Combining Six Entities Into One Company to Increase Service And Reduce Costs

The Client's Challenge

Solaris Power (later AGL) had been created by the enforced merger of five municipal electricity companies and a section of the state-owned electricity company—it therefore had at least six ways of doing anything and no common systems or approaches.

The assignment was to quickly develop the new organization’s ‘one way’ of designing and managing the complete distribution network and generate operational efficiencies and sustainable change to enable the organization to compete profitably within the newly deregulated industry.

Scope

The project spanned the entire electricity network distribution operation and involved:

• the review of 64 business processes across six departments
• a core team of 9 full and over 40 part time business representatives;
• approximately 250 staff involved in a series of 130 review meetings and workshops
• completed within 100 days.

Approach

The Business Simplification process involved the:

• generation of a 3-year corporate vision by the executives

• determination of business and customer target outcomes for each process

• improvement of the business processes through the detailed documentation and assessment of the current processes and critical business issues

• redesign of the business processes through the direct involvement of key business representatives

• identification of the information required to support the revised processes – used to underpin the subsequent system selection strategy

• the establishment of a series of strategic and operational projects to implement the changes identified

• definition of a change management program incorporating the organization change criteria necessary for sustainable change.

The Results

• A significant shift in the organization’s culture to support a ‘can do’ approach, focused on overall business benefits rather than individual goals and objectives

• The integration and standardization of the processes of the six formerly separate businesses

• A reduction of 63% in the number of process steps from the current state

• The definition of over 30 strategic and operational projects, culminating in a structured three-year implementation program

• Enablement of the implementation of the organisation’s competitive business system strategy

• Achieved improvements in organisation efficiencies and cost reductions in excess of 40%.

The Payoff

• The resultant systems strategy was (independently) costed at one quarter of a competitor’s systems strategy but with twice the benefits

• Senior management fully understood and took ownership of the outcomes and their realization

• The resultant clear systems specification allowed the resultant SAP system to be installed on time and under budget, and realize all of the projected benefits.

• The realization of multiple immediate benefits through several “quick win” projects

• Widespread staff commitment to and ownership of the outcomes and change program.