link 10 november 16 – 18, 2010 1 ps deal module utilization v9.0 case study - aep rick gray...
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LINK 10November 16 – 18, 2010
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PS Deal Module Utilization v9.0 Case Study - AEP
Rick Grayrgray2@aep.com
LINK 10November 16 – 18, 2010
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– AEP – Company Overview– Project Scope– PS Enterprise Deal Module
Overview– Purpose of the Deal Module– AEP’s Scope of Delivered
Functionality – Deal Module Flexibility vs.
Complexity
– AEP Customizations– Known Deal Module Issues– Requests for Improvements– Review and Summary– Questions
Contents
LINK 10November 16 – 18, 2010
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AEP – Company Overview
• American Electric Power has been providing electric service for more than 100 years and is one of the nation’s largest electric utilities, serving in 11 states.
2009– Revenues (in billions) $13.5 – Net Income (in billions) $1.362 – Service Territory ~200,000 Square Miles– Total Assets (in billions) $45.2– U.S. Customers (year-end) 5,213– Employees (year-end) ~20,000
LINK 10November 16 – 18, 2010
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Project Scope•
• PS Modules: AP, AR/BI, GL, Treasury, Project Costing
• Technical Upgrade– Reapply customizations, unless no longer
required– No new functionality, unless replaced
customizations
• Technical Scope– Double upgrade from 8.0 -> 8.9 -> 9.0 – 5,358 Functional Requirements
• 441 Customizations (Work Units)– 18,204 PeopleSoft, 222 non-PeopleSoft Objects customized– 49 Customizations for Deal Module
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Deal Module Scope Overview
Prospectus
Bond Issuance forABC Company
Issued: June 1st, 2009$50,000,000
5%Interest Payment Monthly
Matures 30 Years
Calculates the dollar transactions (Cash Flows):
Original $50M Cash Receipt
Monthly Interest Accruals and Payment $208,333.33
Maturity $50M Repayment
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Deal Module Scope Overview
Calculates the dollar transactions (Cash Flows):
Original $50M Cash Receipt
Monthly Interest Payment $208,333.33
Maturity $50M Repayment
Generates Cash Flow:
$50,000,000 on June 1, 2009 in Bank Account 123456
•Cash Balance is integrated with Cash Module for Cash Position.
•Feeds into Bank Reconciliation.
•Expenditures feed into Financial Gateway for disbursements
•Generates Accounting:
Cash $50,000,000LT Debt $50,000,000
Company ABC’s total debt is increased by $50M.
Visibility to understanding the total debt of ABC.
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People Books Description-AEP Utilization
Deal Management provides the following business processes (items in gray are not used at AEP):
• Instrument type and instrument template creation and maintenance. • External and internal deal creation and maintenance.• Trade tickets creation and maintenance.• Securities creation and maintenance.• Undo deal functionality. • Deal confirmation, administration, and reevaluation.• Deal portfolio management.• Deal collateral administration and review.• Equities creation and maintenance.• Deal Fees
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Deal Flexibility
•Financings are varied, complicated, and change
•The Deal Module attempts to meet the needs•At AEP we only use two Types
•Flexibility within types
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Flexibility vs. Complexity
Prospectus
Bond Issuance forABC Company
Issued: June 1st, 2009$50,000,000
5%Interest Payment Monthly
Matures 30 Years
• Issue Date June 1 –
• Bonds rarely settle in issuance date
• Settlement vs. Coupon Start vs. Issue Date
•Interest Payment Date
• Frequency
• Initial Payment period long or short
• Weekend and holidays
•Interest Calculation
• Day count basis (30/360, Actual/365, etc..)
• Interest Bearing, discounted, compounding, arrears, etc..)
•ETC… , ETC… and so forth
Bottom line – There are several variables and combinations that change the derived cashflows.
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AEP Deal CustomizationsAEP added customizations for the following processes: • Accuracy:
– Deal Approval Workflow – Accounting Review and Approval– Undo Accounting– Unroll deal functionality– Deal Deactivation and Link new deals– Lock cashflows after accounting has ran– Unlock Settlement Instructions and Description for Spawned Deals (Sell
Buyback and Rolls)– Key Deal Indicator Report – Lists and Compares Data between deals
• Efficiency:– Auto Roll functionality – Deal Import (Short Term Debt and Investments)– Deal Templates – Added Settlement Instructions for cashflows
LINK 10November 16 – 18, 2010
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AEP Challenges with PS Deal Module
• Deal Challenges:– Complexity – Lack of Documentation – Deal Locks once entered– Accounting Locked for Life of Deal– Cashflows Inflexible– “Equity” Recorded in PS is only the Investment Side
• AEP Identified Bugs:– Interest accruals on partial sell buybacks – Interest Overrides with Purchased Interest – Short / Long Initial Interest Payments on Amortized Loans– SWAPS – Cashflow Processed as MAN do not pick-up Accounting– Cashflows Editable for Investments after Accounting Occurs
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•AEP’s Wish List:– Documentation! – Detail User Manual– Fix known Bugs and Improve QA on Releases– Allow Deal Editing until Accounting is Posted and/or Bank
Reconciled•Un-Approve Cashflow
– Allow Changes through Life of Deal•Accounting Template, Settlement Instructions
– Simplify Entry •Perhaps VRDN, Money Market, CP etc.. Independent Entry Screens •Allow unscheduled interest and principal payments (up and down)
– Instrument Templates should include Settlement Instructions– Undo and Redo (Accounting, Roll, Sell Buyback, etc..) – Rate Reset from import should update deals without visiting each
deal– Approval workflow for Deal Cashflows– Process to require approvals on changes to settlements
instructions•Changes made to settlement instructions should be flagged as unapproved
•Cashflows with unapproved settlement instructions should not process
Request for Improvements with Deal Module
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Questions?Rick Gray AEP Cash Managementrgray2@aep.com
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Appendix
PeopleSoft Deal Module Utilization v9.0 Case Study - AEP
Rick Gray AEP Cash Managementrgray2@aep.com
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Deal Process and Approval Workflow Summary Page
Appendix A – AEP Custom Deal Approval
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Deal Workflow Setup by Portfolio
Appendix B – AEP Custom Deal Workflow
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Deal Undo Accounting Entries
Appendix C – AEP Custom Undo Accounitng
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Deal Unroll
Appendix D – AEP Custom UnRoll
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Deal Auto-roll
Appendix E – AEP Custom Deal Auto-Roll
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Deal Import Staging Table
Appendix F - AEP Custom Deal Import
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Deal Import Setup
Appendix G –AEP Custom Deal Import
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