IT and Business Change Capital Expenditure · 2019-01-24 · Hyperion, Oracle EBS – Accounts Payable, Purchasing, Cash Management, Project Costing, Fixed Assets, Accounts Receivable,

Irish Water

IT and Business Change

Capital Expenditure

Interim Price Control Submission 2014-2016

Document No: IW-IPC-003

2 | Irish Water - IT and Business Change Capex Submission

Contents

1 Executive Summary 3

2 Overview of IT and Business Change Functions 4

2.1 Context 4

2.2 Role of IT and Business Change 5

2.3 Irish Water IT Function 5

2.4 Irish Water Business Change Function 6

2.5 Key Areas of Focus 6

3 IT and Business Change Capital Projects 7

3.1 Environmental/Market/Regulatory 8

3.2 Run - Mandatory 10

3.3 Business Requirements & Business Projects 13

3.4 Water and Waste Water Transformation Projects 15

3.5 Project and Change Management 17

3.6 Local Authority Change Delivery 17


1 Executive Summary

In January 2014, Irish Water (IW) took over responsibility for the provision of water and waste water services from 34 Local Authorities (LAs). As a new national utility, IW will need to invest in people, processes, systems and assets to provide safe, affordable and environmentally compliant water services to all customers following years of underinvestment. This document provides context and rationale for IW’s projected capital requirement of €39.0m to deliver the required Information Technology (IT) and Business Change projects during the Interim Price Control period 2014 to 2016. This submission builds on the work completed by the Irish Water Programme (IWP) which delivered a number of Business Critical systems to support the High Performance Utility model (HPUM) and the key processes required by the business. They included:

Asset Management systems to manage work effectively;

Customer Applications to manage meter reads, instigate planned work, and support the customer contact centre, customer billing and any customer related processes;

Financial and Planning systems to manage financial transactions and supply chain information;

HR Systems for the effective management of the IW workforce;

Enterprise application suites to allow the enterprise to communicate and collaborate internally as well as externally;

A SOA Integration Suite to allow all the applications to transfer data safely and securely between each other;

Underpinning technology, data, communications and security layers to support all the above applications.

All of these systems were delivered within a very demanding timeframe. While the core infrastructure and systems are now in place, the challenge for IW over the Interim Price Control period is to build on this foundation to:

Deliver IT and Business Change initiatives which are needed but that could not be delivered within the scope and timeline of the IWP;

Build on the core IT and Business capability to drive business and process improvements in asset operations and service delivery activities.

These projects can be classified into the following categories:

Environmental/Market/Regulatory

These are IT projects that will be required to meet regulatory, environmental and market requirements. For example, system requirements arising from the Water Framework Directive (WFD) and market based projects to improve the customer interactions with IW.

Run - Mandatory

These are projects that will be required to maintain and keep the current existing IT landscape and the projects required to support IW in optimising the execution of its business processes.

Business Requirements/Projects

These are projects covering new technology to support growth or projects that are required by the business but could not be delivered within the timeline of the IWP (e.g. Business Intelligence). Water and Waste Water Service Transformation Projects

These are the transformational IT projects that will change and improve the way in which IW will deliver water and waste water services to its customers.

Project and Change Management

In order to deliver the above IT initiatives and other business change projects on schedule and on budget, it is critical to invest in effective project management. The scale of the change effort will require additional specialist


support to fill key project roles. IW will procure this support from the market to ensure that it is delivered in the most efficient manner possible without increasing enduring headcount. Local Authority Change Delivery

In 2014, IW will launch a project to define how IW and the LAs will work together to evolve the water industry model and maximise efficiencies over the term of the Service Level Agreement (SLA). This initiative, and other change projects must be delivered in partnership with the LAs, and will require investment in resources.

Table 1 provides a summary outline of the investment requirement by project category over the Interim Price Control period.

Q4 2104

€m 2014 €m

2015 €m

2016 €m

3 Yr Total €m

Environmental/Market/ Regulatory 0.3 0.9 2.6 2.5 6.0

Run – Mandatory 0.6 2.8 2.4 2.2 7.3

Business Requirements & Business Projects 0.8 3.3 3.0 1.0 7.3

Water and Waste Water Service Transformation Projects 0.3 0.9 1.8 2.1 4.8

Project and Change Management * * 3.9 1.8 5.6

Local Authority Change Delivery * * 3.9 3.9 7.9

Total 2.0 7.9 17.6 13.5 39.0

Figure 1: Breakdown of Proposed Investment by Category.

* 2014 Covered in IWP Budget

The Interim Price Control period is a critical period of change for IW. The HPUM, which was delivered through the Establishment Programme, will be fully embedded and IW will begin to work with the LAs to drive efficiency and service improvements. Transitioning from 34 operating models to one national utility will not be easily achieved. Serious challenges exist in relation to data collection and analysis, the implementation of standardised systems and processes, and the delivery of improved business performance. Appropriate investment in IT and Business Change initiatives will be crucial to ensuring that IW can deliver on its vision of building a national water utility that will provide safe, affordable, and environmentally compliant water services to all customers.

2 Overview

This section of the submission provides a brief outline of the IT and Business Change functions within IW and the key areas of focus during the Interim Price Control period. Details of headcount and Opex costs (payroll and non-payroll) are provided separately in the Target Operating Model document (IW-IPC-007) and are not repeated in this paper.

2.1 Context In recent years Ireland’s water industry has faced significant challenges in the provision of safe and reliable drinking and waste water services. There has been significant under-investment for several decades and the network has suffered from little or very poor data collection, inconsistent asset analysis, varied local application of policy and standards, ad-hoc investment planning and limited application of true risk metrics. As a result, many customers do not receive the water quality or service levels that should be expected in a modern economy. IW is committed to its goal of delivering safe, affordable and environmentally compliant water services to all customers. This goal will depend heavily on IW working with the 34 LAs to deliver on Annual Service Plans (ASPs) and improvement initiatives given the continued and central role of LAs in delivering drinking and waste water services across Ireland. This collaboration places significant emphasis on successful ‘change delivery’ i.e.


sustaining organisational, process and technology changes in the way the industry operates and interacts with IW to deliver water and waste water services. The IWP has already delivered the following systems and capability to IW:

Asset Management systems (including Oracle Project Costing, Primavera, Maximo, Click, Syclo, GIS) to manage work effectively. These systems hold asset data such as asset hierarchy, WPRN and water meter data. They are also used to manage project costs and prerequisites. These systems will be used by LAs and will support business capabilities such as Major and Minor Capital work, re-active maintenance, planned maintenance and the metering programme;

Customer Applications (including Oracle CC&B, MDMS, UC4, GIS, Documaker, and Customer Self Service Portal) to manage meter readings, instigate planned work, generate bills, manage customer contact and manage and plan the bill scheduling window. These systems will support the customer contact centre, customer billing and any customer related processes;

Financial and planning systems to manage Financial transactions and Supply Chain Information (including Hyperion, Oracle EBS – Accounts Payable, Purchasing, Cash Management, Project Costing, Fixed Assets, Accounts Receivable, iExpenses, Oracle Time and Labour, iSourcing). These systems will support the full supply chain and will be used to assist the business in having full transparency and management of costs. LAs will use these systems to procure on behalf of IW;

HR Systems (including Core HR, Core Payroll and Core Expenses) for the effective management of the IW workforce;

A suite of other run mandatory Enterprise application suites (including MS Exchange, MS Offices, MS Sharepoint, Active Directory and others) to allow the enterprise to communicate and collaborate internally as well as externally;

A SOA Integration suite to allow all the applications to transfer data safely and securely;

Underpinning technology, data, communications and security layer to support all the above applications.

All of these systems were delivered on time and on budget in a hugely compressed timescale. While much has been achieved, not all of the IT systems and functionality that IW requires could be delivered within the scope of the IWP. The challenge for IW over the Interim Price Control period is to deliver the additional capability required to fully support the HPUM and to seamlessly align all system and process changes with the LAs.

2.2 Role of IT and Business Change IW’s IT and Business Change functions will play a central role in coordinating the successful delivery of these initiatives across IW and the LAs. The functions will together maintain the integrity of, and improve, IW’s operating model by defining, governing and managing a portfolio of non-construction (IT, systems, and business process) related projects. The IT function will build on the achievements of the IWP to deliver those necessary systems which are not yet in place (e.g. Business Intelligence, SCADA & Telemetry etc). It will also deliver the projects which are required to maintain the existing IT landscape (e.g. patching, security etc) and bring enhancements where justified (e.g. to meet compliance requirements). The Business Change function will bring best practice project, change and process management methods and tools to deliver these programmes on time and to budget thereby driving business benefits. It will also ensure that systems and process changes are rolled out successfully to the LAs to deliver on standardisation and process initiatives.

2.3 Irish Water IT Function The IT function within IW is responsible for the establishment and development of IT capabilities and systems, supported by Shared Services IT and Group IT. Further details on Shared Services and Group support are provided in the following documents:

Shared Services Cost Submission: IW-IPC-008; and

Group Centre Cost Submission: IW-IPC-009.


The IW IT function is responsible for running, enhancing and operating the IW IT systems and exploiting its core competencies in business/IT Strategy, solution delivery, service management and Infrastructure and Operations Management. A high level overview of the key activities is provided in Figure 2 below.

Figure 2: Key Activities of IW IT Function.

2.4 Irish Water Business Change Function IW’s Business Change function is critical to the successful delivery of IW’s efficiency and improvement initiatives. It will drive budget and benefits management in all aspects of initiative delivery, ensuring that IW is able to track and manage the delivery of the overall IW Benefits Case. The Business Change function is divided into three key areas of activity: Portfolio Management; Change Delivery; and Process Optimisation. A brief description of each is provided below: Portfolio Management

Prioritising and sequencing the business project portfolio based on cost, implementation effort and contribution to key internal and industry targets. This involves working with IW to clearly identify project value drivers against business strategy, and identify and proactively manage portfolio risks, issues, dependencies and resources. Change Delivery

Effectively planning and delivering all people, process, and technology-related change initiatives impacting both IW people and LAs. This also involves establishing an effective communications and change network within the LAs to replace the current Programme Team. Process Optimisation

Ensuring the integrity of IW’s end-to-end business processes by assessing all business change impacts from a process perspective. This involves working with projects and business process owners to implement and sustain changes to processes based on best practice and the business value required. Process Optimisation will also lead the project to closer align the business process model of IW and the 34 LAs in order to deliver on standardisation and efficiency initiatives.

2.5 Key Areas of Focus In the period 2014 to 2016, the IT and Business Change functions will focus on the following key priorities:

Supporting Environmental and Regulatory Requirements – business process and IT system

changes will be required to comply with environmental regulation as set by the EU and Environmental Protection Agency (EPA) as well as economic regulation set by the Commission for Energy Regulation (CER).

“Change and Run Services”

IT

STRATEGY

SOLUTION

DELIVERY

Aligns the IT architecture and plans with the business priorities and ensures that IT resources are deployed

appropriately to fulfil demand

Develops IT services that provide sustainable value to the business by maximising benefits and minimising one-

off and on-going delivery risk

SERVICE

MANAGEMENT

Delivers reliable IT services to the business while improving quality and efficiency through external comparison and an unrelenting

focus on continuous improvement

SUPPLIER RELATIONSHIP MANAGEMENT

Builds trusting relationships with 3rd

party providers that enable seamless working relationships and drives cost effectiveness and high performance throughout the contract lifecycle

Understands the business priorities, supports strategic & innovative thinking through clear articulation of IT capabilities, filters customer demand and manages expectations on development


Enhance Customer Service – IW will seek to improve services provided to the market and will continue

to strengthen its on-line presence to enhance customer service and experience through the provision of on-line self-service features.

Improving IT Support to Business Decision Making Process – there will be a critical focus on

improving organisational and technical capabilities in the management and exploitation of information. This will enable business users to utilise information to make informed and timely planning, management and operational decisions. These improved information capabilities will support both water and waste water network management, health and safety management, and general business management.

Consolidating and Building the IT System Landscape for Waste and Clean Water Management -

during the period 2014–2016, IW will focus on improvement initiatives which will initially centre on SCADA and telemetry systems that can be augmented to commence the journey to a central control room.

Support Financial Management and Control Initiatives – IW will focus on gaining efficiencies through

Optimisation and Consolidation initiatives.

Local Authority Change – defining the LA operating vision and implementing a series of change

initiatives to drive standardisation and process improvement.

Support the Meter Roll-Out Programme – all enhancements made to IT systems that support the

metering roll-out will be rigorously tested to mitigate any risk to the programme.

Research and Development – IW will monitor new and emerging technologies in the field of utilities to

ensure the capital investment in key applications is optimised. IW will leverage the IT investments already made (by reusing or customising applications where appropriate) to facilitate changing business needs. As a result, Capex is only being sought for those initiatives where investment has been identified as the optimal solution. Where Capex is necessary, IW will seek to drive savings through leveraging the scale of Bord Gáis Éireann (BGÉ) where possible.

3 Capital Projects

Table 3 presents a summary of the required IT and Business Change Capital Investment over the Interim Price Control period. Each of the project categories and costs are explained in more detail below.

Q4 2104

€m 2014 €m

2015 €m

2016 €m

3 Yr Total €m

Environmental/Market/ Regulatory 0.3 0.9 2.6 2.5 6.0

Run – Mandatory 0.6 2.8 2.4 2.2 7.3

Business Requirements & Business Projects 0.8 3.3 3.0 1.0 7.3

Water and Waste Water Service Transformation Projects 0.3 0.9 1.8 2.1 4.8

Project and Change Management * * 3.9 1.8 5.6

Local Authority Change Delivery * * 3.9 3.9 7.9

Total 2.0 7.9 17.6 13.5 39.0

Figure 3: Breakdown of Proposed Investment by Category.

* 2014 covered in IWP Budget


3.1 Environmental/Market/Regulatory

These are projects that will be required to meet regulatory and environmental requirements and improve the delivery of services to the end customer. A total of €6.03m Capex is needed for these capital projects which are grouped under the following sub-areas:

Regulation and Commercial; Customer and Customer Experience; Finance; Operational Planning and Control; Health and Safety.

3.1.1 Regulation & Commercial

Capital requirements in this area are outlined below:

As IW begins to “stand-up” and take ownership of the assets, one of the main requirements of the business will be to facilitate reporting and compliance in relation to the environmental and regulatory requirements of the business. One of the first challenges will be driving solutions and processes on data collection and cleansing to enable the required data capture;

Compliance with the Waste Water Discharge Licence granted by the EPA in January 2014, requires the licensee to develop a data management system and a public communications programme to ensure members of the public can access environmental information relating to discharges – as a result, provision needs to be made for accessibility of waste water treatment plant data on the IW website;

EU Infringement Case No. 2013/2056 - the outcome of this case will potentially result in more information to made publicily available, including information per region.

Capex Costs: €1.29m

Benefits: Compliance with mandatory regulatory and environmental driven requirements.

3.1.2 Customer and Customer Experience – Online Customer Services

This project will facilitate the improvement of the provision of online self-service features to end users to increase customer propensity to pay, enable cost savings, and improve levels of customer satisfaction. The range of mechanisms by which online customer services can be provided to IW’s customers include web-channels, mobile applications, SMS, phone and email. This will allow IW to move from re-active to pro-active customer contact management and gain operational efficiencies while improving the customer experience. The scope of this project will include the following:

Introduction of alternative digital channels to reach out to customers including enhanced linkages between Interactive Voice Response (IVR) and business applications resulting in better customer information in relation to outages;

Increasing IW’s online presence and providing self-service features to customers to enable them to manage their arrangements with IW online;

Introduction of an IW mobile application to support the arrangement and rescheduling of appointments, service status updates, and on-line payments for all services offered by IW directly to its customers;

Sharing more information with customers through the IW website and mobile applications;

Development of the Customer Charter and the systems and reporting to support the initiative;

Customer Application Audit improvements to ensure that fraudulent activity is captured on time.



Benefits: Improved customer service, customer propensity to pay, and enhanced services provided to the market. This solution will enable IW to monitor the customer experience and to prioritise improvements. The proposed solution should improve operational efficiency by increasing the percentage of outbound calls and reducing the number of inbound calls to the call centre. The initiative should also result in improved data quality. Furthermore, user experience will be enhanced through increased functionality on the IW website including a variety of self service options.

3.1.3 Finance - Delivery of System Enhancements to Drive Economies of Scale

A major objective in setting up IW is to achieve economies of scale as we move from 34 disparate LAs to one national utility for the provision of water services. The financial system and the controls that it provides in supply chain management, project costing (project budget), and initiatives around optimisation, will be critical to success. A project is required to roll-out further financial process improvements and associated reporting requirements to the LAs. During the Interim Price Control period IW will also have to react to any budgetary or tax changes (e.g. PSWT, TCC guidelines etc). This will involve further IT system modifications. Capex Costs: €0.71m

Benefits: improved financial controls and reporting in the area of the supply chain and improved budgetary

control on major and minor capital works. A central procurement system will also provide the ability to analyse suppliers and purchasing trends and drive economies of scale through targeted procurement processes.

3.1.4 Operational Planning and Control

To support collaboration on service delivery, IT systems and infrastructure will be used by LA staff to support IW processes. Enhancements are required to the current systems to support operational activity, work management, scheduling and reporting. In addition to driving continuous improvements in how work and work crews are scheduled, this project will involve the:

Enhancement of systems to ensure LAs can capture required data;

Facilitation of multiple asset locations on a single work-order, allowing for better and more optimal scheduling;

Development of a work break-down structure to support the LA work practices;

Roll-out of secure handheld devices to the LA users;

Development of a Mobile GIS platform;

Enhancement of the systems to leverage and report on LA KPIs and SLA performance. Capex Costs: €2.09m Benefits: improved operational controls and greater visibility of work being done by the LAs on behalf of IW. This will allow IW to focus on driving greater efficiency in how work is managed and delivered. Other important benefits will include improved reporting, data capture and cleansing, and streamlining of processes where feasible.

3.1.5 Health & Safety - Consolidate and Enhance Laboratory Information Systems

A key objective of IW is to provide safe, affordable and environmentally compliant water services to all customers. This project will seek to consolidate and enhance the Laboratory Information Systems to facilitate nationwide reporting, trending and analysis and to drive standards in quality testing.


Benefits: Improved test capture and reporting with a longer term vision of enabling forecast trends on water

quality etc.


3.2 Run - Mandatory These are projects that will be required to maintain the existing IT landscape and to support IW in optimising the execution of its business processes. A total of €7.33m Capex will be needed for these projects which are grouped under the following IW business areas:

Customer;

Workflow, Asset Operations, Asset Management;

Finance and HR;

Health, Safety, Quality and Environment (HSQE);

Reporting;

Infrastructure Projects (across all business areas).

3.2.1 Customer - CC&B/MDM/UC4 Patching and Enhancements

IW will continue to invest in its customer application capabilities in order to:

Drive innovations in customer capability;

Reduce the cost to serve through customer self service;

Ensure a positive customer experience;

Improve performance. During the period 2014 to 2016 the following initiatives will be implemented:

Scheduled security patching required in that period;

Enhanced data capture and data cleansing initiatives to build a full database of customers that will allow for accurate billing;

Enhanced integration with Oracle EBS for financial control;

Enhanced integration with WAM spplications to allow an end-to-end view of customer related work information.


Benefits: Security patching will mitigate security risks to IW platforms and data; application patching will facilitate

functionality improvements in future releases by the vendor; and enhancements will support changing business needs.

3.2.2 Workflow, Asset Operations and Asset Management

3.2.2.1 GIS Patching and Enhancements

IW has built an integrated IT solution with some applications being core to the capabilities supported. GIS (or ESRI in its enduring state) is one of those applications and is integrated from Customer to Work & Asset Management (WAM) to E-Business Suite (EBS). IW will continue to invest in its GIS application capability in order to:

Drive innovation in its core water and waste water network;

Create a system of record for GIS mapping;

Drive efficiency;

Improve performance;

Improve customer service. During the period 2014- 2016 the following initiatives will be implemented:

Further integration with the Maximo WAM solution to provide visibility of Work Orders in GIS;

Integration between GIS and Pipeline Risk, Condition Assessment, and Data Alignment System;

Provision of GIS online data access from the field which will improve field data capture capabilities;

Any security patching required in that period. Capex Costs: €0.80m


Benefits: Security patching will mitigate security risks to IW platforms and data; application patching will facilitate functionality improvements in future releases by the vendor; and improved integration will bring greater efficiencies in work practices.

3.2.2.2 WAM/FM (Maximo, Click, Syclo)

The WAM/FM applications are core to Asset Management and Operations within IW and IW will continue to invest in these applications in order to:

Drive innovation in its core water and waste water network;

Drive efficiency in the operation and scheduling of work;

Improve performance. During the period 2014- 2016 the following initiatives will be implemented:

Scheduled security patching required during this period;

Enhanced data capture and data cleansing initiatives;

Further integration with Oracle EBS for financial control. Capex Costs: €0.75m Benefits: Security patching will mitigate security risks to Irish Water platforms and data; application patching will

facilitate functionality improvements in future releases by the vendor; and data cleansing and gathering efforts will result in longer term benefits in decision making. Further integration with financial applications will also result in greater project budgetary control.

3.2.2.3 Primavera, PC6, OSI Pi enhancements and Patching

Primavera and PC6 are core to Major/Minor Capital process and IW will continue to invest in these applications. During the Interim Price Control period the following initiatives will be implemented:

Any security patching required in that period;

Enhanced data capture and data cleansing initiatives;

Further integration with Oracle EBS for financial control;

Further integration with WAM/FM to enhance the operations of Major Capital programmes. Capex Costs: €0.58m

Benefits: Security patching will mitigate security risks to IW platforms and data and application patching will

facilitate functionality improvements in future releases by the vendor. Further integration and refinement of the solution between WAM and Oracle applications will ensure project controls and efficiencies where possible.

3.2.3 Finance and HR - Oracle eBusiness and Hyperion Applications

Oracle Financials is IW’s core accounting system, allowing IW to conduct and manage its financial affairs as well as augmenting procure to pay, project and asset portfolios and accounts receivable business processes. In order to leverage the investment already made, it will be necessary to conduct a number of “family pack” updates and enhancement projects. These projects will mitigate security risks and will allow IW to take advantage of functionality improvements/corrections introduced by Oracle.

This includes provision for the following:

Improvement of the TCC process;

Introduction of an Intercompany custom solution between various business units;

Support to initiatives that will be introduced as part of the Procurement Optimisation Project;

Further integration with the WAM/FM applications;

Hyperion patching and enhancements to deliver the reporting needs of the business;

Any changes to HR systems required as a result of legislation or budgetary changes.



Benefits: Security patching will mitigate security risks to IW platforms and data and application patching will

facilitate functionality improvements in future releases by the vendor.

3.2.4 HSQE - Implementation of Integrated Quality Management System

Capital investment is sought to support and enhance the HSQE module of the WAM/FM suite to provide the required level of integration with IW business applications. Costs: €0.35m Benefits: Improved document control and compliance across the organisation enabling the achievement of key certifications. In addition, the removal of manual tasks will allow for efficiencies and streamlining of operations.

3.2.5 Reporting - Development of Reporting Capabilities

This project is required to cater for the Interim Price Control period before full Business Intelligence (BI) capability is provided. It will allow reporting to be delivered from the native applications or provide for required enhancements in support of the Data Visualisation tool provided to the business and assist with:

Tactical LA SLA & KPI reporting;

Customer data management dashboards;

Learning & Development role matrix reporting;

KPI reporting for available procurement data from LAs;

Reports for managing costs & efficiencies of plants (which are currently stored on spread sheets) thus improving capital Investment planning.

Capex Costs: €0.50m Benefits: This investment will position IW to be able to deliver ad-hoc reporting requirements and improve the dataset to inform operational and tactical decision making.

3.2.6 Infrastructure Projects

3.2.6.1 IT Infrastructure Projects

A project is required to implement the following initiatives which will assist increased staff productivity, improve back up performance and collaboration, and improve networking and communications related infrastructure assets:

Operating System and Browser Patches;

Networking and communications related initiatives;

Data Storage and Disk Management;

Back-up enhancement initiatives;

Data Archiving initiatives;

Patch and Configuration Management;

Data Leakage.


Benefits: These projects will ensure that IW maintains the currency and supportability of the IW desktop and

laptop estate and avoids the support and security related issues associated with running unsupported versions of software products. By patching the operating system, IW will benefit from enhanced features and operating system functionality. In addition, this will ensure that there is a reduced organisational exposure to security risk. IW will require capacity and capability to deal with ever increasing data growth as a result of business drivers. Lower storage costs will be achieved through reduction in instances and volume of data held. These improved back up processes will also enable operational efficiencies.


3.2.6.2 Security Related Initiatives

Maintaining the security of IW’s systems and data is an area of critical importance. Investment is required to implement the following initiatives in order to maintain sufficient levels of security in relation to the IW network:

Continuous improvement of the Network Access Control System is required to ensure security on the IW network;

Improve monitoring of the network to identify malicious activities or policy violations;

Implementation of a Data Classification and Protection System is required to improve the way in which data is managed and shared;

Privileged Access monitoring;

Vulnerability Scanning.

Capex Costs: €0.90m Benefits: This project will enhance security of the IW network to protect from unauthorised access and increasing levels of cyber crime. It will also provide greater control of 3

rd party access to the IW infrastructure.

The delivery of this solution will reduce the risk of potential market and reputational damage.

3.3 Business Requirements & Business Projects This section of the document outlines the investments required for new technology to support the growth and expansion of the business. A total of €7.31m Capex is required for these projects under the following IW business areas.

Workflow;

Business Intelligence (across all business areas);

Infrastructure Projects (across all business areas);

Customer;

Facilities.

3.3.1 Workflow - Implementation of Data Quality Management Tool

This project will implement a data quality management tool which is required to address the core functional requirements of the data quality discipline including:

Profiling, Parsing and Standardisation;

Generalised "cleansing";

Matching, Monitoring and Enrichment. IW business applications have complex data structures. The technical capability is required to put data quality processes and systems in place in order to generate data quality improvements and efficiency gains. Capex Costs: €0.35m

Benefits: improvements in data provided to internal and external stakeholders (including the Regulators). Customer service will also be improved due to enhanced data quality leading to faster call handling on inbound queries. The results of this project will also lead to better information for long term planning.

3.3.2 Business Intelligence – Development of Capabilities

The IWP introduced a suite of enterprise-wide applications however Business Intelligence capability was outside the scope of the Programme. Capex is required for the following key initiatives to develop organisational capabilities in data management and governance, to begin to consider an analytics approach across the organisation, and to improve and maintain operational and management level reporting capabilities:

Build an Extract, Transform and Load Layer to allow the data from the enterprise applications to be extracted, transformed into reportable data, and loaded into a reporting warehouse;

Deliver a suite of complex reports to facilitate the business in self-reporting;


Establish a Business Intelligence Competency Centre (BICC) to work with IW business functions to identify the key business insights required and to collaborate with them to deliver required analytics and modelling capabilities;

Deliver a Management Information capability (including Operational Reporting and Management Reporting) to business areas via Data Warehouse and Operational Systems;

Review and develop KPIs within business functions and deliver a Performance Management System via dashboards and drill-down capability.

Capex Costs: €2.46m Benefits: These projects will result in improved information and will facilitate provision to the point of decision making (including provision of information to a mobile decision maker). This investment will also better position IW to deal with the increased volume and complexity of data as the business matures.

3.3.3 Infrastructure Related Projects

3.3.3.1 Desktop and Hardware Refresh

This requested capex will support the refresh of the IW hardware components including

Deskside Refresh;

Infrastructure Refresh;

Telephone, VC, Data Centre, handhelds;

Business Continuity Planning.


Benefits: Mandatory cost associated with our PC replacement and refresh policies and the approach to LA roll-out.

3.3.3.2 Sustainability & Green IT Related Initiatives

Energy efficiency and environmental considerations (‘Green IT’) will be a key measure for IW’s IT function. Rising energy costs are resulting in an increased focus on the operating costs associated with the day-to-day operation of IT. IW aims to operate its infrastructure estate in an energy efficient manner. Capex is sought to conduct a best practices assessment and energy audit on existing data centre facilities, to address recommendations/remedial activities arising from the audit, and to implement a PC Power Management solution for the IW desktop estate.


Benefits: This project will develop further sustainability capabilities and target cost savings in the operation of

PCs etc. through increased energy efficiency and reduced energy consumption. This initiative also supports the sustainability values of IW.

3.3.4 Customer - External Credit Vetting and Integration with Oracle CC&B

This project is required to provide system integration between CC&B and external credit vetting agencies so that credit rating information can be leveraged. As IW will begin to bill in January 2015 for Q4 2014, debt management will be a key system requirement from Day 1. This process will support the business in making informed decisions at the time of agreeing credit/payment arrangements with the customer.

Capex Costs: €0.25m Benefits: improved financial credit control checking which will allow the business to make informed decisions when making credit/payment arrangements with customers.


3.3.5 Facilities – IT Facility Related Projects

This project will support the “kit out” of IW Headquarters and the IT requirements of the enduring buildings during the Interim Price Control period including:

Network Operations Centre control room;

Network Operations DR site idenfication & design;

IT Disaster recovery (site based server backup);

Uninterrupted power supply (e.g generator backup);

Regional setup and upgrade;

Audio visual and video conferencing;

Cisco Network – Telephony, LAN and wireless technology;

PC and data room configuration and set-up;

MFD’s;

Tape back-up units.

Capex Costs: €2.6m Benefits: All IW buildings will be IT ready to support the enduring business through a unified data and voice network with 24/7 access to our primary data centres, disaster recovery sites & BCP facilities. This integrated approach to IT and communications will support maximum availability for IW users in HQ and the 8 regional offices.

3.4 Water and Waste Water Transformation Projects

This section of the document outlines the projects that will change the way the business currently operates. These projects focus on improving operational capabilities, efficiencies, and organisational effectiveness. A total of €4.8m Capex is required for these initiatives within the following IW business areas:

Asset Management;

Infrastructure Projects (across all business areas);

Customer.

3.4.1 Asset Management – Implementation of Predictive Maintenance and Asset Analytics

This project will support the improved functional and technical capabilities needed to drive insights from data to improve operational results across the organisation. It will define the detailed business process requirements and adaptation of relevant tools to deliver predictive maintenance and asset analytics capability across IW. The overall objective of this investment is to enable the IW organisation to make better use of available information in the decision making process and could potentially allow works to be scheduled as a result of ‘Continuous Flow’ analysis.

This project also includes a provision for the selection and implementation of a Statistical Data Analysis and Modelling tool which will further enhance IW ’s overall Business Intelligence capabilities. It is expected that this initiative will support IW in reducing the frequency of failures/safety related incidents, reduce cost of ownership and maintenance effort over the life of an asset, and improve the understanding and use of analytics in IW operations. Capex Costs: €0.80m Benefits: reduced frequency of failures / safety related incidents resulting in lower cost of ownership and

maintenance effort over the life of a system. Embedding analytics capabilities into IW operations will allow for organisational and technical capability to drive insights and action from available data.

3.4.2 Water and Waste Water Operations – Commence the SCADA/Telemetry Strategy

Supervisory Control and Data Acquisition (SCADA) is a system that allows an operator at a master facility to monitor and control processes that are distributed among various remote sites. A properly designed SCADA system saves time and money by eliminating the need for service personnel to visit each site for inspection, data


collection/logging, or adjustments. In addition to real-time monitoring and system modifications, other potential benefits of SCADA systems include:

Reduced operational costs;

Provision of immediate knowledge of system performance;

Improved system efficiency and performance;

Increased equipment life;

Reduced costly repairs;

Reduced number of man-hours (labour costs) required for troubleshooting or service;

Release of manapower for other tasks;

Facilitation of compliance with regulatory agencies through automated report generating.

All LAs are equipped, to some degree, with SCADA systems. These systems vary in their degree of sophistication but many include PCSLs (Programme Control Logics) which indicate, at least, the capacity for both automated control and intervention by way of HMI (Human Machine Interface).

In addition to the hardware on site, the means of communication also needs to be considered. The way the SCADA system network (topology) is set up can vary with each system but there must be uninterrupted, bidirectional communication between the MTU and the RTU for a SCADA or Data Acquisition system to function properly. Within the current SCADA topology around the country, this has been accomplished in various ways, i.e. telephone, radios, modems, microwave dishes, satellites, or other means, and many times, systems employ more than one means of communicating to the remote site. This may include dial-up or dedicated voice grade telephone lines, DSL (Digital Subscriber Line), Integrated Service Digital Network (ISDN), cable, fiber optics, WiFi, or other broadband services. The IWP has been tasked with delivering a strategy which will position the enduring IW IT Team to bring all these disparate systems together to build a SCADA/telemetry solution for IW.

IW will begin building a roadmap towards a central control room by undertaking the following:

A discovery of what software and hardware is already on site;

A discovery of the communication protocols in plants around the country;

Standards – set out the standards that future equipment must meet before it is installed in plants;

Connecting a small number of SCADA systems directly into a preliminary communications centre;

Introducing a SCADA and telemetry system strategy;

Introducing SCADA and telemetry data management;

Introducing SCADA and telemetry communications and data presentation layer;

Other Engineering systems discovery.

This work is needed as a step towards the vision of a central control room. The budget requested will be reviewed based on the scope of the work determined by the national SCADA strategy.

Capex Costs: €3.5m Benefits: Working towards a vision of a national SCADA solution, this work will determine the level of complexity and diversification of systems nationally and will deliver an interim solution of providing control in one central location.

3.4.3 Customer – Tariff Harmonisation for Non Domestic Customers

Non-Domestic billing will commence with approximately 500+ tariffs. This will be unsustainable in the longer term. If a harmonised tariff is introduced, IW will be required to develop a solution, modify the customer data and implement new billing cycles to cater for a more refined and simpler billing schedule. Capex Costs: €0.5m Benefits: The number of tariffs in the billing run will be reduced thereby making future changes easier to

implement.


3.5 Project and Change Management Each of the projects outlined in the sections above will involve a significant degree of project and change management effort involving systems, data, processes, and people. IW’s Business Change function will support this effort but the scale of the required initiatives will require additional specialist support to fill key project roles. This specialist support will provide robust project management to ensure delivery on time and to budget. In addition, careful change management will ensure that each project is successfully embedded within the business and that the benefits are secured as quickly as possible. A key focus will be on driving process optimisation. This will be of critical importance to IW as the business seeks to standardise and improve operations across the 34 LAs in line with the HPUM. IW’s business change function has been designed as a very lean function and the procurement of external specialist support has been identified as the most efficient, and flexible, means of delivering key change programmes. This support can be ramped up or down depending on the roll-out schedule of the various initiatives and will bring best practice from other utility organisations. IW has been designed and established to become a HPUM. The challenge during the Interim Price Control period is to ensure that this model is implemented. Effective project and change management is an essential requirement to drive progress and deliver benefits. Capex Costs: €5.61m Benefits: Effective project and change management will drive delivery on time and on budget and will help

ensure that the benefits of each initiative are secured at the earliest opportunity. A focus on process optimisation will ensure that efficiency is embedded into each project deliverable and that a solid foundation is laid for continuous improvement.

3.6 Local Authority Change Delivery At present change management activities associated with deploying IW’s Customer, WAM and Support Services capabilities to LAs are undertaken by a team of approximately 8 centralised and 52 localised Change and Project Management Specialists under the IWP. The role of this team is to conduct LA change impact and business readiness assessments (specific to each LA) for each business initiative. Relevant system and process training and targeted communication and stakeholder management activities are then delivered based on the findings of these assessments. These local teams develop close relationships with each LA, understanding their specific ways of working and helping to manage and mitigate the process, organisational and technology change required for each project deployed by IW. The teams provide great benefit to the LAs by supporting their dialogue with IW and acting as a ‘single point of contact’ back into the business for concerns or queries. IW’s Business Change function will assume the role of the IW Establishment Programme’s Central Change Team from mid-2014. The Programme is expected to continue to fund the localised team of Change Specialists throughout 2014 albeit on a reduced Full Time Equivalent (FTE) basis. While the finalised suite of initiatives impacting the LAs over the period 2014-2016 has yet to be agreed, the initiatives deployed by IW’s individual business functions are expected to have varying degrees of impact and dependency on each of the 34 LAs. These initiatives, also noted within other submission documents, include:

Development and Implementation of Key Operational Plans across each LA – including Wastewater

Incident Response Plans, Drinking Water Incident Response Plans and Water Safety Plans;

Establishment of Key Internal and External Reporting Mechanisms including those supporting

compliance and health, safety and quality management;

Development and Rollout of Standard Operating Procedures (SOPs) across the LAs;

Implementation of Operational Initiatives including a revised laboratory strategy, fats, oils and grease

campaigns, trade effluent monitoring, water loss management, plant performance improvement, planned & preventative maintenance and treatment optimisation;

Implementation of Technology Initiatives including an enhanced SCADA, telemetry, SharePoint and

Geographical Information System (GIS);

Procurement & other Optimisation Initiatives including category management, P cards, supply chain

optimisation, inventory management and DBO contract negotiation;

Establishment of Core Support Processes including a standardised accounting and budgeting

process across the 34 LAs;

Development of the Customer Relationship through LAs including customer contact redirection and

branding changes to facilities, signage, uniforms, safety equipment, ID cards and the website;


Transition to a Regionalised Management Model;

Tactical and Continuous Improvement Initiatives;

Implementation of Data Collection Initiatives.

Given the level of change required to successfully deliver the benefits associated with each of these initiatives, it is anticipated that the current level of local change management support within the LAs (approximately 0.5 FTE per LA) will need to be maintained. It is also expected that the change management associated with these business initiatives will be delivered by the current team and funded by the IW Establishment Programme in 2014. A Capex allowance will be required for IW to continue this support into 2015–2016. In addition, in 2014 IW’s Business Change function will launch a project to define how IW and the LAs will work together to evolve the water industry model and maximise efficiencies over the term of the SLAs. This project, known as the Local Authority Operating Vision, will be the blueprint for the successful partnership of the LAs and

IW and will identify the series of change initiatives required to deliver on IW’s Benefits Case to 2021. The total cost of deploying change delivery resources to the 34 LAs, coupled with the investment in an industry operating vision, is outlined below. Capex Costs: €7.88m Benefits: The Local Authority Operating Vision will provide a blueprint for maximising efficiencies over the term of the SLA. Continuance of the change management support to LAs over the period 2015 to 2016 will ensure that the planned initiatives are delivered on time and to budget, in a coordinated manner, to produce the required benefits. The successful deployment of IW efficiency and standardisation initiatives to the LAs is critical to the success of IW and, ultimately, the delivery of value to the IW customers. The scale of change is ambitious, will not be easily achieved, and requires careful management and co-ordination. Investment in LA change delivery is essential to ensuring success.

Documents

IT and Business Change Capital Expenditure · 2019-01-24 · Hyperion, Oracle EBS – Accounts Payable, Purchasing, Cash Management, Project Costing, Fixed Assets, Accounts Receivable,