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Standards, Policies and Guidelines – ICT Strategic Plan Guideline

TABLE OF CONTENTS

1. ACKNOWLEDGEMENT 4

1.1 Introduction 7

1.2 Objective 7

1.3 Scope 8

2. ICT STRATEGIC PLAN OVERVIEW 9

2.1 Why do we need an ICT Strategic Plan 9

2.1.2 Our Approach 12

3.Stage 1:Analyses Business Environment 13

3.1.1 Corporate Profile 13

3.1.2 Scope 13

3.1.3 Current Market 15

3.2 Develop Agency Overview 15

3.2.1 TNB Vision 16

3.2.2 TNB Mission 16

3.2.3 Business Objectives 16

3.2.4 Main Business Activities 16

3.2.5 Identify agency’s business objectives (corporate and functional) 17

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3.2.6 Understand agency roles and responsibilities 17

3.2.7 Identify agency’s supplier and customers 20

3.2.8 Identify agency’s strengths and weaknesses 23

3. 2.9 Understand agency visioning and mission statement 24

3.3 Understand the strategic vision and mission of agency 24

3.3.1 Review of Current Business Environment

3.3.2 Corporate strategy 26

3.3.3 Develop an understanding of corporate strategies 27

3.4 Identify corporate business strategies 27

3.4.1 Develop the-cut vision of opportunities and directions 28

3.4.2 Determine issues, assumptions and constraints 28

Definition

3.5 Determine agency value chain 29

3.5.1 Identify Areas of Potential Strategic Advantage 32

3.5.2 Understand current business trends 33

4.Stage 2: Analyze ICT Environment 34

4.1.Perform high-level current ICT environment 35

4.1.1Establish relationship with system and related departments information 36

4.1.4 Assess strategy 38

4.1.5 IT policy (ITP) 42

4.1.6 Asses organization and management 44

4.1.7 Assess application and data 45

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4.1.8 Assess technology infrastructure 46

4.1.9 Assess service delivery 47

4.1.10 Recommend Short Term Actions 57

5 . Stage 3: Developing ICT Strategy 60

5.1 Develop Technology Strategy 60

5.1.1 Phase 1: Perform ICT Assessment 61

5.1.2 Task J: review agency’s current CT strategy, plans and budgets 62

5.1.3Identify Technology Trends

5.1.4Define Principles for developing technology strategies 63

5.1.5Determine technology requirement 64

5.1.6 Determine target technology architecture 65

5.1.7Develop ICT Governance Framework 68

5.1.8Compile the ICT governance framework 68

6.Stage 4: Develop Implementation Plan 68

6.1 TNB’s main concerns on planning 68

6.1.1Drivers for developing TNB’s smart grid 69

6.1.2TNB’s Smart Grid Project 69

6.1.3TNB Smart Grid Development Phase 70

Phase 1 TNB smart grid test system: Improving reliability of supply via automation

Phase 2 TNB smart grid test system: Empowering Customers

Phase 2 TNB smart grid test system: Improve Energy & Network Efficiency

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Phase 3 TNB smart grid test system: Reducing CO2 emission via renewable energy

7.Conclusion 78

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ACKNOWLEDGEMENT

Bismillahirahmanirrahim,

In the Name of Allah Most Gracious, Most Merciful.

First of all, we are grateful to Allah for allowing us to write and complete this report on our final

project. Many individuals helped us by providing valuable information and assistance leading to

this report completion. Thanks to our lecturer Madame Nik Nordiana Nik Abdul Rahman for the

guidance and his dedication in striving to educate us. He inspires us to do our best.

The study was done in an organization or a TNB also had the experience of all our means

together with the staff of the company to collect the desired data. Assistance given by TNB staff

is greatly appreciated for wanting to take the time to be interviewed. Without their permission,

this project would be a failure. Their contribution is inspiring.

Thank you.

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PROJECT DIRECTOR & PROJECT MANAGER

WORKING COMMITTEE

6

NORHAYATI SHARIF

(PROJECT NETWORK)

MOHAMMAD ALI ALI

(PROJECT MANAGER)

MADAME NIK NORDIANA NIK ABDUL RAHMAN

(PROJECT DIRECTOR)

PARTICIA BILONG

(PROJECT NETWORK)

M.ZIRA HIJAN

(PROJECT ANALYST)

MOHAMMAD ALI ALI

(PROJECT MANAGER)


ROLES AND RESPONSIBILITIES

Every team members are important in a particular group. The best group is the

group that has a good Project Manager and responsibilities team members. By

making the group success the important thing is communication which it gives

more understanding between team members to work in peace. What is vital is that

these needs are recognized and explicitly dealt with by the group. Management

must allocate time and resources to this by the group and the group process must

be planned, monitored and reviewed just like any other managed process. Most of

all, Project Manager will always follow up with Madame Nik Nordiana Nik

Abdul Rahman as project directories to monitor and supervised of every risks that

to be arise.

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1.1 INTRODUCTION

This paper is the result of our group’s research on the company that we have selected, namely

Tenaga Nasional Berhad, located at Kuala Selangor. We conducted a study that involves the

company’s core business process; corporate strategies and also the ICT infrastructure are among

the areas that we studied. Thus the result is to come up with an outcome or proposal for a

solution to help enhance TNB’s current ICT.

1.2 OBJECTIVE

The main objective of this paper is to provide a detailed report regarding the tasks and activities

involved in the ICT Strategic Plan for TNB. In the later chapters we will be discussing on the

four (4) stages in ICT strategic planning that is:

Stage 1: Analyze business environment

Stage 2: Analyze ICT environment

Stage 3: Develop ICT strategy

Stage 4: Develop implementation plan

The main outcome of all this writing would be the development of an ICT strategic planning to

be implemented to TNB.

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1.3 SCOPE

This ICT strategic plan is considered a blueprint for TNB for the use of ICT, which is both, cost

effective and aligned with prioritized management and operational needs. This plan would

eventually lead to the identification of strategic initiatives either new or currently being used.

The ICT strategic plan consists of several elements that is in the scope:

Business alignment

o Establishing a communication path, shared understanding technology and

business domains, and to some extent, integrating the business and ICT planning

process.

o Assessing the ICT impact of business imperatives.

Vision

o Establishing the broad targets and ‘products’ set for ICT delivery for today and

several years ahead.

Allocation & Value

o Understanding the value of current spending and ICT resource allocation

o Adjusting the expenditure according to business priorities.

Enabling

o Identifying areas to apply emerging technologies and trends that have the

potential for competitive differentiation or operational benefit.

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Governing & Capabilities

o Instituting the proper sourcing and responsibilities of ICT delivered products to

manage across the organizational/ICT boundaries.

o Identifying competencies necessary for delivery.

Action & Measurement

o Creating the valuation model and prioritized imitative portfolio to drive

downstream effort and execution

2.ICT STRATEGIC PLAN OVERVIEW

2.1. Why We Need an ICT Strategic Plan

An ICT strategic plan will address the alignment between strategic operational requirements

of an agency enterprise and the planned and economically justified application of technology

assets. This alignment is best achieved when ICT has been deployed as an enabler of one or

more cross-functional business process. The basic interplay between the business strategy

area of expertise and the ICT strategy area of expertise is the dynamic between business

“requirement push” and “technology pull”.

The “requirement push” is the direct specification of information and processing needs by the

business. However, true competitive advantages are often gained through “technology pull”.

This occurs when the business is made aware of opportunities through insight and

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understanding of the capabilities of technology. Without this insight there may be no

customer self-service, costly information exchange, and a disadvantage in establishing e-

business and e-commerce.

In summary, the ICT strategic plan will help TNB to:

o Apply ICT creatively in order to obtain competitive advantage and support business

strategy.

o Ensure ICT investments are cost-effective.

o Control ICT expenditures.

o Protect existing ICT investments.

o Resolve conflicting demands for limited ICT resources.

o Obtain joint ICT management.

o Avoid ICT ad-hoc projects.

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2.1.2 Our Approach

Analyze Business Environment (Why?)

o

Analyze ICT environment (what?)

Develop ICT strategy (How?)

Dev. Implementation plan (when?)

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Develop agency overview

Review current biz environment

Identify area of strategic

advantage

Perform ICT assessment

Recommend short-term action

Identify ICT opportunities

Develop technology

strategy

Dev. ICT governance framework

Define target applications

Dev. ICT implementation

road map

Estimate financial implications


3.Stage 1: Analyses Business Environment

3.1 Corporate Profile

Powering the nation for over a decade, Tenaga Nasional Berhad (TNB) is the largest electricity

utility company in Malaysia with estimated RM71.4 billion worth in assets. Committed to

providing service excellence, the Company is listed on the main board of Bursa Malaysia and

employs approximately 28,000 staff to serve a customer base of over seven million in Peninsular

Malaysia & Sabah. Today, TNB continues to lead the effort in fostering economic growth &

social development in the country.

Recognised for its outstanding performance, regionally & globally, TNB's core businesses

comprises of generation, transmission & distribution of electricity. With a total installed

generation capacity of about 12,000 MW (including SESB & Kapar Energy Ventures), TNB is

trusted for delivering reliable & efficient products & services. In Peninsular Malaysia, TNB

contributes to 55 per cent of the total industry capacity through six thermal stations & three

major hydroelectric schemes. In addition, TNB manages & operates the National Grid, a

comprehensive transmission network that is also interconnected to Thailand & Singapore.

Meanwhile, employees' competencies are continuously enhanced through structured programmes

to ensure topmost proficiency, earning TNB remarkable reputation; TNB is ranked 100 from a

list of 250 power companies worldwide for the "Power Company of the Year" in the 2008 Platts

Global Energy Awards. In addition, TNB was also the proud winner for The Prime Minister's

Industry Excellence Award for 2007. This annual national quality award is given to organisations

in the private sector in recognition for their excellent achievement in quality management.

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Passionate at what we do, TNB through its subsidiaries, has been successful in other diversified

activities, which include manufacturing transformers, high-voltage switchgears & cables as well

as in the provision of professional consultancy services.

In TNB, they believe that educating & inspiring leaders is fundamental in achieving a brighter

future; hence, Universiti Tenaga Nasional (UNITEN) is aimed at producing outstanding

individuals in various fields. A major part of the Company's corporate social responsibility in

education, sponsorships and contributions, is channeled through the trust foundation – Yayasan

Tenaga Nasional.

As a responsible corporate citizen, TNB also places great emphasis on its engagement with the

community to ensure society gains and benefits from their efforts.

3.1.2 Scope

Provides key company information for business intelligence needs.

The company’s strengths and weaknesses and areas of development or decline are

analyzed. Financial, strategic and operational factors are considered.

The opportunities open to the company are considered and its growth potential assessed.

Competitive or technological threats are highlighted.

The report contains critical company information - business structure and operations, the

company history, major products and services, key competitors, key employees and

executive biographies, different locations and important subsidiaries.

The report provides detailed financial ratios for the past five years as well as interim

ratios for the last four quarters.

Financial ratios include profitability, margins and returns, liquidity and leverage,

financial position and efficiency ratios.

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3.1.3 Current Market

Tenaga Nasional Berhad provided earnings guidance for the year of fiscal 2011. The company

expects coal prices for the current fiscal year to average more than $100/mt. As under the current

tariff it is only covered up to $85/mt, rising coal prices are expected to weigh down operating

margins. The company has warned the current year would be 'very challenging'.

3.2 Develop Agency Overview

3.2.1 TNB Vision

“To Be Among the Leading Corporations in Energy and Related Businesses Globally”

3.2.2 TNB Mission

“We Are Committed to Excellence in Our Products and Services”

3.2.3 Business Objectives

To learn more about how ICT can help the business in TNB.

To expand the technology of information systems refers to planning how to develop

them.

To analyze the business of the organization.

Client Charter

To set up a dynamic and progressive regulatory system that encourages the development of the

electricity and gas industry.

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To carry out ongoing services, electricity and gas supply regulatory that protects the

consumers interest.

To carry out effective legal enforcement.

To provide efficient and gracious regulatory services through registration, licensing,

permit/certificate approval and endorsement letter processing procedures.

3.2.4 Main Business Activities

Core Business

Generation Division

Entrusted to develop, operate and maintain TNB’s portfolio of power generating units.

This division has thermal generation assets and major hydro-generation schemes in

Peninsula Malaysia one IPP operating in Pakistan.

Transmission Division

Manages and operates the 132 kV, 275 kV and 500 kV transmission network of TNB

known as the National Grid. Main activities of include strategy formulation, system

planning, engineering, project management, control operations, maintenance, way leave

management and more.

Distribution Division

Entrusted to conduct two value chain business activities on behalf of TNB – Distribution

Network Operations & Electricity Retail Operations.

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3.2.5 Identify agency’s business objectives ( corporate and functional )

Corporate in CARE Program

Corporate Account Relationship Enhancement Programme, also known as CARE

programme, was initiated by TNB’s Customer Service & Marketing Department since 1

December 2007. The programme is targeted to form better relationship with TNB’s corporate

clients.

CARE programme adopts the ‘single point of contact’ concept where a dedicated executive is

appointed to manage the corporate accounts. The 8 segments of corporate customers currently

identified to be under the CARE programme are as follows:

1. Banking

2. Retail

3. Utilities

4. Fast Food Chain

5. Telecommunications

6. Hotels

7. Transport

8. Petroleum

Objectives of the CARE Programme

To create a closer two-way relationship between TNB and the corporate clients for better

customer experience.

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To maintain customer’s loyalty with TNB through the continuous effort that focuses on

quality customer service characteristics such as reliability, assurance and responsive

personalized service.

To gain feedback from corporate on TNB’s services, to monitor and to take effective

action in order to fulfill the clients needs.

To promote and educate clients on their convenient services e.g. TNB’s Bulk Payment

System.

Functional in CARE Program

Designing a successful exhibition stand involved more than just aesthetically pleasing to the eye.

The functional while maintaining the clients corporate image and ultimately achieving the end

objective.

Their needs analysis has produced numerous creative and often original custom-made designs

which in return the expertise towards the work. It is also enhances the company capability to

handle project of different standards, from medium to international scale. The professionalism

and dedication in their work has a high rating of success in the past ventures.

3.2.6 Understand agency roles and responsibilities

What the Developer should do

1. Submit application form with the relevant documents required by TNB.

2. Sign SLA with TNB (provided all documents are in order).

3. Pay connection charges upon notification from TNB within agreed timeframe.

4. Substation to be build and completed 4 months prior to electricity supply ready for

connection.

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What TNB should do

1. Sign SLA with developer.

2. Issue Notice of Connection Charges within 2 months after SLA Agreement is signed.

3. Commence works no later 4 months prior to electricity supply ready for connection.

Cos-The cost incurred is only the stamp duty. The Agreement should be stamped after execution

by both parties and each party should bear its own stamp duty, currently at RM10 per copy.

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Document the executive management view of the agent

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3.2.7 Identify agency’s supplier and customers

Supplier

Managing the Supply Chain effectively has become ever more critical in today’s very

competitive marketplace. For more than 60 years, TNB has been powering the nation's progress

and recognizes that success in this endeavor is supported by a strong supplier base. Without

strong supplier relationships, especially in these challenging times, neither party will succeed.

By working together, TNB and its suppliers can both continue to grow in the future. Thus, we

believe it is critical that our suppliers and contractors have a thorough understanding both of our

business and our expectations of their performance.

South Africa is among the source of new coal supply for Tenaga Nasional Bhd to ease the

current shortage, following the floods in Queensland, Australia.

Queensland has served as TNB’s traditional supply market.

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Client

Malaysia

Amoco Chemical (M) Sdn. Bhd.

Asean Bintulu Fertilizer (ABF) Sdn. Bhd.

BASF (M) Sdn. Bhd.

Central Sugars Refinery Sdn. Bhd.

Conoco Malaysia Sdn. Bhd.

CUF Karteh, Teknik Janakuasa Sdn. Bhd.

Eastman Chemical (M) Sdn. Bhd.

Ethylene / Polyethylene (M) Sdn. Bhd.

Gas District Cooling (M) Sdn. Bhd.

Malaysia LNG Tiga Sdn. Bhd.

Malaysia Newsprint Industries Sdn. Bhd.

Malaysia Shipyard & Engineering Sdn. Bhd.

MMC Oil & Gas Engineering Sdn. Bhd.

Negeri Sembilan Cement Ind.

Nippon Oil Exploration (M)Ltd.

Optimal Chemicals (M) Sdn. Bhd.

PETRONAS Ammonia Sdn. Bhd.

PETRONAS Carigali Sdn. Bhd. KLCC, Miri, Sabah, Terengganu, Kerteh.

PETRONAS Methonal (Labuan) Sdn. Bhd.

PETRONAS Penapisan (Melaka) Sdn. Bhd.

PETRONAS Penapisan (Terengganu) Sdn. Bhd.

PETRONAS Penapisan (Melaka) Sdn. Bhd.

PETRONAS Penapisan (Terengganu) Sdn. Bhd.

PETRONAS Research & Scientific Services.

Sabah Shell Petroleum Sdn. Bhd.

Tenaga Nasional Berhad Generation (TNB) Sdn. Bhd. JOR, Paka, Serdang, Tunku Jaafar

PD.

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YTL Power Services Sdn. Bhd.

UAE

ABU DHABI Gas Liquefaction Company (ADGAS).

DUBAI Natural Gas Co Ltd (DUGAS).

WOOD Group Middle East Ltd.

MJB International Ltd.

ABU DHABI National Oil Company (ADNOC).

Saudi Arabia

GAS ARABIAN Services LLC.

SAUDI Petrochemical Company (SADAF).

SAUDI Arabian Fertilizer Co (SAFCO).

Qatar

QATAR Gas LNG WLL.

QATAR Chemical Company Ltd (QCHEM).

QATAR Petroleum WLL.

PETROSERV Limited Ltd.

Bahrain

Bahrain Petroleum International Co (BPIC).

Oman

Oman LNG.

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Indonesia

PT Pertamina.

PT Vico Indonesia.

PE Indonesia Power.

PE Drupadi Agung Lestari.

PE Taekyung Jaya Indonesia.

3.2.8 Identify agency’s strengths and weaknesses

Strengths

Currently, the TNB Group has a complete power supply system, including the National

Grid which is energized at 132, 275 and 500 kV. The National Grid is linked via 132 kV

HVAC and 300 kV HVDC interconnection to Thailand and 230 kV cables to Singapore.

TNB, through its subsidiaries, is also involved in the manufacturing of transformer, high

voltage switchgears and cables the provider of professional consultancy services,

architectural, civil and electrical engineering works and services, repair and maintenance

services and fuel undertakes research and development, property development, and

project management services.

TNB also offers higher education through its university – University Tenaga Nasional

(uniten).

Weaknesses

However, TNB posted an increase in operating expenses by 7.0 percent to RM 7.599

billion, mainly due to an increase in fuel cost as a result of higher coal prices.

It means TNB expense depends on the fuel price. Higher price of fuel mean that coal

price is rising and will affect their expense.

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3.2.9 Understand agency visioning and mission statement

To ensure the Company’s continued service excellence and to support its strategic vision of

global leadership, employee competencies are continuously enhanced through structured

programmes. As a responsible corporate citizen, TNB places great emphasis on undertaking CSR

best practices that positively impact all its stakeholders as well as the environment in which it

operates, in line with the nation-building agenda. Under the PINTAR Programme, TNB has

adopted 24 schools nationwide and implemented various PINTAR activities, the most significant

being the ‘TNB Thunderbolt Hockey Clinic’ that gives primary students the opportunity to hone

their skills in the fast-paced sport.

3.3 Understand the strategic vision and mission of agency

Strategic positioning

This company profile is a premium company information product offering an unmatched depth

and breadth of content. It analyzes the strategic positioning of the company – how the company

has evolved and how it has been performing over the years.

Structure of the organization, partnerships, mergers & acquisitions and recent

developments have been examined.

Business segments of the company have been explored along with analysis of key

products and services.

Competitive positioning of the company has been evaluated in terms of sales,

profitability and stock performance, as compared to its competitors.

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Timeline

Typical time frame for connection of supply within 18months

ICT Implications

As the country's biggest energy provider, Tenaga Nasional Berhad (TNB) spends millions of

ringgit in information and communications technology (ICT) solutions to support its business

requirements.

Looking at the size of its ICT implementation and to ensure that its staff can benefit fully from

technology, TNB is taking training very seriously, especially in ICT.

In the enterprise resource planning (ERP) space alone, the company has spent a total of RM32

million on ERP solutions from SAP, with RM6.2 million on licences, which is now used by

5,200 of its staff throughout the country.

Identify agency targets

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The recent run up on the share price is hardly surprising, notwithstanding the fact that it is one of

the top laggards. Fundamental issues that are seen as main drivers for the share price are:

A much improved demand growth

An upside surprise in forex gains

Relatively low foreign shareholding

3.3.1 Review of Current Business Environment

3.3.2 Corporate strategy

TNB believes that education can turn dreams into realities. TNB has a very strong tradition in

producing world-class scholars and researchers through its education and scholarship

programmes. Many of the current business leaders in the country are TNB scholars and have

enjoyed the education provided by the Company under its scholarship programmes.

Over the years, TNB has strengthened this role and is now actively involved in not only

providing scholarships, but also in providing education through Universiti Tenaga Nasional

(UNITEN) and Institut Latihan Sultan Ahmad Shah (ILSAS).

As an institute of higher learning, UNITEN has an immense and important responsibility in

helping the Government produce well rounded individuals. The University also gives primary

focus on research and development activities which encourage and develop the culture of

innovation and competition among the academic staff as well as its students. Strategic

cooperation between UNITEN and the industrial sector provides access and opportunities for

students and academic staff to master knowledge as well as scientific and technical expertise that

are relevant with industrial and market place needs.

3.3.3 Develop an understanding of corporate strategies

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3.4 Identify corporate business strategies

Marketing Strategy

TNB Consulting Group understands that even the most brilliantly developed program, initiative,

or strategy cannot stand on its own. Key to a successful execution is a professionally integrated

plan driven by stakeholder input. TNB has found that to create the image and brand desired from

both a personal or company perspective, there may need to be an integration of a variety of

venues to create IMPACT (Integrating Marketing Programs and Communication Techniques).

Resource Strategy

The federation of Malaysian Manufactures (FMM) strongly supports the Governments move to

review TNB and the Independent Power Producers (IPPs) tie-ups. The Government initiative to

introduce an alternative electricity pricing mechanism in the form of a power exchange to

circumvent tariff increase is timely and commendable. These strategies should be undertaken

first before considering an increase in electricity tariff rates.

3.4.1 Develop the-cut vision of opportunities and directions

Establish criteria for decision-making

Policies and procedures

Rules and regulations have been established for guidance and compliance by all

suppliers/contractors. Penalties established for violations of the said rules and regulations are not

meant to be punitive but corrective.

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TNB shall take the appropriate measures against all erring suppliers in order to keep the integrity

of its purchasing system and to maintain a pool of competent suppliers/contractors.

3.4.2 Determine issues, assumptions and constraints

Prime Program

Background

This program is intended to improve the quality of TNB customer services for consumers who

contribute millions of ringgit as their monthly electricity consumption.

With an aim to promote good bilateral relationship between consumers and TNB, it is a program

where users are encouraged to interact directly with TNB for any problems or issues faced.

The focus of this program has been developed further, not only for business connections but also

to address power quality issues, which is a common issue amongst TNB PRIME customers.

Definition

PRIME customers are those who are listed in the Top 1000 Large Power Consumers (LPC)

throughout the country.

Activity

Among the activities carried out under the Prime Programme are as follow:

Special programmes are developed from time to time and announced via email for

effective dissemination of information.

Regular visits to PRIME customers' premises by TNB State General Manager, Site

Manager and Branch Manager

Annual dialogue session conducted to foster better relationship between TNB with

PRIME customers and for TNB to better understand local issues and problems faced for

appropriate action

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3.5 Determine agency value chain

Value Chain Analysis

Value Chain Analysis describes the activities that take place in a business and relates them to an

analysis of the competitive strength of the business. Influential work by Michael Porter

suggested that the activities of a business could be grouped under two headings:

Primary Activities - those that are directly concerned with creating and delivering a

product (e.g. TNB provide electrical service and component assembly)

Support Activities - which whilst they are not directly involved in production, may increase

effectiveness or efficiency (e.g. human resource management). It is rare for a business to

undertake all primary and support activities.

The primary value chain activities are:

Primary Activity Description

Inbound logistics All those activities concerned with receiving and storing externally

sourced materials

Operations The manufacture of products and services - the way in which

resource inputs (e.g. materials) are converted to outputs (e.g. products)

Outbound logistics All those activities associated with getting finished goods and services

to buyers

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Marketing and sales Essentially an information activity - informing buyers and consumers

about products and services (benefits, use, price etc.)

Service All those activities associated with maintaining product performance

after the product has been sold

These primary activities are supported by:

Secondary Activity Description

Procurement Purchasing inputs such as materials, supplies and equipment.

Human Resource

Management

Employee recruiting, hiring, training, development and compensation.

Technology

Development

Technologies to support value-creating activities.

Infrastructure Organizational structure, control systems, company culture, etc.

Steps in Value Chain

Analysis Value chain analysis can be broken down into a three sequential steps:

1) Break down a market/organization into its key activities under each of the major headings

in the model.

2) Assess the potential for adding value via cost advantage or differentiation, or identify

current activities where a business appears to be at a competitive disadvantage.

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3) Determine strategies built around focusing on activities where competitive advantage can

be sustained.

Cost advantage and Differentiation in Value Chain Analysis

The value chain model is a useful analysis tool for defining a firm’s core competencies and the

activities in which it can pursue a competitive advantage as follows:

Cost advantage: by better understanding costs and squeezing them out of the value-

adding activities.

Differentiation: by focusing on those activities associated with core competencies and

capabilities in order to perform them better then do competitors.

Technology and the Value Chain

Various technologies are used in both primary value activities and support activities:

Inbound Logistics Technologies

Transportation

Material handling

Operations Technologies

Process

Materials

Outbound Logistics Technologies

Packaging

Communication

Marketing & Sales Technologies

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Media

Audio/video

Service Technologies

Testing

Communications

Outsourcing Value Chain Activities

To decide which activities to outsource, managers must understand the infrastructure strengths

and weaknesses in each activity. Managers may consider the following when selecting activities

to outsource:

Whether the activity can be performed cheaper or better by suppliers.

Whether the activity is one of the infrastructure core competencies from which steams a cost

advantage or product differentiation.

Example:

In TNB, managers need to know all about the activities of the organization to ensure that all

management can be performed easily and regularly. With this, all parties work together and

communicate to run their business with ease and have a good business relationship.

3.5.1 Identify Areas of Potential Strategic Advantage

3.5.2 Understand current business trends

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Emerging Markets Direct (EMD) released their latest Malaysia Electricity Industry Report. The

electricity, gas and water industry in Malaysia contributed approximately RM17.71 billion

(2.61%) to the country's total GDP in 2009. Over the years, the annual growth rate of Malaysia

electricity generation has declined.

Malaysia electricity market was affected by the global economic downturn and thus a slowdown

in the domestic market activity particularly in the first six months of 2009. In this regard,

total electricity sales saw a decrease of 1.35% in 2009. Talking about electric generation

capacity, Malaysia had a capacity of 21,817MW, which marked an increase of 10.6% as

compared with 2008. The electricity generation in the Peninsular Malaysia was approximately

89.53% of the country's total electricity generation in 2008. Sarawak and Sabah, the minority

electricity generators, accounted for 6.06% and 4.41 % of the total electricity generation

respectively.

Owing to the escalating gas and coal prices, the Malaysian government announced the

restructuring of electricity tariff in which less than half of the domestic households would be

affected by the new tariffs as long as they maintain their usage rates. In less than one year time,

the Malaysian government revised the tariff plan again to reflect the changes in fuel prices and

support the government's efforts to introduce economic stimulus package.

4.Stage 2 : Analyze ICT Environment

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http://www.articlesnatch.com/Article/Malaysia-Electricity-Industry-overview-trends-prospects-And-Swot-Analysis-/2090620

http://www.articlesnatch.com/Article/Malaysia-Electricity-Industry-overview-trends-prospects-And-Swot-Analysis-/2090620


Information management is critical to ensure that data is easily stored, processed

and systematically achieved. To ensure that information management can be more effective,

Tenaga Nasional Berhad (TNB) has used a number of information systems to facilitate

management. This information system consists of standalone and online information systems.

This information system consists of an information system involving its own employees,

suppliers and consumers.

Information system is a combination of institutional resources, hardware,

software, network communications and data collection, exchange and disseminates information

in an organization. A computer-based information system (CBIS) is divided into several types of

Transaction Information Systems, Management Information Systems, Decision Support Systems,

Executive Information Systems, Office Automation Systems and Expert Systems.

The use of ICT (Information and Communication Technology) in the

management of the organization to assist in managing the organization effectively. Effective

management information system is critical to ensure the smooth management of all information.

Information management involves many parties such as staff, suppliers and consumers. Effective

information management will facilitate the administrative management.

Our group has chosen an organization Tenaga Nasional Berhad, located at Kuala

Selangor, to get information about the study of analyzed ICT environment in the organization.

Collection of this information has been assisted by a staff of companies involved in the

management of information systems in the organization.

4.1.1Perform ICT assessment

35


Among the list of information systems used in TNB, our group has agreed to

choose Consumer Services System (FDS) or known as eCIBS (Enhanced Customer

Information Billing System) as an information system studied in greater depth of

functionality, integration with information systems others in the organization and the

benefits of the information system. We chose the Consumer Services System (FDS) is

because this system involves internal employees and consumers.

Objective (mission) at TNB’s eCIBS (Enhanced Customer Information Billing System)

Good and important systems in the organization of TNB.

To provide staff can check the user's account through the system using the

identity card number or set number of users.

To provide facilities to receive any complaints about the services provided

both from individual users, the press and also from the leaders.

Providing electricity bill payment service facility at the counter and online

payments (Is a system operated on-line (online).

Easy to calculation of the total bill paid by users, giving a rebate of 5% at the

end of the year, the event of any of the rates of the meter reader, or one

calculation in terms of the bill to be paid, the system will debit or credit the

consumer bill of the month the next.

Can receive any complaints relating to services offered.

This system can be accessed at any of the information for all users in

Malaysia.

Not only involve internal users, but also involve external users.

Only employees who have the only password that can change any data that is

required

Counter clerks and credit control clerk can access the system.

36


4.1.2 Integration with Other Information Systems

ECIBS system is not only online system that can be used anywhere by TNB staff, but this system

also has the integration with other systems that have their own interests.

This system has a relationship with the system at the point of payment. When a data entry clerk

payments that the consumer has paid the bills, the system will automatically detect and update

the user's account. With fast and easy access, employees can save time to enter the same data in

different systems.

In addition, this eCIBS system also has relationships with several local banks, namely Maybank

and CIMB bank. An established relationship is to facilitate the users to pay their bills online.

Maybank2U.com has been offering online bill payment service. Thus, the Maybank and TNB

system used has a relationship to an online bill payment can be identified and can update the

accounts of users who pay online. Similarly, the CIMB bank has online bill payment service

using CIMB-clicks. Bill payment will be deducted by the user account in any bank that used to

make payments. The system is also applied TPS (Transaction Processing System).

In addition, eCIBS also have a relationship or link with the national accountants. However, the

national accountants can only be entered only eCIBS and print bills. The national accountants

have no power to change any data in this system. Next the system in relation to the HHC (Hand

Held Computer) which is carried by meter readers TNB employees assigned to read the electric

meter from house to house.

Benefits to the Information Systems Organization

37


-Customer

At the customer has to register and use electricity, CIBS provides a rebate of 5% when the end of

the year from the deposit in cash if the customer does not have arrears of payment every month.

If the calculation of one meter reader or mis-priced, the system will debit or credit back on

consumer bills the following month.

-Organization

Benefits of this system to the organization eCIBS hand, is in terms of saving time for staff to

enter the same data in different systems. With the availability of user data in this eCIBS, other

systems can get the same data by integrating the eCIBS.

In addition, this eCIBS can also help the company in terms of improvements in case of any

problems that occur with the complaints system. All complaints or comments will be evaluated

and taken into consideration so that they can be fixed and will indirectly improve the services

offered to consumers.

4.1.3 Assess strategy

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System Acquisition Process

1994 Customer Application Program Package (CAPP)

Before TNB Kuala Selangor eCIBS system, they used a local system

that was developed by a group of employees of Customer Application

Package Program (CAPP) prior to the year 1994. CAPP is a result of its own

innovation TNB staff who have skills in developing the system. CAPP is one

of the standalone systems.

CAPP said not to have any problems during use. But the problem is that the

CAPP system is not recognized by top management as it is said is not

equivalent to a management system used by the state and the world because

when the business has been affected by vendor from Germany who promote

the so-called system better and better. So, to compete with other countries, the

TNB has purchased from the vendor eCIBS from Germany.

1

1995

Enhanced Customer Information Billing System (eCIBS)

eCIBS first used in 1995. This system imported from Germany. At

first, this system cannot be used in Malaysia as inappropriate. Used in

different ways and also to introduce a system that is different from that

never used the system before. After that, the system has been modified or

upgraded and changed (convert) as appropriate in Malaysia and then can be

used in Malaysia. All data were obtained from the CAPP when combined

(merge) with the relevant parts of CAPP to obtain the desired information.

39


eCIBS uses a serial number as the number of users for which this

number sequentially to each other than with a CAPP number of user

accounts by 12-digit. 4 digits for station identification, the next digit to the

introduction of two districts, two digits for the introduction of the next and

last 4 digits for the location.

So far the use eCIBS until today, this system has not experienced

significant problems as intercepted by hackers and no problems with Y2K.

Common problems are not logged on. But can be solved by the ICT. If there are

any problems in the system cannot be repaired by the ICT, the employee will

make a call to the headquarters of Kuala Lumpur. Workers from the head office to

come and solve the problems faced to finish.

Implementation

eCIBS system the most easy to use in applying for electricity consumers.

Applicants need to complete certain forms to apply. Next the staff will enter data into the

eCIBS. eCIBS will generate the number of users and accounts of the applicant to

applicant. Then the applicant must wait for workers to install cables and electrical

connections to the house next.

40


When has completed one month, there are workers coming from house to house to

calculate the rate of energy use and calculating the amount to be paid by the user. Employees

will take a hand tool known as the Hand Held Computer (HHC). TNB employees will be

pressing numbers at home and take meter readings of electricity rates last. The data obtained will

be stored in the HHC. Next HHC will be processing the data is entered as calculating the amount

of electricity usage for the house, calculate the amount to be paid and print the bills. When

completed, the employee will return to the office and downloads the data stored directly in the

eCIBS. eCIBS will detect and automatically update the user account based on new information

obtained through the HHC.

To calculate the total consumption of large power users such as factories, TNB

workers does not go to the factory to bring HHC for fear dangerous, but using a more efficient

system. The system uses satellites to determine the rate of energy use in factories. Once the rates

of use, data will continue to enter the eCIBS. This occurs because the presence of eCIBS

integration with satellite communications systems. This integration allows eCIBS know the data

user with the distance.

HELD HAND COMPUTER (HHC)

41


4.1.4 IT policy (ITP)

IT Policy applicable to all TNB employees

The Dos and DON’Ts.

42


TNB I.T. Policy covers:

Assets Classification and Control

IT Security

Physical Access & Environmental Control

Server Management

Network Management

System Access Control

Password Policy

Internet Access

Software License

Electronic Mail (e-Mail)

Application Development & Production

Disaster Recovery Planning

4.1.5 Acceptable use policy (AUP)

Under the AUP, all employees are PROHIBITED from:

Unauthorized distribution or sharing or revealing of company’s confidential

information of any kind to third parties.

Sending or forwarding spam, hoax, or chain emails or submitting company email

address to third parties (e.g. online contest, or survey) without authorization.

4.1.6 Assess organization and management

- TNB Organization Chart

43


44


45


4.1.7 Assess application and data

The following figure shows some examples of applications within TNB’s business life-cycle.

46


4.1.8 Assess technology infrastructure at TNB

47

WirelessSMS

VoicePABX/IVR/CTI/ACD

Mail/ Fax/ Email

WebeServices /

PortalTNB

CUSTOMER INTERACTION PLATFORMS

SMP

TOMS

TNB Contact Centre

Internet

PRIME

IntranetCUSTOMER INTERACTION CHANNELS


4.1.9 Assess service delivery

TNB branches and service centers

Alor Setar, Sg Petani, Kulim

Penang, Prai, Juru

Taiping, Ipoh

Rawang, Sg Choh, Glenmarie, Shah Alam, Subang Jaya, Klang, Petaling Jaya,

Puchong, Kajang, Sabak, Bernam

Balakong, Cheras, Keramat, Damansara Damai, Kota Damansara, Desa Pandan,

Jln Ipoh, Kepong Putrajaya

Seremban

Melaka

Johor Bharu, Kluang, Muar, Batu Pahat

Kota Bharu

Kuala Terengganu

Kuantan

Kota Kinabalu, Keningau

Kuching

eCIBS Support at TNB

eCIBS help of saving time for staff to enter the same data in different systems.

With the availability of user data in this eCIBS, other systems can get the same

data by integrating the eCIBS.

eCIBS can also help the company in terms of improvements in case of any

problems that occur with the complaints system. All complaints or comments will

48


be evaluated and taken into consideration so that they can be fixed and will

indirectly improve the services offered to consumers.

important in the calculation of the total electrical energy consumption and

computing the total payment to be paid by the customer.

This system can be accessed by any branch but cannot be changed because of this

system, only employees who have only password that can change any data

required. Employees can access as well as counter clerks credit control clerk.

Employees can check through the system user accounts using the identity card

number or set number of users. Among the information stored in this system as a

column number, the collateral given, arrears and more.

This system has received any complaints about the services provided either from

individual users, the press and also from the leaders.

Human Resource Information System (HRIS) at TNB

The staff should be skilled in using the system set so as not to interfere with the daily

business of this company.

each new employee using the system, will be given training and courses use the system.

Staff will also be supplied with the module guide system to be used.

Functions of HRIS section

Updating of employee records

Employee’ data are recorded in the system for payment of salary and reference

purposes.

Training

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HRIS will also provide each new employee using the system, will be given

training and courses use the system.

Staff will also be supplied with the module guide system to be used.

List of TNB System

During the interviews conducted to obtain information about the company's system,

we have obtained a list of systems used by the queries. Here is a list of information systems

used in TNB Kuala Selangor:

Wiring System

Systems Engineering

Administration System (EHRMS)

Financial Management System (ERMS)

Consumer Services System (FDS)

Vehicle System (perfecto)

E-application

CMS – An online Customer Management System to consolidate and improve the

monitoring and handling of all customer service requests and complaints related to ICT

products and services.

SMP – Sistem Maklumbalas Pelanggan (SMP) is a centralized feedback system developed to assist TNB Divisions in monitoring feedback and complaints received via multiple channels from customers.

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CGIS – The Corporate Geospatial Information System (CGIS) is now ongoing, covering the scope of Transmission and Distribution electrical assets, TNB’s fiber optic network, property management, security and logistics. Its objectives are to create the most accessible, coordinated, efficient, advanced and complete company-wide geospatial information system to improve efficiency and reduce operational costs via intelligent geospatial analysis.

Distribution Network Information Management(DNIM)

In eCIBS also, there is a system that works complaint system to receive complaints

from the leaders, customers, and also from the press. Each complaint received either by

email, mail, telephone, or through newspapers will be recorded in the system for

improvement and revision at each end of the year. Staff are responsible for return every

complaint received either emails, letters, phone calls and many more. Usually there are

clerks who will always be aware of any particular complaint online. If there are

complaints, then the clerk will be connecting it to the person responsible for handling the

complaint.

For complaints about the press is, there is a special unit that handles

complaints about this release. This special unit will read and record customer complaints

into the system. This special unit will answer the complaint by the same newspaper. This

system applied the CRM (Customer Relationship Management) in the category of

customer facing applications where customers can interact with the organization either

on-line, phone calls, letters or newspaper. In addition, this system also contains a

Transaction System which acts as follows:

• Customer Service

• Billing and meter

• payment transactions

• Temporary logout

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• Cancellation received

• Closure of the day

• Changing the password

Example: eCIBS Login system

52


53


54


55


56


57


58


59


60


Print Consumer Bills

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4.1.10 Recommend Short Term Actions

We recommend that they enhance or upgrade the current e-business system so that it

can cater or the back-end users. Instead of separating the standalone & online applications,

why not integrate the available programs/web applications into one single streamlined

application system.TNB can implement them in one of their departments internally first, to

observe the effective and efficiency of the new integrated web-based customer application

system.

Example: use Application servers. (The architecture of typical application server)

Application servers provide for application logic sharing and processing,and for connections to

back-end resources. It also provide user interface development mechanisms. In addition, they

usually provide mechanisms to deploy the application to the Web platform.

Databases

Mainframe

Web Server

Third party software and middleware

Firewall

Application platform Core Applications

Internet HTML Intranet Java C++

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Extranet HTML Java

5.Stage 3 : Developing ICT Strategy

5.1. Develop Technology Strategy

The need to perverse and enhance current ICT investments could be a major constraining factor in developing an agency’s ICT strategy. Information about the current ICT environment needs to be gathered and assessed. The objectives of this stage are to:

Identify the agencies current ICT readiness and potential in supporting the government through ICT activities.

Identify the current progress of the initiatives; Perform ICT assessment to measure ICT usage and effectiveness of agency

Information and communication technologies (ICTs) can improve environmental performance and address climate change across the economy. The biggest gains for smarter environmental and economic strategies and applications are in power generation and distribution, buildings and transportation – three areas which contribute to the bulk of greenhouse gases. Further environmental benefits of ICT applications are evident in areas such as water management, biodiversity protection, pollution reduction.

ICT innovation is a key element to spur green growth in the economic crisis and recovery. However, OECD work suggests that most government and business initiatives are still following business-as-usual paths and do not sufficiently tap the sector’s innovation potential.

This stage involves a series of assessment on the current ICT environment that are based on 5 major groups as shown below:

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System Strategy

People Delivery

Technology


Figure 1: The 5 areas of ICT assessment

Strategy: examines what ICT strategies are in place how effectively they support the business and how the business manages and controls ICT.

Delivery: examines how resources are organized, monitored and controlled to deliver ICT services and ICT projects.

People: examines how ICT human resources are organized and managed in ICT and examines the skills and attitudes of users and ICT staff.

Technology: examines hoe technology trends are identified the effectiveness of the technology architecture and how technology is deployed.

System: examines the business functions that are supported by ICT applications the extent of coverage, the gaps that exist in the information provided by these systems and seeks to identify any unsatisfied demand that may exist.

5.1.1 Phase 1: Perform ICT Assessment

An ICT assessment is a process of identifying existing applications, hardware and other technology architecture components that are exist in the ICT environment. The purpose of this phase is to assess the key components of the current ICT environment in determining the ICT capabilities to meet the current and the future needs of the business. This analysis will be key to identifying short term and long-term opportunities to improve the ICT environment and used in the gap analysis and identification of strategic innovative.

There are four aspects of attainment in ICT at key stages 1 and 2:

1. Finding things out

2. Developing ideas and making things happen

3. Exchanging and sharing information

4. Reviewing, modifying and evaluating work as it progresses.

The level descriptions in ICT capability show progression in these four aspects in terms of the

knowledge, skills and understanding set out in the program of study.

Performing ICT assessment requires information gathering from reviewing existing documentation, system investigation and interviewing agency’s staff at management and operational level. Templates should be provided to obtain input from information gathering.

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http://curriculum.qcda.gov.uk/key-stages-1-and-2/subjects/ict/attainmenttarget/index.aspx


Various methods can be used to gather information. One of the possible information gathering techniques is questionnaire. The response can be formed into an application assessment spreadsheet that provides an average for each question in the surveys. These averages are the basis for the analysis. Analysis results to look for patterns in the responses of satisfaction or business and technical issues.

5.1.2 Task J: review agency’s current CT strategy, plans and budgets

Task will be covering the strategy dimension of the assessment. Main activities include:

Understand the ICT and business strategy alignment Understanding policies and guidelines for ICT management and implementation that

have been put in place for agency to operate in an ICT environment Reviewing past year actual budget and actual year forecast budget for ICT infrastructure

and application development Prioritizing strategic initiatives and prepare high-level cost estimates for related projects

for next year and the duration of the project

5.1.3 Identify Technology Trends

Technology Trends

- The continued demands by our customers for quality and effective ICT solutions to

meet their business needs have created the following key challenges to ICT Division:-

Fulfilling customer expectations – It has become increasingly challenging to

develop and manage projects which not only meet customer requirements but are

delivered on time and within budget. Several initiatives which include Strategic

Sourcing, Out-Tasking and standards such as SOA (Service Oriented

Architecture), PMI Framework (Project Management Institute), ITIL (IT

Infrastructure Library), EA (Enterprise Architecture), and implementation of ISO

65


20000 for service delivery are intended to improve the building of quality

applications at a lower cost and in faster completion time.

Implication On Agency’s Environment

- Value creation – To ensure that the systems implemented by the ICT Division are

contributing directly to TNB’s business needs, it is necessary to maintain alignment

with and focus on TNB’s key strategic objectives. This is being enhanced by

initiatives like SCM (Supply Chain Management) and monitored through CMS

(Customer Management System) and EPM (Enterprise Project Management).

- Governance and Security – It is equally important for end-users to abide by TNB’s

policies and guidelines when using ICT’s products and services. To manage this, the

GRC (Governance Risk & Compliance) project is being embarked to improve the

monitoring and control of user access and role management to TNB’s enterprise

systems.

5.1.4 Define Principles for developing technology strategies

Revisit High Level Technology Issue

- Enhancements to TNB’s Digital Telecommunication Network & Teleprotection

System project include replacing old fibre optic cables on transmission lines,

upgrading analog PLC system to new digital system.

- INMS project (Integrated Network Management System) is to integrate several

individual network management systems of the NOC (National Operations Centre)

into a single system

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Implication On Agency’s Environment

- Providing alternative routes to improve the reliability, and improving fiber capacity

and alleviate bottle necks within the existing fiber optics network.

- Provide enhanced equipment, network and service management functions such as

alarm management, fault management, remote configuration, and telecommunication

database management. This will result in improved service availability, better

resource utilization and enhanced customer service.

5.1.5 Determine technology requirement

Identify Technology component determinants

- PLC

- Fiber Optic

- Database

- CPU Unit

- Telecommunication Network

Identify High Level requirement of component

High capacity database to able to handle the required data

Fast telecommunication network

High End CPU Unit

5.1.6 Determine target technology architecture

Consider key business and technical drivers and high-level processing requirements

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- Use the current provider and vendor since it’s only to enhance the current ICT

structure.

Derive high-level technology architecture

- The agency need to make sure that these enhance will integrate with the current

system

- The agency also need to make sure the staff acquired the skill to handle the

enhancement. These can be achieved through training

Formulate Technology Strategies

Consolidate the findings and recommendations

- The agency need to think how to handle the problems of security especially regarding

the cable and also distribution places

- With the current technology, TNB can make use of the PLC and also network

telecommunication to enhance their security not only in the system but also outside of

it.

- TNB just need a little adjustment in the hardware to be able to deal with more things.

Develop ICT Governance Framework

ICT organisation and management issues

Understand the agency’s culture

- Committed to contribute effectively to the business goals and growth of TNB through

value creation, service and efficiency improvement, organisation excellence and

diversification.

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Determine its impact on the ICT strategies

- Efforts in transforming ICT Division to a more customer-centric organisation in

recent years have brought positive benefits to its many customers. Monthly surveys

generated by its Customer Management System (CMS) have shown a consistent score

of over 9.0.

- To delight TNB’s customers, ICT Division had revamped the TNB Corporate

Website that improved communication and engagement with its stakeholders. TNB’s

own Intranet called “Livewire” had been improved to provide greater interactivity

and useful staff-related information.

- The continued upgrading of computing infrastructure and network communication

equipment has resulted in a very reliable and accessible system. Key enterprise

applications such as eCIBS (Customer Information Billing System) and ERMS

(Enterprise Resource Management System) were made available for over 99.9%

throughout the year.

Identify ICT services and skills required

Determine the required management, technical and functional skills and services

- TNB need a skilled management to be able in handling many of their staff

- ICT Department need a knowledgeable and skilful workers to make sure ICT

infrastructure are well maintained.

- A good hardware and software are also needed so that the ICT can function correctly

with the TNB goal

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5.1.7 Develop ICT governance framework

Identify and resolve differences between current and target ICT organisation/ management

• There are less protection in the distribution part and outside properties of TNB

• There is low security measurement to handle from the outside threats of the

agency

• Due to the large scale of organization, TNB are hard to handle for certain aspects

• The amount of customer TNB have is also effect the growth of TNB.

Identify necessary supporting organisation and management practices

• There should be a counter measure for the outside threats such as stolen cables

and also disturbance in TNB distributor.

• The ICT Team should be more alert in handling threats and demand.

• Make collaboration with other parties such as police force to handle the outside

threats

• Adding some security such as webcam that response to threats and also PLC that

can trigger the security or any other parties when there are problems that can

respond and deals with the problem effective and efficiently.

5.1.8 Compile the ICT governance framework

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• TNB can use the technology of PLC that are connected with the security devices that acts as a triggers when there are problems. It will then respond to the Network Telecommunication such as wifi or even broadband that can transfer the data fast and counter measurement of the problems can be taken action immediately.

• It’s important for TNB to have external parties such as police force and security teams.

• It is also important to get a good telecommunication provider so that the information that need to be send or captured are available at all time.

• For this to be work it is also a need for the support of the top management and also governments.

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6.Stage 4: Develop Implementation Plan

What is an Implementation Plan?

An Implementation Plan can be defined as an action plan that determines how to

transform an agency’s strategy into reality. A more simplistic view is to sequence the

ICT opportunities defined earlier and perform necessary analysis to determine the

milestones, timeframe and resources required to implement them.

6.1. TNB’s main concerns on planning

Electricity demand growth continues

- 3.5% for next 10 years

- 2.7% for next 20 years

The local natural gas resources as “clean” fuel is depleting.

It will be replaced by coal, until nuclear option is available in post 2020

There are serious concerns on CO2 e mission, increasing dependency on fossil sources

and lack of RE, EE & DSM and increasing consumer expectations.

There is urgent need to increase operational efficiency i.e. there is need to increase

utilisation of transmission and distribution assets and to reduce system losses

6.1.1 Drivers for developing TNB’s smart grid

Global trends

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Development of smart grid is driven by 4 factors :

- Ageing infrastructure (generation, transmission & distribution systems)

- Energy crisis (energy security & costs)

- Financial crisis (grid reinforcement becomes unaffordable)

- Environmental crisis (green house gaseous)

They occur simultaneously

TNB’s long term strategic plans

TNB’s 25 years Electricity Technology Roadmap (TRM), with a purpose of modernising

electricity supply industry in Malaysia, focuses on 4 main goals:

- Reliable and efficient delivery system

- Intelligent power-delivery systems

- Value-added electricity products and services

- Enhanced environmental management

The actions to go ahead is now.

6.1.2 TNB’s Smart Grid Project

TNB Smart Grid was embarked on November 2009.

TNB has decided to implement Smart Grid Test Systems as demonstration projects.

Three sites have been identified for Smart Grid Test Systems :

– Bayan Lepas (North) : represents industrial area

– Bukit Bintang (Central) : represents commercial centre

– Medini (South) : represents green field area

To drive the implementation of the Smart grid Test Systems, the TNB Smart Grid

Steering Committee was formed.

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6.1.3 TNB Smart Grid Development Phase

Phase 1 (2010-2011)

- Improving operational efficiency via automation

Phase 2 (2011-2013)

- Empowering Customers

- Improving Energy & Network Efficiency

Phase 3 (2011-2015)

- Reducing CO2 via Renewable Energy

Smart grid implementation initiatives

Phase 1 (2010-2011) Phase 2 (2011-2013) Phase 3 (2011-2015

Improve Reliability Increase Customers

Participation

Improve Energy

Efficiency

Reduce CO

• Implementation of

DA at pilot Sites

•Deployment of

DMS modules

•Fault Location,

Isolation &

Restoration (FLIR)

• State Estimator

• Auto Contingency

Analysis

• Auto Feeder

Reconfiguration

(AFR)

•Deployment of

Advanced Metering

Infrastructure (AMI)

• Bidirectional exchange

of usage information

•Improve billing

Accuracy &

Efficiency

•Improve New

Connection Process

• Development of VAR

Control

• Hardware+Software

• Demand Side

Management

• Provide live

information

to customers

• Autonomous Demand

Control

• Implementation of

DA at pilot Sites

•Solar PV

• BIPV

•Energy Storage

• Batteries

•Electric Cars

(PHEV)

•Charging stations

•Solar / LED

Street

Lightings

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• Development of

Integrated

Customer

Information System

• Integration of the

various information

systems e.g. CIBS,

ERMS, CGIS,

MFFA

Phase 1 TNB smart grid test system: Improving reliability of supply via automation.

Features Existing Grid Smart Grid

Power is generated at large

power stations and transmitted

and distributed

via T & D system

Yes Yes

Method of locating fault

Manual Automatic

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Advance ICT Infrastructures

Advanced ICT Infrastructur



Advance ICT Infrastructures





Method of isolation and

sectionalizing of faulty section Manual Automatic

Method of feeder

reconfiguration for optimal

operation

Manual (not

optimized)

Automatic

Method of restoration of supply

after fault is

sectionalized

Manual Automatic

Method of mobilization of field

or repair Crew Manual Automatic

Update database for

management and customer

information system

Manual Automatic

Phase 2 TNB smart grid test system: Empowering Customers

Features Existing Grid Smart Grid

Customer is aware of own

energy consumption in real

time

No Yes

Customer has information for

making decisions on changing

their demand

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pattern (via BEMS) & gain

benefits

Limited Yes

Customers have the capability

to export power from RE

sources back into the grid (on

agreed terms)

No Yes

Phase 2 TNB smart grid test system: Improve Energy & Network Efficiency

Features Current Grid Smart Grid

TNB is ready for demand side

Management No Yes

Automatic voltage and MVAR

control and to reduce No Yes

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distribution system losses

Utility can communicate with

customers energy management

system on

controlling customers demand

pattern

No Yes

Higher utilization of T & D

assets

No Yes

Peak load reduction and

interruptible

load could be operated

smoothly

No Yes

Phase 3 TNB smart grid test system: Reducing CO2 emission via renewable energy.

Features Current Grid Smart Grid

Network is ready for

penetration of renewable

energy sources (solar PV), co-

gen, DER, etc

No Yes

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Network is capable to cater for

bidirectional power flow No Yes

Excess power generated via

RE, BIPV, etc is fully taken &

utilized via the grid

No Yes

Network is capable of meeting

demand of electric cars

(PHEV)

No Yes

Implementation

Six (6) activities / areas have been identified to kick start the phase 1 of Smart Grid Test

Systems

- Planning Studies

- DMS/DA project

- AMI Project

- Communication project

- System Integration

- Online Condition Monitoring

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Prospects for smart partnerships / research opportunities (a non-exhaustive list)

Control architecture

- To evaluate centralized versus de-centralized architecture considering a

nationwide smart grid applications.

ICT infrastructure

- To identify and evaluate options for the last mile communication and information

system and recommend suitable option for smart grid applications.

“Prosumer” interface

- To identify suitable information, communication and control products and

services to enable consumers with greater information and control to play a part in

optimising the operation of the grid system nationwide.

Active grid

- To enable interactivity and coordination between the various level of grid control

(National Control Centre, Distribution Control Centre, Substation Control Centre,

Feeder Control and Prosumer).

7.Conclusion

Growing demand and limited resources while maintaining to be environment friendly

impose severe pressure to TNB in its planning. Smart grid is an option towards a

workable solution.

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TNB has decided to embark on implementation of smart grid test system projects. It will

be carried out in 3 phases (2010~2013) at 3 sites; Bukit Bintang in Kuala Lumpur, Bayan

Lepas in Penang and Medini in Johor.

TNB desires to gain valuable experience from the smart grid test systems so as to lead to

successful implementation of smart grid in other parts of TNB power grid system.

Research are required for some applications in order to ensure only the right technology

is deployed for the purpose.

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