Technology redefines a mature market through convergence

Brad T. Nicolaisen, President
et alia llc

The utilities industry is in the throes of converging into a structure in which single source utility and infrastructure providers will offer better quality products and services, faster implementation and an overall lower cost of delivery. The current simple but long-standing subcontract structure in which services are delivered in layers-each layer adding more costs-is no longer required.

“Our vision is to be at the leading edge of the evolving trends facing the utilities industry today,” said Randall Drew, CEO of DUCT Utilities Construction and Technologies. “New delivery models, changing market conditions, and the strategic use of new technologies are forcing utility providers to re-think how they deliver their services.”

DUCT has also recognized the importance of leveraging technology to achieve its business objectives and to deliver on its promise of delivering quality product at competitive prices. With that in mind, DUCT turned to et alia llc, an SAP consulting services firm, to implement an SAP solution that integrates DUCT’s sales and distribution, project services and financial management business processes. The solution provides a unified and holistic approach to running operations, and gives executives greater control over areas such as revenue forecasting, project planning and bid management.

“As a holding company, our objective is to provide end-to-end telecommunications solutions,” explains Drew. “And while we will probably end up acquiring some IT companies-Internet infrastructure companies-along the way, we don’t want to be in the IT business per se. et alia’s SAP expertise, their experience in working with a broad mix of clients, and their ability to implement our solution quickly and for a reasonable cost made the decision easy. We feel very comfortable about the et alia team serving as our CIO, without us having to build an IT infrastructure,” he added.

DUCT is also using et alia’s Remote Online Consulting Service (ROCS), a Web-based program that enables clients to submit consulting requests through the ROCS Web site and receive mySAP.com solutions and answers from et alia’s team of SAP professionals.

DUCT also partnered with ZIM Technologies International Inc., provider of mobile application solutions and et alia business partner. Together, et alia and ZIM are developing an SAP scenario-based interactive wireless solution that will effectively bring SAP to the DUCT employees who need to access key information, instead of them having to search for it. The solution actually converts the SAP system from a pull system, in which users must search for information, into a push system, which delivers the information as needed.

In addition to providing DUCT with a business intelligence solution for its financial and materials management initiatives, the ZIM technology solution serves as a proactive approach that extends beyond prediction by actually managing information and delivering it. ZIM’s Interactive Mobile Messaging Solution is an event-driven management system that connects to any and multiple sources of disparate SAP data, and enables a direct two-way dialogue between mobile users and the corporate system.

“As we grow we will need to be able to project our earnings on a quarterly basis and on an annual basis. We’ll need to know where we are on a project services and construction site, or whether we’re having problems with deliver services,” explains Drew. “The ZIM technology solution will enable us to make sure that as things happen in the business, we have a proactive approach to resolving issues and actually getting ahead of potential issues.”

“Because we are in a merger and acquisition mode, we needed a solution that would allow us to grow rapidly as well as help us manage our resources, while integrating with the financial systems,” said Drew. “Our initial charge was to lay the framework for where we were taking the business. We needed to understand how DUCT was going to operate as a holding company and what operations did we need to integrate besides the financial aspect.”

In addition, to enable each of its subsidiaries to focus on delivery of services, DUCT will manage their human resources, insurance, payroll, operations and other corporate as a single separate entity and within the SAP infrastructure. Drew estimated consolidating these operations will save the company approximately 40 percent in the long run.

“What we really want to get our arms around is the sales and pricing side of the business, which will probably become a reality sometime in the second quarter of 2002,” said Drew. “With our SAP system, we will really be able to have tight control and be able to forecast our revenues. The sales and distribution side ties directly in with our planning on the project services side, which is critical to our business. If a project comes in, we want to have some controls in place to ensure that bids are going out properly. If you bid wrong and you have to deliver on it, you’re just wasting resources,” he adds.

The projected cost savings resulting from DUCT’s SAP implementation are dramatic: Drew anticipated the new technology will result in savings of 5 to 7 percent in materials costs per job, and between 5 and 10 percent on labor scheduling costs.

DUCT Utilities Construction and Technologies Inc. is a telecommunications and utility construction and technology holding company positioned as a single-source utility and infrastructure provider. Nicolaisen can be reached at brad.nicolaisen@et-alia.com. Or call 800-404-8002 for more information.

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