Transforming Asset Management Capabilities at...

Transforming Asset Management Capabilities at Bord Gáis Networks Paul Lennon EGATEC 2011

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Contents

Development of Asset Management Department

Challenges and Benefits

Vision and Scope of the Networks Transformation Programme

Overview of Bord Gáis Networks

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Bord Gáis Networks – Overview

Irish Gas Market Place • Bord Gáis Networks, on behalf of Gaslink, develops, operates and

maintains the Transmission and Distribution network in Republic of Ireland.

• It also owns and operates significant gas pipeline assets in Northern Ireland.

• Owned by the State • Set up in 1977 • Provides gas to ~650,000 gas users • Over 90% gas comes from UK Interconnectors Assets • 2,400km of Transmission Pipelines • 11,000km of Distribution Pipelines • 3 Compressor Stations • 180 AGIs • Asset value approx €2.5 Billion • Total Staff of approx 500

• Reasons for Transformation Programme • Emerging from period of rapid network expansion • Ageing IT systems • Market opening • Increased regulatory pressures • Need for increased efficiencies • Satisfy increased customer expectations

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5

Focus on Customer Excellence

Build a structure that promotes

functional excellence

Realise increased value through

partnerships with contractors /

suppliers

Optimise the standards &

policies

Achieve out-performance

through step change in core T&D capabilities

Next generation IT systems

Networks Transformation Vision & Strategy “Make BGN a best in class Network Utility Service Provider, and Improve

it’s Customer Service capability, allowing it to meet current and future regulatory targets and expectations”

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Delivering the Vision Delivering Excellence across

Networks

Focus on Customer Excellence

Build a structure

that promotes functional excellence Realise increased

value through partnerships

with contractors /

suppliers

Optimise the standards &

policies

Achieve out-performance through step

change in core

Networks capabilities

Next generation IT

systems

• Step change in Asset Management, Work Management, Field Force, Metering, Operations, Construction, Supply Chain, etc.) • Out-performance in PR2 / readiness for PR3

• Customer centric operations • Unified positive view of BGN • Single service delivery, process & standards

• Make BGN a great place to work • Provide platform for other BG businesses (e.g. electricity generation /

Firmus Energy / future mergers) • Build a structure that supports process excellence

• Build asset stewardship • Build suite of leading standards / policies • Build long term perspective for BGN

• IT systems to enable operational excellence and sustain the efficiencies • IT support to Work & Asset Management, Work Delivery, Customer Contact, Materials Management, Metering, etc.

• Rollout of contracting capability model for work delivery activities • Help to transform Bord Gáis’ strategic partners

Target Operating Model And New Processes

Head of Bord Gáis

Networks

Asset Management

Asset Strategy Investment Management

Asset Programmes

Asset Information Customer Workflow

Progression Detailed Design Data & Records Scheduling & Dispatch

Operations Performance Services Construction

DeliveryNetworks

Operations Risk Safety Environment Management Systems

Regulatory Affairs Commercial

Workflow Management Service Delivery Regulation &

CommercialSafety, Quality,

Environment

Delivery Support

Quality & Management

Systems, including Audit &

Compliance

Business Intelligence

Asset Information Management

Conceptual Planning

Contract Strategy

Asset Programme Management

Integrated Planning

Investment Analysis &

Review

Investment Planning & Budgeting

Network Analysis & Strategic Planning

Asset Strategy, Policy, Integrity &

Performance

Material Design & Innovation

Shipper Services & Large Account

Management

Customer & Marketing Strategy

Price Reviews

Capacity Register,

GasPoint & FAR

Regulation Management

Revenue & Tariff Setting

Transmission Construction Management

Distribution Construction Management

Agriculture Liaison Officers

Distribution Project

Management

Grid Control

Maintenance

Emergency & Repairs

C & I

Specialist Technical Services

Siteworks Management

Stores & Materials Management

Field Performance Management

Fieldforce

Sales (New Connections)

Quotations

Licensing

Short Term Materials & Logistics

Health, Safety & Environment

Planning

Wayleaves Admin-istration

Customer Call Handling

Customer Complaint

Customer Survey

Estimation

Detailed Design

Technical Project Planning

Drawing (incl. GIS Updates)

Data Quality

Data Control

Scheduling

Dispatch

Emergency Dispatch

Manage Workflow Performance

Monitor Field Performance

Business Intelligence (WF

& SD)

Safety Case & Policy

Environmental Action Planning

Risk Management & Business Continuity

Manual Job Progression

Fieldwork Estimation

Inspectors

Trading & Settlements

Data Operations

System Training

Revenue Reporting

Meter Reading & Dispatch

Site Engineers

Regulatory Controls

Reporting Procurement Transaction Risk (incl. Insurance) HR IT Facilities

Administration (incl.

Reception)

HRFinance FacilitiesIT

Training

Safety Management

Systems

Unregulated Commercial Contracts

New Organsiation Structure 6

Balanced Scorecard Perspectives

HSE

Customer

Internal processes

Financial

Level 3: Departments

Manage Investment Asset Programmes

Asset Strategy

Customer Workflow progression Detailed design

Services Networks Operations Construction Delivery

Management systems Safety Environment Risk

Regulatory affairs Commercial Regulatory controls

Asset Information

Operations performance Data and records Scheduling and dispatch

BS Perspec

Value Lever

KPI Indicator Description Indicator Rationale Data Points

Financial Efficiency Service Delivery direct cost as % of total cost

Provides total service delivery costs as a % of total completed work costs (potential to consider breakdown e.g. materials vs. contractor costs)

Measures service delivery management cost efficiency; should be viewed within context of total workflow volumes and cost

Total service delivery costsTotal out-turn cost of work

BS Perspec

Value Lever

KPI Indicator Description Indicator Rationale Data Points

Financial Efficiency Service Delivery direct cost as % of total cost

Provides total service delivery costs as a % of total completed work costs (potential to consider breakdown e.g. materials vs. contractor costs)

Measures service delivery management cost efficiency; should be viewed within context of total workflow volumes and cost

Total service delivery costsTotal out-turn cost of work

As se t M g mt

Wor

kflo

w

Man

agem

ent

Ser

vice

D

eliv

ery

Reg

. &

C

omm

. S Q E

Leve

l 2:

Func

tion

s

KPI/ Balanced Scorecard

Decision Support Tools

Based on the Vision for Bord Gáis Networks.....

new operating model, organisation structure,

business processes, and KPIs were developed .....

These new processes & capabilities being automated and

standardised through a new set of integrated

systems

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New Operating Model – High Performance Utility Model (T&D)

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ASSET MANAGEMENT

WORKFLOW

SERVICE DELIVERY

REGULATORY AND COMMERCIAL

WORKFLOW

HSQ

E

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Reorganise Company to Fit HPUM

HPUM Activities

Asset Management Investment

Management

Asset Strateg

y

Asset Programmes

Asset Information

Asset Strategy Policy & Compliance

Network Analysis & Long Term Planning

Asset Performance & Condition Mgt

Asset Risk Management

Project Initiation

Programme Planning & Conceptual Design

Maintenance Forecasting

Deferrals & Variance Management

Data Management & Audit

Information Strategy & Governance Asset Investment Review

Long & Medium Term Planning

Investment Analysis

Capital & OM Budgeting

System & Material Design, Innovation & Engineering

Integrated Resource & Supply Chain Planning

Contract Strategy

Delivery Performance Management

Note: Meters are included as an asset

Org Building Blocks

Head of Bord Gáis Networks

Service Delivery

W orkflow Managemen

t

Asset Managemen

t Safety Quality &

Environment Regulation & Commercial

Investment Management

(1)

Asset Strategy

(1)

Asset Programmes

(1)

Asset Information

Network Analysis & Long Term Planning

Asset Strateg

y, Policy, Integrit

y & Performance (Contr

ol Systems,

AGIs & DRI,

Pipelines &

Mains, Customer

Meters,

Compressor Station

s)

System & Material Design (including Innovation & Engineering)

Investment Analysis & Review

Investment Planning & Budgeting

Programme Planning & Conceptual Design

Contract Strategy (Materials and/or Services Required)

Asset Program

me Mgmt

(Integrated

Resource &

Supply Chain

planning, Perform

ance Mgmt

Strategy, Maintena

nce Forecasting, Risk Assessment for Deferral

s)

Business Intelligence (1)

Asset Info Management (1)

Teams

HPUM Processes

Roles

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New Asset & Work Management Systems

● Maximo is the work and asset mangement system. Holds Asset Register. All jobs scheduled and tracked in Maximo.

● The Click system is used to assign the work to handheld devices

● Syclo is used to return real time data from the field to Maximo

Maximo Click

Syclo

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May 2009

Jun 2009

Jul 2009

Aug 2009

Sep 2009

Oct 2009

Nov 2009

Dec 2009

Jan 2010

Feb 2010

Mar 2010

Apr 2010

May 2010

Jun 2010

Jul 2010

Aug 2010

Sep 2010

Oct 2010

Nov 2010

Dec 2010

Jan 2011

Feb 2011

Mar 2011

Apr 2011

Define Operating

Model Deliver New Organisation & Processes Deliver Systems Deploy & Deliver

Benefits

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Vision for Asset Management Department

● Contribute to making BGN a leading Utility Service Provider with a strong asset

management capability/focus by:

● Making proactive Asset Investment decisions based on quality data ● Predicting and managing the performance of our Assets ● Managing Asset risk and value (Commercially Aware) ● Doing ‘more with less’ ● Playing a central role in Regulatory Price Reviews ● Having skills and processes which are capable of being transferred to other Asset/Business

Areas

● Key to achieving this was the establishment of a dedicated Asset Management Department

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New Asset Management Department Structure Head of Asset Management

Asset Programmes


Asset Strategy

Asset Strategy, Policy, &

Performance (Asset Segments)

Network Analysis & Strategic Planning Asset Integrity Investment Planning

Investment Performance

Conceptual Planning

Contract Strategy (Materials and/or

Services Required)


Integrated Planning


Total Number of Staff = 45

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Asset Strategy

Head of Asset Strategy

Network Analysis & Strategic Planning

Asset Information 5 x Asset Owners AGIs & DRIs

Pipelines Compressors

Meters C&I

Asset Integrity

Key Objectives •Maximise Integrity of all Asset Classes •Minimise Risk •Develop Risk Based Asset Policies •Third Party Liaison •Lab Activities

Key Objectives •Demand Forecasting •Network Modelling & Analysis •Plan Development of the Network

Key Objectives •Manage Networks Data •Real up-to-date Asset Information •Informed Decisions •Development of Decision Support Tools •KPI’s & Metrics

Key Objectives •Own the Assets •Asset Policy Frameworks

•Legal Compliance •Technical Compliance •Manage Risk •Optimise Returns

•Replacement Strategies •Investment Strategies •Innovation •Asset Plans

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Head of Investment Management

Investment Planning


Key Objectives •Investment Business Case Preparation •5 Year Investment Plans •Annual Budgets •Post Investment Reviews •Project Approval Commitee Process Owners •Price Review

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Asset Programmes

Head of Asset Programmes

Integrated Planning

Contracts Management

Conceptual Planning Asset Programmes

Key Objectives •Programme Management •Programme Approvals •Price Control •Efficiencies

Key Objectives •12-18 month plan •Integrated Resource Plan •Integrated Supply Chain Plan •Identify Constraints

Key Objectives •Contract Management Risk and Value •Contract Performance •Manage tender process •Network Services Contract •Category Management •Process Standardisation •Efficiencies/Savings

Key Objectives •Options Analysis – T&D •High Level Estimation •Optimising design solutions

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● Up-to-date and accurate information is vital to enable informed decisions to be made.

● Asset Information team support the Asset Management function by providing/utilising a range of reporting tool

● This approach provides ● Greater clarity and cohesion on what the important issues are

● Shifts focus to exception reporting and out of tolerance issues ● Focuses on delivery of key strategic objectives

● Improved efficiency ● Increases quality of information for decision making ● More time analysing information, less time preparing it

● Flexibility to adapt to changing business information needs

● Tools used:- ● Reports (Source system reports, data warehouse for cross system reports) ● KPIs and Metrics linked to Corporate Goals ● Interactive dashboards showing key information & trending to management ● Scenario Modelling Decision Support Tools

Asset Information / Business Intelligence

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Decision Support Tools

● Different tools are used depending on what question is being asked

Analysis Complexity

What happened?

Where was the cause of the issue?

Why is this happening?

Given our knowledge, what will happen next?

What best outcome can we achieve?

What if this trend continues?

Maximo & Data Warehouse Reports

Scenario Business modelling

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● Asset Management Scenario Modelling Tool ● Ability to run scenarios to see future impact of decisions ● Governing asset policies included ● Linked to data warehouse to access current asset information

Scenario Modelling Decision Support Tool

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KPI and Metrics Sample Dashboard ● Interactive dashboards will show key information & trending to management

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PAS55 Accreditation

● PAS 55 is the British Standards publicly available specification for the optimised management of physical assets ● Provides clear definitions and a 28-point requirements specification for

establishing and verifying a joined-up, optimised and whole-life management system.

● In 2007 a PAS 55 gap analysis was completed which concluded;

● No overall Asset Management System in place across business ● Pockets of very good practice being employed ● Asset Management principles need to embedded at lower management levels

to be effective

● A detailed PAS 55 gap analysis is to be performed again later in 2011 ● Given new structure, policies, processes and systems now in place it is

expected that gaps will be relatively minor ● Based on gap analysis a programme to achieve accreditation will be

developed ● Accreditation is not a requirement in Ireland but we believe it gives external

approval and validates our asset management systems

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Managing the Asset – What’s Changed?

Capability Pre Implementation

Manage Investments & Asset Programmes

Dispersed Asset Management function with varying quality asset information Capex forward looking but Opex built up from previous budget Development of strategic plans involved manual processes

Good Asset Investment Review processes in place

Compliance with regulatory standards

Post Full Implementation

Centralised Asset Management function with full Asset and Maintenance records providing full Asset Condition and Asset Performance Integrated Asset Planning Process for both Capex & Opex plans – activity based and forward looking Strategic Simulation model for long term scenario planning helps provide optimum returns on asset investments Aim/challenge to be more specific at asset level E.g DRI maintenance V replacement cost? Risk & Reward model, Improved Control and Mgt of risk - definition of criticality Delivery of capital and operations efficiencies

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Capability Today Post Full Implementation

Manage Asset Strategy

Low understanding of Total Cost of Ownership Low use of Asset Performance data Reliance on national standards covering most assets Extensive risks documented along with associated controls

Centralised Asset and Maintenance records providing full work and costs from cradle to grave

Measurement of asset performance, condition, and life expectancy as input to long-term asset planning Derive customised standards to meet local leading practices

Proactive Risk Management capability, minimising regulatory value at risk

Comprehensive Asset Strategy and Policies to optimise work volumes

Manage Asset Information

Independent systems and manual Asset Registers Data constraints indicative of a System led approach rather than Business led Lots of data is held locally and needs to be more widely available

Centralised/integrated systems Business led data model and architecture Data capture is automated as much and as early as possible

Managing the Asset – What’s Changed?

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Challenges To Establishing The AM Department

•People • Understanding and acceptance of the AM Model Across the Organisation • Need to challenge the ‘this is the way we have always done it’ • People in AM understanding their own role and the need to interface into the wider organisation. • People ‘leaving behind’ some of their present day duties and taking up new ones • A lot of people being taken out of the business on training, testing etc

•Process • Establish the relationships to ensure inputs/outputs are agreed to facilitate all the work of AM • Implementing common processes across transmission and distribution

•Systems • Working through the bedding down period post go live, incl. coping with minimal data • Accept that there will be some initial negative efficiency impacts across the business

•Intelligence • Source data for our KPIs before systems are in place. • Quality and Usability of asset Data • Continued DST Development

•Safety • Ensuring safety remains top priority during transition period

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Benefits Experienced To Date

•People • More defined structure, greater clarity in roles • Quicker decision making • Better management of contractors

•Process • Detailed set of process to define how organisation works • Implementing common processes across transmission and distribution leading to efficiencies

•Systems • Customer Service improvements – greater visibility in terms of siteworks • Improvements in data and records

•Cost & Efficiency • Better understanding of CAPEX and OPEX entering price control negotiations • Improved CAPEX governance • Better care regimes for assets • Opex Reductions

• Headcount and Efficient Work Practice • Optimising Siteworks and Maintenance Activities

• Greater ability to benchmark

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Questions ?

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Bringing the Model to Life Asset Management

Workflow Management

Regulations & Commercial

Asset Strategy - Network Analysis & Strategic Planning

Customer Scheduling & Dispatch

Workflow Progression

Problems identified with high level proposals for how to solve

Long Term Network

Development Plan

Design

Technical Project Planning

HS&E Planning

Prereq Mgt

• Shippers information

• New Connections, e.g. Power stations

• Tariffs• Regulator

Asset Strategy – Policy, Integrity &

Performance

Technical Policies

Asset Segments – frequencies, materials, procedures, competence

Asset Programmes – Integrated Planning

Investment Management – Analysis & Review

PrioritisationScenario Analysis

Post Investment ReviewCapital Efficiencies

Licensing (inc road openings)

Wayleaves Admin

Short Term Materials & Logistics

Operations Performance

Asset Programmes – Contract Strategy

Holistic view of services, and / or materials required

Master plan

Contract Management

&/or Tendering

Service Delivery

Manage & deliver construction projects

Construction Delivery

Input to tendering process from Construction delivery

Manage Workflow Performance

Monitor Field Performance


Scheduling

Dispatch

Gas Control (Emergency)

Safety, Quality & Environment

External

Asset Strategy – Materials & Innovation

Asset Information Asset Information Management

0

Detailed Design

Drawing (inc GIS Updates)

Revision 723/07/09

Distribution Example:

Construction, Replacement,

Reinforcement, Diversion

e.g. New Town

Input regarding Contract delivery performance

Estimates

Feedback regarding new connection status

Support for Regulatory submissions, e.g. PCR

Investment Management – Investment planning

Asset Programmes – Conceptual Planning Asset

Programmes – Programme Management


Support Construction

Delivery

Support tendering

process

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Desktop StudyNetwork AnalysisOptions AnalysisHigh Level Estimation

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Recommended high level design

option with estimated cost

Interim approval to proceed with

detailed design

6

ID project to develop based on the overall view

Kick off Conceptual Planning processes

Initiate Detailed Design &

EstimationCompleted

Design

Seek final approval to deliver / tender

CAPEX & OPEX Long & Medium Term Plan

10

Monitor & Review

9

7

8b

3

4

ü

DGI Detailed Design(Mech,Civil,C&I)Modelling AnalysisTender & Construction Drawings (where necessary)Detailed Estimates

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12a

8a

Manage & deliver construction projectsManage & deliver

construction projects

Construction DeliveryInc.

specialists; e.g. welders

12b

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15a

15bSafety Case, Policy & Training

Risk

Environment

Management Systems

Manual Job Progression

Data & Records

Data OperationsData Control

Data Quality

System Training

Customer Call Handling Management

Customer Complaint

Customer Survey

Quotations

Operations DeliveryManage and deliver

connections and maintenance and repair

of network assets

Network OperationsManage and deliver

connections and maintenance and repair

of network assets

Services

Grid ControlMonitor & Operate Tx & Dx Network safely and reliably

Delivery Support

Meter Reading & Dispatch

Sales (New) Siteworks ManagementField Work Estimation

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ASSET MANAGEMENT

WORKFLOW

SERVICE DELIVERY

REGULATORY AND COMMERCIAL

WORKFLOW

HSQ

E

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New Asset Management Department Structure Head of Asset Management

Asset Programmes


Asset Strategy

Asset Strategy, Policy, &

Performance (Asset Segments)

Network Analysis & Strategic Planning Asset Integrity Investment Planning


Conceptual Planning

Contract Strategy (Materials and/or

Services Required)


Integrated Planning


Total Number of Staff = 45

Transforming Asset Management Capabilities at...

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