Digital Utility

Facing huge capital outlay, the Government of Abu Dhabi turned to the private sector to further investment in the water & electricity industry. Since privatisation in 1998, ADWEA has built an IT infrastructure to maximise its efficiency, reduce costs and create a knowledge environment.

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By  Greg Wilson Published  July 25, 2001

Digital Utility|~||~||~|Abu Dhabi’s 30-year-old Water & Electricity Department was facing the age-old dilemma in the mid-90s — how to control escalating maintenance and production costs while boosting production to feed demand forecasts. Facing huge capital outlay, the Government of Abu Dhabi turned to the private sector to further investment in the water & electricity industry. The enactment of Law No 2 of 1998 established Abu Dhabi Water & Electricity Authority (ADWEA) and charged it with the task of privatising the water & electricity industry in and around Abu Dhabi.

ADWEA plunged headlong into privatisation, creating two independent water & power projects (IWPP) with the help of local and foreign private investment. Another two IWPP projects are scheduled for the end of 2001.

Although no figures are available on the exact cost savings achieved through the IWPP tender processes, the costs of plant construction and water/electricity production have fallen “significantly.” In addition to production savings, the unbundling of several utility services has created downsizing in the workforce from 15,000 to less than 9000.

Accompanying the restructuring of the water & electricity industry within Abu Dhabi has been the parallel construction — from scratch — of an IT infrastructure. Under the chairmanship of H.H. Sheikh Diab bin Zayed Al Nahyan, ADWEA’s senior management sanctioned work to build the region’s initial ‘virtual utility,’ with the aim of maximising efficiency, reducing cost and transforming ADWEA into a knowledge organisation. “We’re moving towards a digital utility,” says Dr. Mohamed Baka, ADWEA’s IT director.

“Deregulation has been pushing the utility business worldwide, to enhance the business of energy delivery, to [increase] customer satisfaction and reduce costs. The Internet and market forces are further pressing the IT environment. We’re moving towards integrated processes, and deploying technologies to connect us with our customers.”

In the space of two years, the 150-strong IT division working within ADWEA has deployed a 2000-user network architecture based on ATM and fibre optic, connecting all nine of the group’s companies. With the network infrastructure in place, the team embarked on an Oracle ERP rollout across the entire group.

More recently the utility went live with an extensive rollout of Maximo and built a centralised data centre. “One of the major challenges we’re facing, like any other business, is a pressure to provide the right information, to the right people, at the right time… all of this is putting pressure on us to [meet the] strategic information management challenge,” explains Dr. Baka.

The initial phase in the construction of its flexible IT infrastructure was the deployment of the network and subsequent rollout of Oracle Financials 10.7. The Oracle project, which went live at the start of 1999, was completed on time and on budget within six months. “Before we had these systems, we didn’t have any automated systems,” says Dr. Baka. “Being a government entity we used to outsource payroll systems to the Department of Finance, and purchasing to the Department of Purchasing.”

With the Oracle applications bringing uniform methodology and business practices to ADWEA’s financial operation, the IT personnel embarked on the next phase of the project. Over the next 18 months the UAE’s second largest organisation began an extensive rollout of Maximo, computerised maintenance & materials management system (CMMS), from US-based vendor PSDI. The package, which has been integrated closely with the Oracle applications, addresses enterprise asset management issues for the entire group.

“Maximo was needed to control our stores, which [were] without any automation,” comments Dr. Baka. “Our multiple stores are large and contain some high value items. The Maximo solution includes business rules with maintenance best practice and tight integration with the Oracle suite of applications. It addresses areas of inventory and materials management.”

Critical in delivering a greater degree of management and cost control to ADWEA’s materials and maintenance processes was the development of a common, group-wide, materials catalogue. The common materials catalogue consists of XML-tagged data on every material item and maintenance component used within the ADWEA Group.

The catalogue will form the core of ADWEA’s procurement strategy. “It’s an enormous catalogue; it’s at around 200,000 items… the first phase of Maximo has laid down the foundations of procurement,” says Dr. Baka.

The Maximo application went live last month, hosted in ADWEA’s centralised data centre. Currently, all the different business units within the group access the application over the intranet to conduct centralised purchasing. Essentially, the centralised IT department within the utility is acting as a shared service provider — hosting the application for its independent business units. “The data centre is fully [equipped] to provide application services to the ADWEA Group of companies,” explains Dr. Baka.

The construction of the data centre environment has enabled ADWEA to consolidate some of its existing NT servers, replacing them with larger Unix-based machines. The collection of Sun E4500s are currently hosting the Oracle databases that support the ERP and Maximo applications.

However, the service provider role of the Sun Solaris/Windows 2000 data centre is expected to expand towards the end of the year, as ADWEA completes its migration to Oracle 11i — further web enabling its business processes.

“With the move to Oracle 11i applications we’re going to be able to take more information from the backend systems, and deliver more business data visibility to the users,” predicts Dr. Baka.

“This is a shared service and depending on how successful it is will [determine] how quickly we move ahead with this service,” he adds.

Greater data ‘visibility’ will almost immediately be applied to human resources, with the rollout of Oracle HRMS running in parallel to the deployment of Oracle 11i Financials. Key to the project is the introduction of self-service amongst ADWEA’s 9000-strong workforce. Self-service will encourage staff to take greater responsibility for their relationship with the company by making personnel information services, training course applications, employee profiles and self assessment forms readily available online. The application will also handle areas such as personnel policies, job evaluations, salaries and administration, all of which were previously handled via a paper-intensive system.

“Oracle HR will introduce the Internet as a tool to the users within ADWEA. The self-service facility will reduce the need for [individuals] to call the HR department… This moves us beyond merely automating a paper-based system to one that measurably improves the speed and effectiveness of people management,” says Dr. Baka.

||**||The Future|~||~||~|A further addition to ADWEA’s data centre is the forthcoming geographical information system (GIS) application. The ARC-GIS system from ESRI will enable the utility to increase its efficiency and improve customer services, by providing the engineering departments with instant and accurate mapping data.

“The GIS initiative is an effort to increase our efficiency and enhance customer service — it provides mapping data on the physical network and physical assets. [For example, we] will be able to locate [assets] quickly if there is a burst pipe,” explains Dr. Baka.

When fully rolled out, the GIS system will be closely integrated with both the existing billing and Maximo CMMS application. ADWEA is already conducting backend integration with its existing portfolio of ‘utility-specific’ energy delivery resource planning (EDRP) applications. “The ERPs are mainly for the business information systems — whereas the EDRPs are mainly for engineering applications,” says Dr. Baka.

“The integration of these systems is key to our operations and our business processes, and we’re enhancing this area… The integration between the EDRP [apps] and [Oracle] ERP will generate enhanced customer communication support [because] we’re integrating our internal and external energy delivery business processes.”

With the deployment of multiple business and engineering applications either in place, or in the process of being rolled out, ADWEA is edging closer to its aim of becoming a virtual utility. During the initial stages of IT infrastructure deployment the focus of IT was very strategic, explains Dr. Baka. However, the utility is moving away from its production model to an information model. “We’re promoting the view that information is as valuable and as important as cash flow,” says ADWEA’s IT director.

“We used to be mainly technology driven [so] the development of the IT architecture was a foundation for the expected application needs of the group. But we’re moving to a different approach where we are organisationally led, so the IT strategic planning is led by the [broad business] plan. This is working extremely well. [For example], development of key themes like IT investment is derived from a consensus of the senior management and IT is part of this,” he adds.

The accelerated introduction of IT and the continued migration towards an Internet environment has required significant education of the user base. With the backing of the management board, Dr. Baka and his colleagues have embarked on numerous training schemes to educate both technical staff and the end user community. “We have always been developing business cases, communicating [project] goals and establishing business scope,” explains Dr. Baka.

“On the training side, ADWEA has invested a lot in skills building. We regard training as an investment and not as an expense… this enables us to maximise our return on investment,” he adds.

The environment of continuous change, which has governed developments within ADWEA for the last two years, has helped to gradually reduce change management issues. Overtime, the IT team has helped to build an “overall ambiance of excitement about the Internet,” says Dr Baka. Which has meant, “we haven’t faced serious change management issues.”

Since the formation of ADWEA, the utility has had a strong focus on the employment of nationals. The IT division is no exception with a “good number of nationals participating in IT projects,” says Dr. Baka.

As the IT division’s strategic aim increasingly focuses on information availability, rather than production systems, the skills required by the IT team have also changed. Over a period of time, the skills within the IT division have changed from software engineering to software methodology. “There are less software engineers… and more people with software methodologies, systems architects and system integration [expertise],” says Dr. Baka.

Many of the details surrounding ADWEA’s forthcoming web services strategy remain under wraps. However, Dr Baka hints that ADWEA is currently working on backend procurement strategy. Other initiatives in the pipeline are thought to focus strongly on customer facing services. However, details are limited.
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