Powercor upgrades SAP system for increased efficiency and e-business preparation

With a distribution network area covering more than 55 per cent of Victoria, Powercor is that state’s largest power supplier. A progressive and highly competitive company, it has been benefiting from SAP solutions since 1997.

Sydney, AustraliaIn keeping with a “domino” core system upgrade strategy, where key software solutions are upgraded on a rotational basis, January 2000 marked the commencement of Powercor’s R/3 upgrade to R/3 version 4.6b, which prepares the company to take advantage of the mySAP.com e-business initiatives.

According to Powercor’s General Manager, Information Technology, Mr Glen McLean, the upgrade project started almost immediately after 4.6b was released. “We found ourselves on the bleeding edge of SAP technology,” states McLean. “Even then, with a system that had just been released to the public, we effected a major upgrade that came in on-time and well below budget.”

The upgrade, that encompassed Financials and Controlling, Human Resources, Payroll, Work and Asset Management, Materials Management, and Sales and Distribution, was initially allocated a $2 million budget and a completion date of June 27, 2000.

Upon completion – which met the June 27 deadline – a $200,000 saving had been reported by the project’s management team.

With the upgrade complete, Tony Matheson, who was the upgrade project manager, assumes the role of Powercor SAP Support Manager to oversee numerous application projects that will build on the solutions within the mySAP.com initiative.

“One of the projects we’ll be undertaking will be Employee Self Service [ESS],” says Matheson. “This will enable our staff to view, create and maintain their personal data in the SAP system via our intranet.

“Just as important will be the use of mySAP.com solutions to establish e-business relationships with many of our customers and business partners. Again, because we’ve nurtured our own SAP skill sets within the company, we’ll be able to achieve these projects with minimum impact on personnel, time and finances.”

Reaping benefits of internal skills
According to McLean, there is nothing extraordinary about the successful outcome of the upgrade.

“When we first implemented R/3 in 1997, we implemented a number of strategies that have contributed both to the continued success we’ve had with its use and the on-time and under budget upgrade project,” he says.

Among the strategies referred to by McLean are internal Powercor SAP user groups.

Consisting of staff from IT and line-of-business, the user groups focus on how SAP can best be utilised within the organisation. This complementary combination of skillsets – IT and business – has brought about an impressive depth of R/3 skills within Powercor.

“We have people within our organisation who have an incredible understanding of the SAP solutions we use,” says McLean. “The upgrade project’s manager, Tony Matheson, comes from a business background and has been working with our IT people and line of business staff for several years on the continued refinement of our R/3 systems.”

It is this focus on developing internal R/3 skills that Matheson states is one of the keys to what is a “best practice” upgrade. “Ninety per cent of the upgrade was achieved by using our own people, with little reliance on external consultants,” he says.

“We closely examined how the new systems would impact on the day-to-day activities of staff, how much training would be required, what resources – both internal and external – would be required for the upgrade, and what it would deliver by way of enhanced functionality.

“We then set out to achieve everything we planned for.”

Throughout December and January, extensive planning was conducted by the upgrade project team. Potential impact of business, establishing timelines and identifying personnel from Powercor, SAP and other external companies, who would comprise specific teams.

Among the issues that needed to be addressed was the integration of SAP with other third-party systems used within Powercor, such as those used for knowledge management and GIS.

Again, it was the company’s strategy of building internal skillsets that brought about success in these areas.

Matheson’s team was able to utilise the extensive Powercor SAP system and application documentation that had been developed over the years to create approximately 1,200 test scripts. These scripts were then used to test all aspects of the company’s SAP usage, including integration with other systems.

Emphasising “mission-critical”

Appreciating the importance of SAP within Powercor can only really be achieved in understanding its mission-critical role.

For over 600 users across the Powercor organisation, an interface to the various SAP modules provides a means by which a multitude of activities are initiated, tracked and maintained. While certainly, the term “mission-critical” seems to be one of the most overused in the IT industry, McLean justifies its use in respect of Powercor’s SAP implementation by putting forward the following monthly statistics:

Scheduling of 50,000 work hours

Rescheduling of 10,000 separate project activities
-700 projects taken to close out stage
-10,000 power pole inspections
-Tracking of 5,000 line fault reports
-1,000 customer quotes.

“The SAP systems we have in place are at the very heart of our business,” says McLean. “We saw the upgrade as being a means by which we could enhance and extend the functionality they provide us.”

Since the original go-live date of Powercor’s R/3 system, staff has constantly examined ways in which it can streamline the maximum number of business operations.

“This is probably one of the least-used strengths of the SAP R/3 solution,” states Matheson. “While many companies implement R/3 to address known business performance issues, we also use it to examine areas of our business that might otherwise be considered quite streamlined.

“By doing this, we’ve uncovered a number of inefficiencies in certain areas that we’ve then been able to address.”