Case study: Making the case for business process management

Jim Woestman, Cinergy Power Generation Services

In mid-2000, Cinergy Power Generation Services established a cross-functional core team of engineers, project managers and supervisors to identify and re-engineer several key business processes. Their goal was to get the right information, to the right people more quickly for these processes, allowing more time for the engineers to do their primary function–engineering.

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The core team, which is part of Cinergy’s Energy Merchant Business Unit (EMBU), met on a weekly basis and created a prioritized list of the top 10 critical business processes. Once completed, an EMBU steering committee, which included management and engineering personnel, was created to oversee the redesign of each process.

Ten Optimization Teams were created with one team assigned exclusively to each procedure, allowing each team to focus on a single process. Over a period of 18 months, a total of 60 employees selected from the affected departments participated.

As the teams compiled their results, the Project Controls Group determined that the company needed an IT solution to help deploy, manage and report on the new and improved business procedures. Accordingly, they evaluated the viability of existing legacy systems and concluded they would not fulfill the requirements. A team of engineers, management and IT personnel mapped the new requirements against their business objectives and created a requirements matrix describing the ideal IT solution.

During the process of gathering and mapping requirements, the team looked at the value proposition. It was important to select a commercially available Business Process Management (BPM) solution that not only met the requirements but also yielded a strong ROI through hard-dollar savings.

A second value proposition was controlling and minimizing total lifecycle cost. A commercial solution that provided a foundation for future expansion, and which could be implemented by Cinergy employees, served as the criteria to select a commercially available tool.

What we did

Using data from the internal requirements matrix and information gleaned from numerous vendors, the steering committee finalized the project goals and requirements. It then developed a detailed RFP for a Project Management and Estimating Tool, known as PROMET. The RFP thoroughly described the processes to be automated, the legacy systems needing integration and the incremental milestones the vendor needed to meet.

At the conclusion of the RFP process, Cinergy awarded the contract to LASCOM Solutions Inc. and their Business Process Management (BPM) solution branded Advitium. Advitium is a package-centric workflow application that automates, controls and traces information through predefined and ad-hoc business processes. It operates in a browser-based environment for both intranets and extranets.

Advitium met the key requirements identified for PROMET:

“- Minimize duplicate entry of information;
“- Standardize the estimating and evaluation processes;
“- Provide the ability to view drawings from any computer without special software and the ability for users to comment on them electronically;
“- Make information more readily available; and
“- Integrate with existing financial, data and drawing vaults.

After being awarded the contract, LASCOM began designing the prioritized business processes: budget, work order and new drawing approval. LASCOM designed intelligent forms with drop-down fields that automatically supply the appropriate data based on the preliminary input entered–eliminating the need for multiple data entry.

Once linked to existing financial, asset management, and drawing vaults, Advitium automatically populates data to and from standard departmental spreadsheets while maintaining version control. It also automatically calculates the financial triggers Cinergy uses to rate and approve project studies, including internal rate of return (IRR), net present value (NPV) and benefit-cost ratio (BCR).

The Advitium-based PROMET tool provides an electronic approval process for budgets and work orders and maintains records of related approvals with complete traceability. What used to take days and weeks, now takes a matter of hours. The system also tracks the progress of all automated, in-house design drafting work for new projects and provides in-depth reporting for project and process analysis.

Future plans

With a successful implementation, Cinergy personnel with assistance from LASCOM are applying the Advitium system to monthly cash flow projections, including the calculation of overheads and loadings. A drawing information transmittal process to link to outside engineering firms is also being developed. This will improve process cycle times on collaborative projects.

With Advitium in production, Cinergy evaluated the preliminary benefits of automating the first three of its critical business processes. An internal study of related costs indicates a yearly savings of thousands of dollars, for drawing management, budget estimating, and work-order preparation. Additionally, with the increased accuracy of estimates and projections, as well as the capability for baseline milestone scheduling, cost management has improved overall. With this incremental success in place, Cinergy plans to continue to improve other key processes.

Woestman is manager project controls at Cinergy Power Generation Services.

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