Information Technology Update

ERCOT Board of Director’s MeetingOctober 18, 2005

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Topics

Program Management Review

Market Redesign Project Flow

Release 4 summary

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Program Management Review

The issue: Over 70 projects in 2005, more in 2006 Increased focus on project delivery Time to review the process Level-set on Program Management maturity

The process KEMA engagement

— Review current PMO process— Perform a Process Maturity Model assessment (PMI standards)— Provide a “best practice” model— Present a plan for moving forward

Anticipated outcome Goal: Level 4 organization Plan to be delivered in two weeks Will show short term (quick hits) and long-term plan Will aggressively implement changes

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Program Management Review

Findings General observations

— Some good processes are in place— Maturity level is at 2.1— Some holes in existing maturity levels— At a stage where opportunity exists for improvement (stable)

Maturity Assessment

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Five Levels

1: Initial

2: Repeatable

3: Organized

4: Managed

5: Optimized

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Program Management Review

Major Overall Issues

Accountability and ownership

Communications

Tools

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Program Management Review

Maturity grade level 1’s Quality issues

— Quality policies are lacking— No evidence of quality management

Risk Management— No standard risk management practices— Little contingency planning done (budget focused)

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

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Program Management Review

Short-term tasks (Solidify existing level next 4-6 months) Revise the PMO and Business organizational structure

Establish an effective project reporting structure

Revise the resource utilization process

Long-term tasks (to reach level three next 12-18 months) Resource management

Establish a formal quality management process

Establish formal SDLC and IT Governance integrated with PMO

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Market Redesign Project Flow

ProtocolsBusiness

Requirements

ConceptualDesign

Build Test

DetailedDesign

TACApproval

Implementation

TACApproval

IssuesIssues Issues

Market ReadyTAC

Approval

TPTF

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Release 4 summary

The Project Went live on October 5 Covered 9 PRR’s through 17 projects More than 85 ERCOT employees were involved in all phases ERCOT Hours 31,000 Areva Hours 23,000 60 servers were impacted

Outcomes No impact to Frequency Control Application Minimal impact to Real Time Balancing Market (2 intervals

missed) Anticipated market savings of $20.1 million year