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Public utility modernizes with SAP

A Kansas public utility is implementing mySAP Business Suite. Experts and analysts say SAP implementations can be tedious for public agencies with outdated, highly customized legacy systems.

Executives at eastern Kansas water utility WaterOne are ripping out and replacing 30 legacy systems with mySAP...

Business Suite.

Design of the implementation and execution of that implementation should be flawless and in many cases it isn't.
Mike Dominy,
senior analystYankee Group

WaterOne, a government agency, manages and maintains the water lines and pumps for residential and commercial customers in 15 cities in Johnson County, Kansas. Over the years, the company added various systems to dispatch maintenance workers and to conduct customer service and billing inquiries, resulting in several system bottlenecks, according to Tacoma, Wash.-based TUI Consulting, the lead firm working with WaterOne on the project.

The project, which will combine data located in disparate systems on more than 130,000 customers and streamline business processes, is expected to go live in April.

Once completed, the water utility will have a modernized customer service system in place and a mobile dispatching system, allowing workers to respond to water problems faster and more efficiently, said Todd Crandall, executive vice president at TUI.

"They will now have the ability to schedule and deploy the work out in the field from the front office, greatly improving efficiencies," Crandall said. "They can probably do 30% more jobs in a day [than] before this kind of integration took place."

TUI Consulting has conducted SAP projects at dozens of public agencies in the United States, including a massive $50 million SAP installation for the city of Tacoma, Wash. WaterOne and other public agencies should address software upgrades and major installations differently then private enterprises, Crandall said.

"They're a midsized water district and don't have a lot of extra resources around, so this will give them the kind of integration they need to be proactive and efficient," Crandall said. "We're taking it one step at a time, starting with their customer service processes and then their financials."

The WaterOne project includes integrating applications for financials, human resources, work management, inventory management and purchasing transactions. WaterOne is also deploying the SAP for Utilities customer information module, which is configured for public agencies.

Implementation basics:

- Avoid scope creep: Don't deviate from the project scope. Don't buy more than you need.

- Don't rely solely on a consultant: Some firms and agencies hire third-party oversight to ensure a project is on target.

- One step at a time: Public agencies and some enterprises try to implement too much across too many agencies or departments.

- Employee training a must: Have a plan in place to train the end users.

Source: Mike Dominy, The Yankee Group

Residential customers make up about 90% of all accounts at the Kansas agency. Since WaterOne has no taxing authority, its primary sources of revenue are through water sales and system development charges.

If customer service workers can address billing and service inquiries and perform a smooth transfer of services when customers move, the agency can avoid disruption of services and ensure consistent payments, Crandall said.

Avoid the scope creep

TUI Consulting also oversaw a massive ERP installation for the city of Tacoma, Wash., in which the city absorbed a number of cost overruns that some experts believe could have been avoided. City officials and TUI Consulting have said the implementation has been successful overall, but end users have complained about problems with payroll and billing operations, resulting in slower than usual customer service.

Problems with the rollout of SAP's financial module resulted in delays to the city budget, and integration issues with SAP's CRM software caused slow customer service for the city's public utility operations. The rollout included various city agencies, which complicated matters.

Experts and analysts said the project would have gone more smoothly if it was done in a phased approach.

The key to a successful SAP implementation is obviously good planning and project management, but public agencies and even large enterprises need to avoid scope creep, said Mike Dominy, a senior analyst with Boston-based Yankee Group. Scope creep happens when agencies or companies begin rolling out modules according to plan, but eventually other modules and applications get added to the mix, bringing the project beyond its scope, Dominy said.

"The key is having a really good governance process in place," Dominy said. "There needs to be clear definitions around how decisions are made about the implementation --who decides what and when."

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Enterprise resource planning projects are especially difficult for public agencies that have older legacy systems that are highly customized. The movement of business processes from those custom applications to SAP can be very challenging, Dominy said.

Don't rely solely on a consultant to do the work, Dominy said. Often a business or agency hires a third party to conduct oversight and ensure a project is on target.

"It all goes back to good project management," Dominy said. "Design of the implementation and execution of that implementation should be flawless and in many cases it isn't."

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