Name / John Hodemaekers / Session / 6
Company / ENECO Energy Utrecht / Block / 3
Address / PO BOX 8365 / Question n° / Presentation on selected paper R6-46
3503 RJ Utrecht, The Netherlands / Language used on the floor / English
Phone / ++ 31 30 297 5614 / Accompanying visuals on file ? / Yes
e-mail /
Title: Multi-Utility Asset Management, a businessdriver oriented concept
Text:
See next pages
Multi-Utility Asset Management, a businessdriver oriented concept
John Hodemaekers, CIRED Barcelona 13 may 2003
Slide 1:Slide 2:
slide 1:
The paper my colleague, Mart van der Meijden, and I issued describes the organisational change to prepare our company for the future in a regulated environment. This exercise was undertaken in 2001 and 2002 closely related to a possible take-over of REMU by Endesa. Strategy-analyses and business-development was done with David Scorah, DRS Corporate Management
The business driver concept described in the paper explains how the output to be delivered and the types of drivers lead us to the new organisation. The organisation, in which accountabilities are clearly defined, at every level from the topstructure, down to the individual jobs and into agreement with individual staff-members.
Being aware of the major changes a 100 day plan was put in place to stimulate and control the changeproces. The 100 day plan started January 1st and was completed April 12th.
Today I will describe the changes and update you on the progress.
I should also inform you that ENECO Energy acquired REMU and not Endesa.
Slide 2:
A survey of strategic issues and added value analysis were performed. Stakeholders-interests were analysed as well as the level of change needed for the transformation.
The choice was made to implement a multi-utility asset management organisation. We also realised this would not be the final stage. To be cost-effective, the asset base had to increase to 2 to 4 times the size of 2001 and new non-regulated income became a key-issue. The regulator would limit the maximum regulated-result and a new owner was expected to want higher returns.
Because of the level of change (I'll explain later) we made a development plan for the new organisation giving us 3 years time to secure the first changes and to become mature for the external market. Projections of the expected return and the influence of the regulator indicated this period to be acceptable. In this period, apart from developing asset management capabilities the service provider in the organisation must develop into an competitive, super efficient production and service-unit.
Slide 3:Slide 4:
Slide 3:
Two tables will illustrate changes needed to implement the plans. The colour indicates the level of change; orange means avarage changes, red means radical changes. The middle column gives the Multi-utility model, the right column the “extras” to become a player in the growth model.
Because the asset manager is doing new things, new processes were developed to deliver the expected output. Basis is to standardise as much as possible, technique and price, to be able to make objective investment choices.
The implementation of the new processes and getting the accountabilities in place required for a completely new organisational structure. A structure in which focus for customer-processes was positioned in a Customer Support Unit and asset driven-processes were placed in the Asset Manager Unit. This in combination with an efficient Service provider-process.
To make sure that processes are properly supported an information architecture was developed to get the right information systems in place.
The breakthrough to the marketgrowth asks for open processes and systems to interface with other asset owners, asset managers and other contractors
Slide 4:
It is evident that all changes in the first table mean significant change for our people in terms of their skills and the organisational culture.
Every staff member will be allocated with accountabilities leading to individual targets, evaluated three times every year. Many of them working with other colleagues undertaking new tasks. This represents a great change after doing the same things for years without accurate feed-back on performance. They are accountable now for individual targets within the overall result of the team.
They also must get used to new information systems.
If the company wants to be player in the free market the links between the parts must loosen to get the confidence of other marketplayers. There is no longer a one-to-one relation between the Asset Owner and his Service Provider. Competition and real commercial action will bring uncertainty, meaning the end of the “old brotherhood culture”. On the other hand, it will be a challenge for the real winners within the company.
In the meanwhile safety and craftmanship must be maintained.
Slide 5:Slide 6
Slide 5:
A 100 days plan was put in place for the transformation. A plan was completed April 12th, 2003.
The first result: > IT WORKS !!!
The new organisation requires the Asset Manager and Customer Support businesses to commision work from the Service provider, the Service Provider delivers. But much focus is still on implementing processes, sometimes difficult because of staff vacancies in Asset Management.
The Asset Manager has prioritised techniques and tools to support the processes. The necessairy asset-data reposatory is the main focus, checking completed data and looking for missing data.
The Service Provider is testing and refining processes. This action prepares the implementation of the workflow-managementsystem.
A point of concern is the leading role of the Service Provider in this stage of the development. Due to vacancies and lack of tools in the Asset Manager the Service Provider sometimes creates his own work to avoid work production from slowing down.
Slide 6:
The conclusion that the processes work and start to deliver means it is time to make them work completely by implementing tools and techniques as well as completing staff-competences and filling staff vacancies.
To get more of a grip on the Service Provider the Asset Manager will implement LCC-analysis tools and tools to create maintenance and investmentplans, using the completed asset-data-reposatory. Benchmark will start of a long voyage from cost-prices of today to best price serviceprovision on competitive market rates of tomorrow. A vehicle for the Service Provider will be the workflow-management system.
Preparing the business for generating income in the free unregulated market, an active market search has started for new product-market combinations.
And, of course, the take-over from REMU-Infra by ENECO-Energy, means that today two complete infrastructurecompanies excist in ENECO-Energy.
A process has started to create one company arising from these two structures. So probably in 2005 I will be able to present to you an even better company, based on the experiences with the two different structures of today.
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John Hodemaekers
Session 6, block 3: Multi-Utility Asset Management, a businessdriver oriented concept