PowerPlan Solutions Optimize TVA Project Portfolio Management

Background

“With PowerPlan, our information is now centralized and transparent, allowing us to make faster, better operational decisions, allocate scarce resources more effectively and have the field focused on operations, not accounting. We can now focus on our long-term strategic goals.”

Steve Summers, General Manager of Financial Shared Services, TVA

Taking Aim at Project Costs and Outcomes

As part of a major initiative to increase efficiencies by standardizing its enterprise business systems, TVA set its sights on implementing a robust project management and prioritization solution to optimize capital productivity and improve project outcomes.

Standardize Project Management and Prioritization

To fulfill its business requirement, TVA initially considered Oracle’s Project Justification system until it was determined customizations would be required. The project capabilities of Maximo Asset Management were also briefly considered. Then TVA learned that the project portfolio management solution from PowerPlan was widely used and respected in the industry, and the utility’s project team made visits and calls to industry peers, including Southern Company, TECO and Florida Power & Light, to evaluate their experiences with PowerPlan.

Ultimately, TVA chose to replace its legacy systems, spreadsheets and manual processes with the PowerPlan Project Management and Project Prioritization modules. PowerPlan provided all the functionality required, and the solutions allowed TVA to standardize all projects onto a single, centralized system.

Challenge: Reduce Project Costs and Risks

TVA actively manages over $27 billion in Property, Plant and Equipment, spends more than $3 billion per year on capital and O&M projects; and at any point in time, manages approximately 1,000 active projects. A key strategic goal of TVA’s management was to allow more effective management and prioritization of scarce resources through the increase of transparency across the organization.

Although the utility’s legacy project systems provided basic information, they were not necessarily interrelated or timely. Each operating division had its own systems, processes, reports and business requirements, making it difficult to compile information or act strategically on a corporate basis. Actual costs, spending authorizations, budget control and forecasting information were tracked in separate systems and spreadsheets across the organization.

A homegrown repository had been used to perform basic economic evaluations for project justifications, prioritization and capital allocation, but financial metrics were limited and the approvals and analysis were manual and paper-based. The ranking system could not support hard-core decisions because the information was somewhat elemental and untimely – it could take several weeks and multiple personnel to collect and assemble the basic data from the various systems. With more than 1,500 people involved in the process, significant time was spent on checking and re-checking for errors. As such, the data was always backward-looking and untimely – once a project was budgeted, continuous information and metrics on its progress were just as hard to compile and just as dated.

TVA needed better insight into whether it was taking on the right projects, executing them efficiently and receiving the expected benefits. Executive management had tools to monitor the projects but greater speed and efficiency would allow for more timely decisions – and a better use of scarce resources. The utility wanted to gain transparency across the organization and dramatically reduce the effort involved in approving and forecasting projects, regardless of the nature of the project. The new system had to be scalable to support more than 1,500 personnel, including project managers, system engineers, approvers, reporters, business and financial services staff, governance and audits staff, and the Office of the Inspector General.

Finally, the new solution also had to integrate with existing ERP (Oracle) and EAM (Maximo by IBM) systems.

Critical Requirements:

• Centralize visibility into all capital and O&M projects
• Reduce project risks through automation and efficiencies
• Improve and accelerate project ranking and budget allocation decisions on a continuous basis instead of once a year during the budget cycle
• Scale to support a 1,500+ user base
• Integrate with the existing Oracle and Maximo systems

“Without a doubt, there are process savings now that our projects are centrally managed with PowerPlan, and the process is more disciplined. We originally looked at Oracle, but it did not have the project functionality we required.”

Project Manager, TVA

Solid Savings and Operational Efficiencies Result

The PowerPlan implementation at TVA produced solid financial and operational benefits immediately. Cost efficiencies resulted from having more timely project actuals and comprehensive forecasts on a real-time basis. Automated alerts and dashboards provide management with continuous feedback on projects facing time and cost risks so that the appropriate response can be given.

The complete lifecycle of every capital and large O&M project, from scratchpad through closeout, is now tracked and managed in a single system. Projects may be estimated in any manner but are ultimately imported or entered into the PowerPlan solution in order to align operational project processes with corporate business processes through an automated ranking and approval procedure. This allows the operations and finance organizations to interact in a controlled, normalized way, using the same electronic data rather than paper forms. In addition, projects initiated and approved in PowerPlan are automatically interfaced and set up in Oracle. As actuals and commitments in Maximo flow over, the total financial picture of each project, and all projects, is always readily available.

Automated project dashboards, queries and reports make accessing information for executive decisions virtually instantaneous. The ability to centrally evaluate project performance, track benefits and capture lessons learned allows new project forecasts and benefit estimates to be knowledge-based and meaningful. Economic evaluations and prioritization for capital allocations are much more standardized, and because ultimate project results are tracked across project types, quality information forms the basis for the next generation of projects. Automation and controls ensure data integrity and completeness. Internal controls ensure that actual spending authorizations are automatically connected to the financial system, instead of being manually linked. Approval workflows are automated, offering transparency into the approval timeframes and approvers so that projects cannot be lost or overlooked. And system standardization, automation and process controls improve the ability to comply with Sarbanes- Oxley Act and other requirements.

Enterprise-wide visibility increases the knowledge base from which to make executive decisions. Having transparency across the operating units and a standard platform from which to compare competing projects enhances investment decisions across disparate projects competing for scarce resources, e.g. between new transmission lines, fossil boilers, and IT project proposals.

“The PowerPlan team was the best I’ve seen in terms of IT project implementations. They are uncommonly hard workers, easy to work with, and their level of expertise is very high.”

Project Manager, TVA

Objectives Achieved — Minimum $61 Million Saved

With the integrated PowerPlan solutions, TVA is benefiting from efficient and robust project prioritization, tracking and management capabilities, and reaping substantial cost and time savings and qualitative benefits. TVA quickly identified $61 million in documented value through the enhanced project cost tracking in the first few months of usage alone. The utility now has uniform visibility into its entire project portfolio, allowing timely and informed project selection, ranking and budgeting decisions, responsive mid-course corrections, better control of project outcomes and the alignment of future projects based on past performance.

Business Benefits

• Cost Efficiencies
• Lifecycle Management
• Informed Decisions
• Labor Efficiencies
• Automation and Controls