Recently a large Australian power utilities company changed their operating model and reformed the way they manage infrastructure and asset investment. They sought an off-the-shelf Asset Investment Planning & Management (AIPM) solution, and found what they were looking for in Copperleaf C55 and ARMS Reliability.
The Challenge
When the company decided to bring their previously outsourced operations in-house, they sought a smart way to assess investments as part of their regulatory submissions.
For example: Deciding when to refurbish or replace some of your assets may seem obvious when analyzed in isolation, but once investments start competing with other potential projects for resources and budget the decision becomes much more complex.
The organization built an in-house tool to manage their asset investment programs and aid in planning. This tool was used to prove the concept of optimization versus prioritization, and the organization immediately realized business benefits. Yet there was room for improvement.
With the in-house tool came typical traps such as process inefficiencies, data management issues and the inability to handle large amounts of data. They sought a more rigorous system that would expand on their current work, provide greater stability and be able to communicate investment decisions internally and to the regulator.
The
- Quantified
modelling of risk, benefits, severity, consequenceand likelihood over time - Risk governance and reporting
- Investment options assessment
- Investment optimization process
- Portfolio analysis and scenario
modelling - Budget constraints
- Robust reporting for their 5
year and10 year portfolio plans
With these criteria in mind, they selected the three core modules of Copperleaf C55's AIPM platform, implemented by ARMS Reliability. These modules- known collectively as the investment Decision Optimization (IDO) solution- are designed to help organizations develop risk-informed investment strategies for their entire asset bases.
C55 IDO would solve their current challenges and deliver strong value to the business.
The Solution
ARMS Reliability was engaged to complete a hosted implementation of the C55 platform in July 2016. The local project team hit the ground running, with a start date of mid-August and an aggressive plan to have the system up and running by November 14th to support end-of-year reporting.
With a tight schedule and high visability into the organization, the power utilities company rallied. They committed Asset Managers, Network Engineers and Works Program Team Members to the project, who each brought extensive knowledge about various work processes.
Blueprinting was completed with key business stakeholders to review the current process and propose a future state process that incorporated C55. This helped to align C55 within the organization, and helped the organization identify other areas of the business that could be incorporated into C55- such as IT and the gas network.
Within 12 weeks and 3 days, the web-based enterprise application was installed and active for seven users. Their current list of 1,719 investments across 80 portfolios were safely recorded on the platform.
And, within just two weeks of go-live, the savings were evident. During the initial fortnight, the company identified $4 million in savings for the FY17 budget alone. Further analysis identified significant savings for the FY18-FY22 budget, too. C55 allowed easy identification of OpEX investments that were underperforming some candidate CapEx projects. These savings were facilitated by the platform's ability to consolidate all information into one system so that stakeholders could quickly and easily make business decisions.
The Benefits
- Better, faster decisions
With more complete and accurate data, the company can make better decisions on how to control the spend. The ability to compare different investment scenarios makes it easier to do sensitivity and what-if analyses, which in turn leads to informed decision-making. The fact that they completed optimization on both the remaining FY17 spend and their five-year investment plan (FY18-FY22) within four weeks of go-live is tangible proof of this.
- Clear comparison of investment plans
As understood by many portfolio managers, investment plans change. They have already identified key savings from C55 by completing mid-year reviews and optimizations of their plan. The software has allowed them to clearly identify where changes have been made to maximize ongoing savings throughout the year.
- Process efficiencies
By moving from multiple spreadsheets to a centralized, multi-user system, there is more interaction between groups. And, with one source of current information, the investment planning process is much more efficient and effective.
- Clearly defined and consistent business value
With many projects addressing varying risks and needs, it was important for this energy company to be able to compare projects across divisions. C55 provides a platform to consistently apply value to investments, but also to adjust a value framework to pivot as the organization's strategic goals change.
The Future
C55 has more than proved its efficacy. The organization now plans to roll-out the platform to all asset managers so that there will be 23 additional users by the end of 2017. The platform will be used completely for their FY19 budget review, and other areas of the business-like gas and IT are expected to be brought into the tool, too.
Beyond the growth of the platform operationally, they expect to reap much deeper benefits. Based on the insights they have already gleaned, the organization is planning a complete review and alignment of their risk management framework- which would not have been on their radar without the platform.
C55 provides new insights into how they assess value within the organization. Previously measured on financial metrics alone, value is now assessed within a richer framework that includes compliance, environment, safety and more. C55 puts the organization on the front foot to extract maximum value from existing assets, and helps them plan for the future with confidence.
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