Accentures High Performance Utility Model for Transmission and Distribution Operations An integrated framework for building the intelligent networked utility of the future

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These industry issues are now being further complicated by the need to incorporate renewable and distributed energy sources into the generation mixand the increasing potential of smart technologies to improve network management and operations.

Achieving operational excellence in todays complex utility environment is not easy, and the uncertainties and risks facing every component of the utility business are driving widespread changes. With these changes comes the need for new business and technology approaches that enable better, more flexible and more sustainable choices in managing networksfrom the control room to the customer premise.

Utilities looking for business models optimized to identify and support these approacheswhile also providing a springboard for addressing the uncertain demands of tomorrowrely on Accentures High Performance Utility Model (HPUM).

HPUM synthesizes leading practices in utility business process modeling derived from Accentures work with 400 utilities around the world, along with its ongoing research to identify and replicate the characteristics and attributes of high-performance businesses.

Utilitiesaroundtheworldarefacinganarrayofchallengesregardingtheirassets,skills,customerdemands,mergersandacquisitions,regulatorycomplianceandcostbase.

Utilities:risingtothechallengeofthenewenergyworld

HPUM and operating model alignmentAs part of its drive toward becoming a world-class organization, a large UK utility wished to review its operating model and assess the extent to which it was aligned to achieve an aggressive, balanced scorecard of the organizational strategic objectives. The utility made extensive use of HPUM capability framework and the comprehensive capability definitions and maturity levels that underpin it. Capability maturity was assessed for current and aspired states, thus enabling the utility to achieve a clear understand-ing of capability gaps. Capabilities were further categorized on their strategic importance, and strategies and plans to advance capabilities were defined.

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AccenturesHighPerformanceUtilityModel:aframeworkforacceleratingprocessdesign

An integrated framework of industry-specific process knowledge and field-tested assets, HPUM is designed to help utilities align corporate strategy with supporting business models and technology requirements. It is based upon results achieved by utilities that consistently outperform their peers, providing the model and tools needed to define and detail processes for utility business activities across the regulated and deregulated utility landscape.

Through its rich repository of multilevel and increasingly detailed processes and associated integration models, capability levels of mastery, key performance indicators (KPIs), metrics and industry knowledge, HPUM can help utilities quickly benchmark their performance against industry leaders, develop needed process improvement plans and accelerate process design down to the application level. It encompasses integrated and interrelated modules

spanning generation, transmission and distribution (T&D), retail operations and corporate services, supporting a companys projects on many levels, across multiple business areas. HPUM includes: Process models encompassing five levels of data for some 2,500 leading utility business process reference models and offering a coherent and flexible baseline for jump-starting process improvement projects.

Performance measurement frameworks leveraging a strategic KPI framework and more than 2,000 metrics.

More than 350 capability assessment models that can help utilities better understand their process mastery based on our benchmarking experience.

A value analysis framework that can be used to drive business case development and assess the value of transformation initiatives across functional and organizational boundaries.

IT frameworks and technology vendor maps, providing a traceable link from process to associated enabling technologies.

More than 500 additional project and development tools, including training materials, research results and points of view encompassing strategies and economics of high-performance businesses.

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HPUMandtheArchitectureforIntegratedInformation(ARIS)HPUM leverages the Architecture for Integrated Information Systems (ARIS) from IDS Scheer as a tool for the design and management of business processes modeling. An integrated solution portfolio for the strategy, design, implementation and control of business processes, the ARIS platform also has unique capabilities for business process analysis. The Accenture-IDS Scheer alliance was established in 2008 and is founded on delivering comprehensive business transformation and business process optimization solutions that can help clients improve cost structure and grow new revenue streams.

Accenture leverages HPUM in ARIS to help companies optimize their investments in strategic business and technology initiatives, including business process management and transformation, enterprise architecture initiatives, service-oriented architecture (SOA), enterprise resource planning (ERP), supply chain and other automation solutions using technologies and application solutions from SAP, Oracle and other providers.

Figure 1. Accentures high performance utility model.

Manage the enterprise

Generation and energy supply Transmission and distribution

Retail and customer operations

Enable the enterpriseManage HR and performance Manage fleet services

Manage IT services and business systems Manage real estate and facilitiesManage finance and tax

Manage supply chain

Prioritize and manage capital

Portfolio strategy and business development

Portfolio performanceand program monitoring

Manage investorrelations

Treasury and cashmanagement

Perform enterprise risk management

Legalservices

Set safety, health andenvironment agenda

Manage regulatoryaffairs and compliance

Executive governance

Wholesale marketintegration

Coreoperations

Capital buildprograms

Risk management

Manage the assetinfrastructure

Plan, manage and execute (work)

Manage thecustomer

Operate the network

Manage the meter

Manage revenueand tariffs

Manage the intelligent network

Manage regulatoryaffairs

Manage retailand customerstrategy Manage interaction

Monitorperformance

Manage compliance

Manage data insight and segmentation

Manage quality and performance

Managesupply

Manage core operationsand services Manage field

operations requests

Customeradvocacy

Manage third-party interaction

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HPUMfortransmissionanddistribution

The logical operating models included within the business layers of HPUM (see Figure 1) are some of its most important assets, providing six levels of detail and covering 567 processesfrom the highest level view across eight major T&D operational capability platforms to specific tasks associated with individual sub-processes. The eight T&D operational platforms covered by HPUM are: Platform 1: Manage the asset infrastructure, including management of investments, asset programs, asset strategies and asset information. It also encompasses asset analytics.

Platform 2: Plan, manage and execute work, with a focus on integration of operational capabilities across all enterprise asset management (EAM) system and mobile workforce management functions, including supply chain, finance, human resources and business analytics.

Platform 3: Manage the customer, encompassing processes related to customer connection requests and outage response management.

Platform 4: Operate the network, including operational planning and support; real-time operations, monitoring and control; planned and unplanned event management and emergency management.

Platform 5: Manage revenue and tariffs, encompassing management of customer policies, product revenue, pricing, tariffs and connections.

Platform 6: Manage the meter, including processes associated with meter reading, meter asset management, data aggregation and processing and the communications environment.

Platform 7: Manage regulatory affairs; for example, regulatory strategy and interface management.

Platform 8: Manage the intelligent network, encompassing the development and operation of

smart grid-related systems and analytics, incorporation and utilization of distributed energy resources/demand response and supporting the development of data management and architecture. Combined with Accentures intelligent network data enterprise (INDE), HPUM provides crucial support for managing smart grid data flows that traditional utility processes and systems were not designed to handle.

The T&D component of HPUM covers the full range of T&D operations and provides increasingly more detailed levels of granularityfrom operating model, to business process architecture, to the technologies enabling each process.

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Level 1 of HPUMs six levels provides an overview of the eight primary T&D process platforms, and Level 2 consists of experience-based capability levels of mastery across the eight operational platforms previously described. For example, under the manage the asset infrastructure platform illustrated in Figure 2, manage investments is one component of the HPUM capabilities assessment framework. For each capability, HPUM helps utilities analyze (see Figure 3) which of their capabilities are leading, above average, average or below average compared to others in the industry so that appropriate steps can be taken to achieve desired performance levels.

1. Manage the assetinfrastructure

2. Plan, manage and execute (work)

3. Manage thecustomer

6. Manage the meter 8. Manage the intelligent network

4. Operate the network

7. Manage regulatoryaffairs

Figure 2. HPUM level 1: view of key T&D processes.

Long- and medium-term planning

1.1 Manage investments 2.1 Plan work and enterpriseresources

2.4 Plan and manage supply chain

2.2 Manage work

1.2 Manage asset programs

Network analysisand long-termplanning

Regulatory/assetstrategy policy/compliance

Assetperformance and conditionmanagement

System/materialdesign, innovationand engineering

Asset riskmanagement

1.3 Manage asset strategy

Datamanagementand audit

Informationstrategy,architecture and governance

Providemeter assets

Administer meter point

Managemeter assets

Managemeter reading

Process andaggregate data

Managedistributedgeneration

Managedemandresponse

Manageautomationand self-healing grid

Performpredictivemonitoring

Managenetworkquality

Manageoperationalinformation

Performoperationalplanning

Provideoperationalsupport

Real-timeoperationsmonitorand control

Manageplannedevents

Manageunplannedevents

Manageemergencies

Plan materialdemand

Procurematerial and service

Managematerials

Receipt,store anddeliver

Paysupplier

Managesupply chainsystems

Emergencyresponse

Regulatory interfacemanagement

Regulatory/revenuestrategy management

Connectionsmanagement

Pricingand tariffsmanagement

5. Manage revenueand tariffs

Revenue and productmanagement

Customer policymanagement

Manageintelligentnetworkreferencearchitecture

Managecommunicationsenvironment

1.4 Manage asset information

Investmentanalysis

Approvedreplacementprojects

Approvedreinforcementprojects

Approvedmaintenance/complianceprograms

Integratedresource andsupply chainplanning

Work initiationand/orbundling

Designand estimate

Pre-requisitemanage-ment

Materialsrequire planning

Schedule Workassign/dispatchand monitor

2.3 Execute work

Field logistics

Workexecution

Contractdeliverymanage-ment

Fieldperform-ancemanage-ment

Assetcommun-ications/work closure

Contractor strategy

Deliveryperformancemanagement

Outagecommunication

Customerrequest/responsemanagement(emergency)

Customerrequest/responsemanagement(emergency)

Rechargeable/recoverablerevenuemanagement

Capitaland OMbudgeting

Assetinvestmentreview

Designand estimate

Construction, replacement and reinforcement

Maintenance

Emergency and repair

New connectionsConnectionrequest

Asset planning

Constructionproject planningand estimation

Maintenanceforecasting

Project sourcing

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Figure 3. HPUM level 2: capability levels of mastery associated with managing asset infrastructure investments.

1.1 Manage investments1.1.4 Asset investment review

Descriptor Basic Threshold Above average Leading

Project/programreview

No systematic review of individual projects or programs

Review (post-investment appraisals) of major programs with large cost variances >10 percent

Review of major programs and projects for cost and delivery variances 10 percent

As above average but, in addition, quality assurance analysis of the effectiveness of projects/programs in delivering the expected outcomes

Asset policies andstandards review

No review of processes or policies governing investment management activities

Feedback on processes and policies captured ad hoc with no clear accountability in this business for this

Method, processes and tools for incorporating learning into the asset management policies/ strategies

Systematic quality assurance review of policies and procedures, issues captured and changes incorporated into the relevant documentation and communicated to relevant parties

Investmentperformancemonitoring,control and review

No links between management performance targets and performance against investment plans and budgets

Performance against investment plan is evaluated, but no formal, consistent process for measurement System for monitoring costs and volumes (unit costs) Programs monitored on volumes or costs only

Previous years activities are reviewed, but no formal mechanism for incorporating changes Performance against plan measured as a KPI, but not linked to incentives / pay Full variance analysis covering unit costs, timing, key outputs Programme spend assessed regularly for variances

Performance against investment plans part of a balanced scorecard/rewards IS solutions that enable timely reporting of variances at a level of detail appropriate for management Program and major projects monitored and controlled throughout the year, using tools to assess variances

Benchmarking No benchmarking is undertaken to compare investment performance between business regions or with other companies

Limited internal benchmarking is performed on key business KPIs and unit cost data An informal benchmarking process exists designed to share leading practice knowledge across the business

Internal benchmarking is undertaken across multiple KPIs and unit cost categories Some limited external benchmarking is undertaken to compare performance on business KPIs A formal benchmarking process is in place to identify leading practice and to share this across regions

As above average but company proactively participates in external benchmarking forums; e.g., comparison with other smart grid pilots

Work closureand data capture

No formal process exists to close down work or to capture asset/ network data There is no audit of the quality of the work performed

A manual process exists to capture work closure and asset data in the appropriate corporate systems There is often a time delay between work closure and the corporate system(s) being updated There are spot checks on the quality of the work performed, but this is limited to work undertaken by contractors

Established processes exist to ensure all network drawings, asset data and work/program closure information is fed back into the appropriate corporate systems on a timely basis There is a formal process to review the quality of the work performed and to feed this information back into the planning/budgeting process (and contract negotiations)

As above average but in addition, data quality controls are in place to ensure new/amendments to existing data and drawings is comprehensive and accurate. Spot checks are undertaken on data quality

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Level 3 of HPUM encompasses end-to-end process architectures for each of the eight T&D platforms. Figure 4 illustrates an example of a process architecture associated with Platform 4operate the network. The figure illustrates HPUMs ability to drill down from an end-to-end, capability-based view to detailed processes. Process flows, interdependencies and interfaces are clearly identified and defined.

Levels 4 and 5 of the HPUM provide even greater levels of detail for each of the processes defined in Level 3, down to the specific steps associated with each task and identification of the associated IT systems and data supported for individual processes.

Figure 4. HPUM level 3: end-to-end process structure example for Platform 4: operate the network.

4.1 Perform operational planning 4.4 Manage planned events 4.6 Manage emergencies

4.2 Perform operational support

Develop and maintainoperational guidance for planning and real time operations

Monitor and control network status(transmission)

Control voltages and reserves(transmission)

Perform network control operations

Liaise withgrid users

Monitor and control network status(distribution)

Control voltages and reserves(distribution)

Review and executesystem accessrequirements

Return equipmentto service

Manage diagramand database changes (due to system changes)

Execute safetymanagement -equipment release

Execute safetymanagement - equipment return

Return tonormaloperations

Establishemergencyresponseorganization

Manageemergency

Manage unplannedrequests for system access

Manage siteattendancerequirements

Manage unplanned evnts and incidents

Energy dispatchand scheduling/commitment

Develop medium- and short-term energy forecasts

Liaise with adjacentnetwork operations and grid users

Develop and maintain/update system accessplans

Develop operating plans for normal and contingency conditions

Coordinate generatoroutage/availabilityrequirements

Develop and maintain operatingprocedures

Manage systemdiagrams, databasesand systemchanges liaison

Manage planningand operationalapplications andfacility requirements

Develop emergency/contingency plans

Analyze, optimizeand reportoperationalperformance

4.3 Real-time operations, monitoring and control

A

A

A

A

A

4.5 Manage unplanned events

Note: signifies a connection back to the to the Analyze, optimize and report operational performance process box in level 4.2: Perform operational support.A

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End-to-endsolutionintegration

Accentures comprehensive capabilities and experience across consulting, systems integration and outsourcing mean we can assist a utility across a full range of businesss and technology objectivesfrom formulating and adopting the right strategic direction, to envisioning process improvements needed to achieve the aspirational operating state, to identifying and implementing the steps needed to achieve operational excellence.

This comprehensive blend of capabilities is helping utilities around the world to: Identify the key business characteristics which will drive change.

Quickly assess capabilities and identify operational gaps.

Identify relevant steps and ask the right cost-benefit questions.

Zero in effortlessly on process details and understand the implications of interrelated processes and organizational roles.

Gain a detailed view of key information flows, IT requirements and integration points.

Accelerate the implementation of follow-on transformation phases.

Not only does Accentures High Performance Utility Model provide a great starting point for building a leading-practice utility operating architecture, but its full suite of integrated solutions can support each stage of the journey to a smarter grid and all aspects of a utilitys operations.

HPUM for process analysis A large North American electric utility leveraged the HPUM to analyze the current and desired operations states and determine key gaps. The process library was then used to challenge existing busi-ness processes, culture, technology, structure and metrics and provide the basis for improvement initiatives. Leveraging the HPUM, strategy and roadmap development were complet-ed in an accelerated time frame.

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AccenturesHighPerformanceUtilityModelwasdevelopedtodeliverbusinessresultsinthefollowingareas:1. Providing a leading-practice modelDefining high performance HPUM provides a leading-practice model for utility operations down to the application level, translating the definition of high performance into useable capability definitions and supporting processes established through decades of consulting and operational experience. For each process defined in the HPUM, Accenture has identified key factors that drive high performance and operational excellence.

2. Evaluating the current performanceDetermining the as-is position and the gap to high performance

The model provides a target operating model for high performance with corresponding capability levels of mastery, defining more than 60 key transmission and distribution capabilities and exploring four levels of mastery for each. These provide a benchmark to understand the spectrum of performance for each capability, with tangible characteristics for each level of performance.

3. Enhancing process improvement programsAccelerating delivery and benefits The HPUM process architecture contains 560 T&D business processes, all of which have been designed by subject matter experts to leverage leading thinking and offer a coherent baseline solution for process improvement projects.

4. Focusing the project scopeDefining the critical path" The HPUM supports an integrated view of utility capabilities and processes sitting within and across high-level business platforms. The top-level operating model shows distinct platforms and capabilities, with the links among them identified and documented at increasing levels of detail. This enables the scope and impact of a transformation or improvement program to be seen from the outsetand for projects on the critical path to be clearly identified.

5. Integration in a holistic view of the utility business: How does T&D fit with the business as a whole?

HPUM for T&D operations links with corresponding models for retail, generation and corporate services. This coordination provides logical integration points and a comprehensive view of high performance of all areas of the business.

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Acceleratingoperationalexcellence

As utilities move into the smart grid future, they are entering territory that is unchartednot just for utilities, but for any industry. Accentures HPUM can help them plot and follow the surest and most direct route to industry leadership.

To find out more about our High Performance Utility Model, and about how Accenture is helping utilities achieve and sustain high performance, please contact:

Global: Suleman Allisuleman.alli@accenture.com North America: David Roulsdavid.m.rouls@accenture.com Europe, Africa and Latin America: Vincent Goutalliervincent.goutallier@accenture.com Asia Pacific: Ann Burnsann.v.burns@accenture.com

AboutAccentureAccentureisaglobalmanagementconsulting,technologyservicesandoutsourcingcompany,withmorethan223,000peopleservingclientsinmorethan120countries.Combiningunparalleledexperience,comprehensivecapabilitiesacrossallindustriesandbusinessfunctions,andextensiveresearchontheworldsmostsuccessfulcompanies,Accenturecollaborateswithclientstohelpthembecomehigh-performancebusinessesandgovernments.ThecompanygeneratednetrevenuesofUS$21.6billionforthefiscalyearendedAug.31,2010.

Copyright2011AccentureAllrightsreserved.

Accenture,itslogo,andHighPerformanceDeliveredaretrademarksofAccenture.

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AbouttheAccentureUtilitiesindustrygroupTheAccentureUtilitiesindustrygrouphasmorethan30yearsofexperienceworkingwithelectric,gasandwaterutilitiesworldwide.Ourgroupincludes10,000professionalsworkingwithapproximately275clientsin40countries.Weworkwith93percentoftheutilitiesonthe2010Fortune500list,providingthedeepindustryknowledge,peopleandassetsutilitiesneedtodevelopthestrategiesandadoptsolutionstoimproveperformanceinthedynamicenergymarket.