Better Asset Tracking in Discoms through Innovative Process & IT Solutions. September 2013

Better Asset Tracking in Discoms through Innovative Process & IT Solutions September 2013

What is unique to Asset Management in T&D Segment? Asset Traceability / Asset Tracking Key Prerequisite Asset Maintenance / Asset Management To analyse the life cycle of individual equipment, the movement of each equipment needs to be traced across all possible locations where identical equipment could be installed interchangeably, including not just field locations but also workshops, stores, etc Unlike generation (or manufacturing / processing) plants, T&D assets are not confined within battery limits, but spread out geographically far beyond Utility s own premises Copyright 2012 Accenture All rights reserved. 3

What makes Asset Tracking more complicated Assets are spread out geographically Assets move across locations Huge Number and Complex Variety of Assets Assets have long life Complexity gets reinforced over time as new assets keep getting inducted while old ones remain untracked Copyright 2012 Accenture All rights reserved. 4

Why Asset Tracking did not get addressed with advent of ERP in Discoms Conventionally, business processes are structured around Departments (eg, Materials, O&M, Projects, Finance). Same paradigm got adopted in ERP implementation resulting in disconnects between databases of various Departments of the same Discom not just legacy asset base, but even new assets ended up becoming untrackable over time since root cause remain unaddressed Copyright 2012 Accenture All rights reserved. 5

How Accenture helped BSES overcome similar challenge Department: Projects / Engineering (Planning & Construction) Stage: Asset Induction IT Modules: SAP PS Custom-dev. software Different IT modules had different identifiers for same device Department: Finance Stage: Asset capitalization / Asset retirement IT Modules: SAP FICO Department: Operations & Maintenance Stage: Asset Maintenance IT Modules: SAP PM SAP PS Custom-dev. softwares custom-developed softwares and SAP did not interface seamlessly Department: Contracts & Materials Stages: Purchase Stores Scrap IT Modules: SAP MM Custom-dev. software Copyright 2012 Accenture All rights reserved. 7 7

How Accenture helped BSES overcome similar challenge Department: Projects / Engineering (Planning & Construction) Stage: Asset Induction IT Modules: SAP PS Custom-dev. software Establish 1:1 correspondence between asset identifiers across all ERP modules by mapping them uniquely. Build in IFRS compliance. Department: Finance Stage: Asset capitalization / Asset retirement IT Modules: SAP FICO Department: Operations & Maintenance Stage: Asset Maintenance IT Modules: SAP PM SAP PS Custom-dev. softwares Minimize customdeveloped softwares not integrated with ERP Department: Contracts & Materials Stages: Purchase Stores Scrap IT Modules: SAP MM Custom-dev. software Copyright 2012 Accenture All rights reserved. 8 8

How the Journey Unfolded (summarized with the benefit of hindsight!) 1. Assess As-is Assess the current operations Current business processes Where are the gaps? Current work practices Are the existing processes being adhered to? Current people s capability Are the people ready for next level of process maturity? Scale of work How many locations? How many assets? How many data points per asset? Assess the current IT landscape ERP: How different modules talk to each other? Are the identifiers mapped 1-1 and unique? Custom Softwares: How they talk to each other and to ERP? GIS: How tightly is GIS integrated with ERP? Copyright 2012 Accenture All rights reserved. 9

2. Design Phase Redesign Business Processes Review IT Vision Develop IT Functionality in line with new process design Asset Induction: Purchase, Stores Asset Operations: Issuance from Store > Installation > Movement > Repair > Reinstallation Asset Retirement: Scrapping Financial Management: Asset Capitalization / Decap Custom Softwares: Will they be sunset and functionality moved into ERP? Or will they continue? GIS: How will GIS be handled in revised scheme of things? IFRS Compliance: Existing? To be built? Not now? Modify modules related to Finance, Purchase, Inventory, Scrapping, Maintenance, Projects Migrate functionality of custom-softwares into ERP Gather legacy data Prioritize asset classes; phase out workplan Conduct field surveys to gather data afresh; match with legacy records Copyright 2012 Accenture All rights reserved. 10

3. Implementation Phase (Phasing planned by Material Codes) Formulate Rollout Schedule Estimate timelines and fix one D-Day for each material code beyond which, all new assets for those material codes shall be inducted under the revised processes Conduct legacy data surveys for corresponding material codes before these D-Days Training & Awareness Communicate extensively and involve all personnel / depts before rolling out any process or IT changes Roll out new systems and processes Starting with top priority asset class, roll out new processes across IT landscape and field operations Continue process for all asset classes Institutionalize before Consultant withdraws Set up a dedicated dept under O&M ( Equipment Tracking Group ) or ETG Copyright 2012 Accenture All rights reserved. 11

Key Challenges & Learnings Challenge Work required is too vast Most asset base comprises old legacy assets, about which no concrete data is readily available. Difficult to enforce discipline across field work practices due to practical problems How can we show some quick-wins? Learning Phase out by asset class. Pick high value assets contributing maximum to Fixed Asset Register by Rs value. Make a beginning today. Plan field surveys effectively. Make pragmatic assumptions so that data can be tracked today onwards. Train well. Communicate well. Then enforce like hell. It is only a mental block and can be overcome by right mindset at the leadership level. You can t. It is a long drawn process spread over several years and does not come cheap. Plan first, implement later. Don t jump into launching surveys. Copyright 2012 Accenture All rights reserved. 12

An integrated approach to asset management has far-reaching benefits for the Discom Increasing level of maturity over time Asset Tracking = IT Foundation Phase Asset Management = IT Automation Phase Asset Maintenance = IT-enabled Analytics Phase Key Benefit: Right Information Accurate information about the assets (eg, asset location, health, etc.) becomes available consistently across all departmental sources of information in a timely manner, as a single version of truth. Key Benefit: Right Planning This information can be used by all depts of the organization for effective asset management, eg, procurement & inventory planning, asset lifecycle management, financial projections (based on capitalization / retirement/ etc.) Key Benefit: Right Actions This enables the Discom to: Improve efficiency of Breakdown Maintenance (BM) Improve compliance of Preventive Maintenance (PM) Lays the foundation to move towards Predictive Maintenance (PdM) Copyright 2012 Accenture All rights reserved. 14

Asset handling solution should be phased out over time to facilitate smooth transition and effective change management Phase 1 Foundation Phase Linking up of unconnected databases and business processes Phase 2 Automation Phase Online / Real Time Monitoring of Asset movement across field Phase 3 Analytics Phase Analytics for optimization decisions and Executive Dashboards for monitoring One time interventions for legacy assets Process Re-engineering & IT enablement for prospective assets Concurrent / Prerequisite Requirement: ERP Copyright 2012 Accenture All rights reserved. 15

Learnings for other Discoms facing similar challenges Discoms yet to implement ERP: Undertake BPR with special focus on asset tracking before ERP implementation ERP Blueprint Design to factor the revised business processes Implement ERP with these learnings built in right from Day 1 Discoms with ERP already implemented but assets not fully trackable: It can still be fixed Don t compromise or accept the problem as fait accompli Develop a long term action plan Involve all departments / employees / stakeholders Modify business processes Modify IT applications Once implemented, adhere to the newly laid discipline. DON T FALL IN THE TRAP OF EMERGENCY WORK allowing compromise to compliance. Copyright 2012 Accenture All rights reserved. 16

Where else can these learnings be applied with some adaptation Power Distribution Power Transmission Telecom/ Mobile Tower Companies City Gas Distribution Water Distribution Copyright 2012 Accenture All rights reserved. 17