</strong><br />
<strong>management</strong> project.”<br />
PROPER TEAMWORK WAS A KEY<br />
OG&E assembled a team that cut across all relevant departments<br />
and backgrounds. They also went outside the company<br />
for expertise that could help them do the job quickly and well.<br />
“OG&E picked KEMA because it had a solid background in business-based<br />
<strong>asset</strong> <strong>management</strong> approaches,“ said Henry. “We<br />
were confident they would listen to us and work with us toward<br />
our goals and needs. KEMA had a solid, fact-based methodology<br />
60 ENERGYBIZ MAGAZINE July/August 2005<br />
to address the aging infrastructure issues and made a good argument<br />
for including those issues directly in the <strong>asset</strong> <strong>management</strong><br />
project.” OG&E and KEMA also worked closely with ABB Power<br />
Technology Services, which provided expertise and support in<br />
evaluation, diagnosis, and condition assessment of major electrical<br />
equipment like transformers and breakers.<br />
AGING INFRASTRUCTURES:<br />
DURABILITY VERSUS JUST RELIABILITY<br />
Lee Willis, Vice President of Asset Management and Planning for<br />
KEMA T&D Consulting, says that equipment aging and its effects<br />
are not well understood in the power industry, particularly their<br />
interaction with business performance. “When people talk about<br />
aging, they use it as a proxy for condition deterioration. Age and<br />
time in service create wear and tear that gradually erodes condition.”<br />
But age itself is a good thing, Willis insists. “An optimum<br />
business strategy means getting the most value out of everything<br />
the utility owns or buys, and that means making it last as long as<br />
practicable.”<br />
Working with utilities in Europe and the US, KEMA developed a<br />
unique “sustainable point” durability analysis of historical <strong>asset</strong> base<br />
operating data, which projects future changes in condition, failure<br />
rates, repair and replacement costs. The utility can see where, how,<br />
and why its costs and reliability challenges will change over time or<br />
as a function of decisions made about utilization and maintenance.<br />
Willis explains the approach finds an optimum sustainable business<br />
case. “There is an optimum age or condition profile for each class<br />
and type of equipment in the system, one most compatible with the<br />
utility’s business needs. Even fifty-year old poles and transformers<br />
can have decades of life remaining in them if well serviced. A utility<br />
that has the right base of information can determine where and how<br />
to allocate budget and scarce resources to do the best job of getting<br />
value out of its <strong>asset</strong>s, old and new.”<br />
A utility must be pro-active, and work hard, to get maximum<br />
value from its older equipment. “Older equipment can be a lot like<br />
older people,” explains Randy Schrieber, Senior Vice President,<br />
Power Technology Services, at ABB, whose group did much of<br />
the project’s major equipment evaluation. “It can go from good<br />
condition to bad more quickly than new. It’s prone to more frequent<br />
breakdowns. So you have to inspect and monitor it a bit<br />
more frequently, and maybe perform more maintenance. You have<br />
to balance those costs, remaining life, and risk of failure against<br />
the cost of replacement. This means a lot hinges on your understanding<br />
of the equipment’s condition.”<br />
OG&E’s Henry agrees, adding that the utility needs to look beyond<br />
just its equipment cost and lifetime issues, at Operations costs and<br />
performance issues, too. The optimum way to provide good service<br />
quality to customers might be to learn to ‘live with’ a slightly rising<br />
failure rate from aging equipment through improved operations. “You<br />
might eliminate the effects of aging trends on customer service by<br />
improving response and restoration – by more efficiently handling<br />
high outage rates.”<br />
A D V E R T I S E M E N T
A D V EE RR TT II SS E M E N T<br />
TAKE BUDGET OUT OF PROJECTS,<br />
[ C A S E S T U D Y ]<br />
NOT PROJECTS OUT OF THE BUDGET<br />
The best way to balance all these disparate issues is by using a<br />
rigorous <strong>asset</strong> <strong>management</strong> approach to select the best matching<br />
set of programs and strategies, says KEMA’s Willis. “But the<br />
key point, based on the results I’ve seen, is that you can’t ignore<br />
equipment aging trends if you’re trying to do effective <strong>asset</strong> <strong>management</strong>.<br />
The two go hand in hand.”<br />
Zac Hager, Strategy and Total Quality Engineer with OG&E’s<br />
Asset Management team, notes that KEMA helped his team apply<br />
two other features that further improve <strong>asset</strong> <strong>management</strong>. “First, we<br />
think in terms of three budget areas, investment, maintenance, and<br />
operations, rather than two.” On KEMA’s advice, the traditional O&M<br />
area is viewed as two separate spending areas that buy different<br />
types of performance. Inspection and maintenance extend equipment<br />
lifetime and lower failure rate. Operations budget improves response<br />
and restoration to lessen the effects of escalating failure rates. “It can<br />
make better business sense to prepare and be able to react well,”<br />
he says, “than to try to lower breakdown rates. The key, always, is to<br />
balance and target spending and resources across those areas well.<br />
Second, OG&E’s <strong>asset</strong> <strong>management</strong> framework uses an optionbased<br />
approach which allows it create extra leverage as it balances<br />
activities and investment areas.”<br />
KEMA’s Willis notes that several utilities have reported rather<br />
disappointing results from <strong>asset</strong> <strong>management</strong>. “In every case they<br />
were using an <strong>asset</strong> <strong>management</strong> portfolio method to prioritize or<br />
optimize projects defined and scoped in the traditional manner.<br />
That just doesn’t work. If the traditional project paradigm goes<br />
in, traditional results come out. You have to set up a system that<br />
will take budget out of projects, not projects out of the budget.”<br />
The secret is creating a set of flexible, performance-based project<br />
options guidelines to replace the traditional engineering standards<br />
approach to the assessment of needs and specification of project<br />
design. “There are always several ways to do any project,”<br />
Willis adds, each with different costs and different results. Halfmeasures<br />
sometimes deliver far more than half results, and are<br />
a preferred approach. Other times ‘gold-plating’ will be justified<br />
based on what it brings. “The key is to let the portfolio optimization<br />
see those options, their cost and results differences, and make the<br />
decision about how to best balance all options from all considerations.”<br />
Do that, Willis says, and the utility will get the big impacts<br />
its upper <strong>management</strong> is expecting.<br />
Doug Patterson, Senior Planner at OG&E, and project manager<br />
for the effort, reports that a third of the project involved<br />
determining how to construct project and program options objectively,<br />
comprehensively, and efficiently. “Absolutely nothing can be<br />
untouchable when it comes to cost reduction. Remember, if you’re<br />
taking money from one place it’s because you want spend it where<br />
it will provide more value. It’s all to make the greatest contribution<br />
to overall company business goals.”<br />
OG&E also uses its portfolio optimization to select the penetration<br />
of maintenance and technology programs. “A big part<br />
of our planned performance improvement is based on what you<br />
might call optimized cherry picking,” Patterson adds. “We don’t<br />
have to inspect all breakers if we can target the ones that need<br />
service. Some feeder line switches produce six times the ‘bang’<br />
when you automate them compared to others.” Patterson’s team<br />
entered such programs in targeted 10 percent increments and let<br />
the optimization determine penetration and timing.<br />
“The key is to let the<br />
portfolio optimization<br />
see those options, their<br />
cost and results<br />
differences, and make<br />
the decision about how to<br />
best balance all options<br />
from all considerations.”<br />
GOOD RESULTS<br />
“This project has gone a long way toward helping OG&E prepare<br />
for the future,” OG&E’s Henry reports. The biggest impact may not<br />
be the technical, but rather the institutional and team understanding<br />
OG&E gained. “This project helps us take a business basis<br />
in our decision-making and focus on coordinating our activities<br />
so all decisions are coherent.” And OG&E gained a firm handle<br />
on system aging and how to manage for the inevitable results of<br />
wear and tear on its system. “We better understand what we face.<br />
We know what we know and what we don’t know, along with the<br />
priorities we should put on improving areas of our knowledge base<br />
and our system. Most important, we have a good roadmap for the<br />
future, for both IT and process improvements, and for how to invest<br />
and manage our T&D system going forward.”<br />
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62 ENERGYBIZ MAGAZINE July/August 2005