Rapid systems integration at IES utilities

Rapid systems integration at IES utilities

Joe Harnish
Project Manager, IES Utilities
P.O. Box 351, Cedar Rapids, IA 52406
jharnish@,ies.iec-energv.com

Andy Gay
Project Manager, Convergent Group
6200 S. Syracuse Way, Suite 200
Englewood, CO 80111
agay@cgv-grp.com

Abstract
IES Utilities, an investor-owned electric and gas utility headquartered in Cedar Rapids, Iowa, has 340,000 electric and 180,000 gas customers. The company is in the process of merging with two other Midwestern U.S. utilities, Wisconsin Power & Light and Interstate Power Corporation. The new entity will have 850,000 electric and 360,000 gas customers.

IES Utilities is instituting re-engineered business processes with the support of a rapidly implemented suite of technology. The IES Vision Information Management, Planning, and Customer Technology (IMPACT) project integrates new systems, such as AM/FM/GIS, Work Management, Distribution Management, and Computer Aided Dispatch/Mobile Data Terminals, with the utility’s legacy business systems.

This paper discusses some of the special considerations/features of the project, including:

Rapid deployment - two-year schedule, including data conversion/migration
Working with merger partners to develop common IT systems
Use of the 80/20 rule to get the most “bang for the buck”

The presentation will focus on project management issues as well as the technology involved. The important factors of vendor partnerships, subcontractor management, executive sponsorship, and scope/schedule management will also be discussed.

Introduction
At the time of the 1998 AM/FM International Conference, IES Utilities will be 20 months into its rapid systems integration project. Addressing many of the same challenges facing utility companies throughout North America, including pending deregulation, increased competition, and the drive to increase shareholder value, IES has embarked on a very creative, aggressive and closely watched information technology (IT) project.

Project overview
The Vision IMPACT (VIP) project is a 24-month effort that involves the development of a new integrated information system to support the Energy Delivery Process at IES Utilities. The VIP project is the direct result of the 1996 employee-driven Process Redesign effort. Several business drivers instigated this large systems integration project, including the following: enhance customer service, reduce operating costs, and ultimately change the corporate culture through a new energy delivery process.

The VIP project involves the integration of four major new information systems, including an automated mapping/facilities management/geographic information system (AM/FM/GIS), a work management system (WMS), a distribution management system (DMS), and a computer aided dispatch/mobile data terminal (CAD/MDT) system (Figure 1). These new systems are integrated with each other as well as with existing IES systems, including the Material Management Information System (MMIS), Customer Information System (CIS), Supervisory Control and Data Acquisition (SCADA), Iowa One-call, and Property Accounting.

The Economic Value Added (EVA) analysis for the project is positive and showed a shortterm tangible payback, without taking into consideration intangible paybacks, such as improved customer service and response time. With a 24-month project schedule, including data conversion and migration, IES is geared up for very rapid deployment of the new systems. In fact, the VIP project has one of the most ambitious systems integration schedules currently underway in the utility industry. IES is also believed to be the first utility in North America to implement and integrate the four VIP technologies.

Vendor partnerships and management
More than 35 people are working on the project, including a core IES project team of 9 from business and 15 from IT, along with an additional 12 people from Convergent Group, the systems integrator.

In addition to the core project team and consultants, several vendor partners are involved in the project. Because of the tight development and production schedule, IES realized early on that it would need to rely on Convergent Group to economically and effectively manage its vendor partners in order to meet its schedule.

Five main vendor partners are involved with the VIP project. In addition to Convergent Group, there are the vendors associated with the four systems, which include Severn Trent Systems (WMS), Smallworld (GIS), Configured Energy Systems (DMS), and Mobile Data Solutions, Inc. (CAD/MDT). MSE Corporation is the vendor in charge of data conversion and migration.

As systems integrator, Convergent Group is responsible for managing all vendor contracts. This includes negotiation and procurement, installation and installation support, data acceptance testing, scope and schedule management, budget management, contract management, version upgrades, and software maintenance. The agreement with Convergent Group allows IES to take advantage of existing relationships with additional suppliers, including Compaq, Hewlett Packard, Oracle, and Telxon.

This arrangement with Convergent Group has allowed the IES core project team to concentrate more fully on their respective assignments. Instead of spending hours on the phone with vendors, team members have been able to dedicate themselves to the specific aspects of the project where their experience and knowledge are most needed.

IES determined early on in the project that each vendor has its own style and method of doing business. Convergent Group has helped “bridge the gap” when necessary and worked to establish mutually beneficial partnerships between the VIP project team and all of the vendors.

Project dynamics and challenges
Of course, nothing ever goes as planned, and a large systems integration project is no different. Even though the VIP project has only a 24-month schedule, several events have impacted the project in one way or another.

For example, in February 1997, the VIP project changed GIS software vendors. Fortunately, the project team was able to use all of its existing functional requirements documentation and move quickly to a new platform. After all was said and done, thanks to strong vendor management and relationships, the short period of time that was lost has been made up by efficiencies inherent with the new platform.

Along those lines, the VIP project has also dealt with rapid prototyping and core product upgrades during the life of the project. For example, Severn Trent Systems continues to release newer versions of its work management system. The issue for the VIP project team is deciding the most effective and efficient way to use the newest version of software available. This decision is typically based on the benefits of the new software versus the time and resources required to install the new version.

Another ongoing challenge is the potential impact that IES’ planned merger with Wisconsin Power & Light and Interstate Power Company might have on the VIP project. By the time this paper is published, in all likelihood, that merger will be complete. However, in the months leading up to the merger, there has been significant discussion about how to integrate the three companies’ various information systems.

Clearly, this issue is of great importance to many utility companies that are currently implementing expensive and aggressive systems integration programs and to those that may also face a potential merger and/or acquisition situation at any time.

IES has found it very valuable to involve its merger partners in the ongoing discussion, development and implementation of the four technologies. The three companies can share experience and knowledge with each other, and together, they can determine the strategic direction the company must take to address the enterprise-wide technology needs of the newly formed organization. They also know they must be selective about which technological opportunities the organization pursues. However, before the best technical solutions can be agreed upon, common business processes must be established enterprise-wide. This is not an easy task because each company has worked hard to streamline its work processes, and it is difficult to identi~ the most appropriate for the entire organization. From there, the issue becomes which technologies best support those practices. One of the issues that IES and its merger partners have addressed is the different levels of automation among the merger partners. Each company is at a different point in its automation efforts. At the point of the merger, decisions must be made about which automation effort is the most appropriate for the whole, newly formed organization.

Project management
Many books and conference papers have been written about project management. Because each individual project has its own set of dynamics and challenges, it seems difficult to try to identifj sure-fire ways to ensure strong project management and ultimately a successful project implementation.

However, during the course of this systems integration project, the VIP project management team has utilized some tactics that have proven successful.

In terms of schedule and scope management, the VIP project has taken a fairly new approach. Each of the four VIP systems is being deployed in three phases: proof of concept, production, and extended functionality. The proof of concept phase for all four technologies began at the same time. During the proof of concept phase, IES leveraged off-the-shelf solutions and configured them for the company’s specific needs. During the production stage, the VIP team refined and enhanced the applications, based on user feedback, for production use and integration with other systems. The extended functionality phase occurs once users become familiar with the technology, and they are able to provide the project team with additional application ideas to enhance the systems.

This phased approach to the schedule has been effective for several reasons:

It allows users to see the base product functionality as soon as possible and to fine-tune production requirements.
It is flexible enough to allow variances in delivery times between new technology and legacy system integration.
It effectively budgets for the first round of application enhancements.

Another project management method that has proven to be successful is the “80/20 Rule.”

Following this “philosophy” of sorts requires that the project team focus on the most important 80 percent of the project deliverables. These are the high payback items within the scope of work that best support the business processes. The Project Team documents the smaller, more detailed items that constitute the other 20 percent of deliverables and deals with them at an appropriate time later in the project -- or defers them indefinitely.

One example of how the VIP team used the “80/20” rule is through software design and implementation. The IES philosophy is to buy instead of build software. The VIP team looked carefully for software packages that could give IES 80 percent of what the company needed. In turn, IES did not spend large amounts of customization dollars trying to make up for the lacking 20 percent.

Strong and loyal executive sponsorship is key to good project management. The support of key executives is vital to a project’s long-term survival for several reasons. The first reason is that the project’s executive sponsors are responsible for communicating about the project and its progress to their executive colleagues. If the executive sponsors keep the “higher-ups” informed about the project’s benefits to the company, the project has reduced the risk of losing its funding. This ongoing communication with other executives is also important in case a project sponsor retires or is reassigned to a different area of the company.

In the case of the VIP project, the original executive sponsor retired from the company after about eight months. However, because the team had built strong relations with other executives, including the new project sponsor, the transition was smooth and did not negatively impact the project.

It is the executive sponsor’s responsibility to provide regular project updates to her colleagues. The project schedule, risks, and issues are reviewed with the sponsor and select executives on a monthly basis.

Conclusion
The goal of the VIP project is to help IES Utilities and its merger partners leverage their vast range of data in order to transform the way that they do business. As a result of the VIP project, employees will make smarter and quicker decisions and complete customer service orders much more rapidly. Many of the positive benefits of the VIP project technologies will involve increased speed. Perhaps, then, it makes sense that the VIP project, in particular its schedule, is in a highly aggressive and rapid implementation mode.