The US Foundation Program
Alan Foster October 4, 2013
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 1 of 49
Agenda
1 Overall Concept & Scope Business Rationale ERP scope
Pages 3-6
2 Overall Timeline Pages 7-8
3 Program Development Governance Partners / Delivery Model National Grid Resources Design (89 BPDs, Code block) Build (RICEFWS) Test (AT, PT, IT, UAT) Training Business Engagement
Pages 9-22
4 Program Implementation Pre Go-Live (Cutover Preparations, Decision making, Sandy considerations) Post go-live (Emergence of Issues, Payroll, Supply Chain, Financial Reporting, USFP Business Improvement)
Pages 23-34
5 Path Forward Status, timeline, governance model, & costs
Pages 35-43
6 Observations Pages 44-45
7 Appendices Payroll & SC improvement activities Detailed cutover plan
Pages 46-50
2
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 2 of 49
Overall Concept & Scope
3
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 3 of 49
USFP was created to address challenges from having a complex solutions architecture As a result of the KeySpan merger in 2007, National Grid had been operating with many
inconsistent business processes across numerous technology platforms Fragmented business processes / systems resulted in:
Complexity and risk across accounting closes, local and jurisdictional financial and regulatory reporting, financial planning and budgeting, and Group financial analysis and controls
Multiple HR hierarchies needing significant workarounds to address misalignment between organizational structure and how employees are organized in their respective HR systems
Inventory Management and Accounts Payable reporting across two back office systems; Procurement and IS reporting across three back office systems
Data analysts across all business units using spreadsheets for data consolidation and reporting, introducing additional inefficiencies and risk of manual errors
The complex support structure introduced technical risk associated with business critical systems running on aged infrastructure, often with limited vendor support
4
For the US business, National Grid identified SAP as the architectural solution to replace the fragmented systems & processes, to help reduce technical risk
National Grid’s effort to integrate its Human Resources, Supply Chain and Finance processes onto a single platform is identified as the US Foundation Program (USFP)
US Foundation Program
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 4 of 49
A Goal of USFP was to Significantly Simplify the Systems Environment Moved from ~50 to ~20 different systems across multiple functional areas
5
Pre-USFP Current State
*Pink represents SAP system
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 5 of 49
Our SAP scope required a complex solution that links to 51 Legacy Systems
85. Supplier Self Service
(SUS)
85. Supplier Self Service
(SUS)
SAP FINANCE
CO FI
Legacy Interfaces In Scope
30. SAP BW30. SAP BW
29. BSI/PY Tax Factory
29. BSI/PY Tax Factory
6. Cash Mgmt /Banks / Treasury
6. Cash Mgmt /Banks / Treasury
28. Time Evaluation28. Time
Evaluation
24. Payroll24. Payroll
13. Materials Management13. Materials Management
22. Non-Utility Billing
22. Non-Utility Billing
21. MDMCustomer
Master Data
21. MDMCustomer
Master Data
SAP SD
Succession Planning
Succession Planning
Performance Mgmt
Performance Mgmt
e-Recruitmente-Recruitment
Third Party Interfaces In Scope
Out of Scope
3. Cost Element
Accounting
3. Cost Element
Accounting
2. Cost CenterAccounting
2. Cost CenterAccounting
5. Profit Center
Accounting
5. Profit Center
Accounting4. Internal
Orders4. Internal
Orders
10.Project Systems
10.Project Systems
9. Accounts Payable
9. Accounts Payable
1. General Ledger
1. General Ledger
VendorsVendors E. J. WardE. J. Ward
Fleet Warranty
Fleet Warranty
BanksBanks
PR / Benefits
PR / Benefits
SurveysSurveys
State GovState GovFed GovFed Gov
PHHPHH
NTSNTS HCLHCL
Document Management
Document Management
LEXLEX
86. Reval86. Reval
27. CATS /Time entry
27. CATS /Time entry
US Foundation Program Scope
56. GPCS56. GPCS
77. Remedy77. Remedy
80. Safety / IMS
80. Safety / IMS
72. PAIRS72. PAIRS
73. Paving73. Paving
TSA TSA
62. Maximo62. Maximo
83. Storms83. Storms
71. PowerPlant
71. PowerPlant
68. MMA 68. MMA
79. ETRM79. ETRM
67. Open Text
67. Open Text
75. Primavera
75. Primavera
51. EMIT51. EMIT 57. GSHOP57. GSHOP
33. ACIS33. ACIS
55. EPIQ55. EPIQ
81. SEAL81. SEAL
53. EMS53. EMS
59. HRMI59. HRMI
58. HR158. HR1
60. LDAP60. LDAP
76. RACF76. RACF
52. Emergency
Preparedness
52. Emergency
Preparedness64. Medical
DB64. Medical
DB
74. Post & Bid
74. Post & Bid
38.Business Objects
38.Business Objects
49. DSM 49. DSM
45. CSA45. CSA
41.Cascade 41.Cascade
40. CAS40. CAS
44. CRIS44. CRIS
42. CCH42. CCH
34. Advantage
34. Advantage
39.Carousel39.Carousel
54. EOER54. EOER
35. Adobe35. Adobe
43.CMSWeb
43.CMSWeb
47. Customer
I&A
47. Customer
I&A
48.Diamond 48.Diamond
37. AMAG37. AMAG
50. DW50. DW 63. MDSI63. MDSI 66. ONYX66. ONYX 69. NAKISA69. NAKISA
31. SAP BPC31. SAP BPC
70. Plateau70. Plateau
SAP HCM
12. Warehouse
Management
12. Warehouse
Management
11. Plant Maintenance
11. Plant Maintenance
18. Supplier Relationship Management
18. Supplier Relationship Management
7. Regulatory Reporting
7. Regulatory Reporting
8. Non Utility Accounts
Receivables
8. Non Utility Accounts
Receivables
19. MDM Catalog19. MDM Catalog
SAPECCSAPECC
SAP Supply Chain / P2P
15. Travel & Expense
15. Travel & Expense
17. Fleet Management
17. Fleet Management
14. Inventory Management14. Inventory Management
46. CSS46. CSS
HubwooHubwoo
87. Active Directory
87. Active Directory
Right NowRight Now
89. UI Planner89. UI
Planner90. UK
Hyperion90. UK
Hyperion
88. Allegro
88. Allegro
82. Sabrix82. Sabrix
SAP In Scope
91. Limited Benefits
91. Limited Benefits
1
23. ESS / MSS23. ESS / MSS
26. PersonnelAdministration26. PersonnelAdministration
25. Organizational Management
25. Organizational Management
Upgraded or new non SAP system and Interfaces in scope
96. BizApps 20. Purchasing
(ECC)20. Purchasing
(ECC)
94. PRM94. PRM93. CDR93. CDR
95. Corp Tax
95. Corp Tax
6
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 6 of 49
Overall Timeline
7
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 7 of 49
Overall Timeline
8
2007 - 2009 2010 2011 2012 2013
Today
Multiple and complex business processes across
multiple and complex technology platforms
USFP mobilized Pre-KeySpan merger
Implementation activities
Design, Build, Testing, Training & Engaging the Business
Initial Stabilization
National Grid rapidly mobilize significant
resources to address post go-live issues
USFP BI Program
Cut
over
& G
o-Li
ve
Company transitions from Deloitte as design lead to multi-partner
delivery model with EY & Wipro
Hurricane Sandy USFP Business
Improvement established
Various target go-live dates at different stages
(Dec 11, July 12, Oct 12 , Nov 5)
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 8 of 49
Program Development
9
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 9 of 49
US Steering Committee
Business governance meeting
Program governance meeting
Solution Integrat-
ion /
Change Control
Business Readiness
Program & Business Escalations
Business Escalations
Program / business integration role
IS Governance
Executive Sponsors
Informed of resolved escalations and status
Release Mgmt
As needed for IS review
Change Requests / Design Issues
Business Escalations
Release Escalations
Process Steering Groups
Finance
Finance BIL
SSC
SSC BIL
Operations & Network Strategy
Operations BIL
Network Strategy
BIL
HR
HR BIL
Procure-ment
Procure-ment BIL
USFP Program Management
Governance Model for the Development of the US Foundation Program
10 BIL: Business Implementation Lead
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 10 of 49
Primary Partner Roles and Responsibilities Partner Role Key Responsibilities
E&Y
PMO & Program Mgmt
Provide overall Project Management support Responsible for project planning, resourcing, and tracking project progress against schedule and budget Support project personnel with project information and communications support
Process and Design Manage the overall design of the application, including interfaces to other applications Map application functions to business processes to ensure alignment
Controls Design and construct internal application controls to ensure the integrity of the system
Roles and Access Design user access process and SAP user roles Perform and ensure appropriate Segregation of duties are maintained
Business Readiness Assess business implementation readiness and assist in business implementation planning
Business Engagement
Design and conduct comprehensive communications for engaging the business Resolve organized labor issues Design and conduct comprehensive multi-media training program
Wipro
Build and Unit Test Construct the application, including all required interfaces and assemble the various application modules Prepare test scripts for unit testing and conduct the testing
Testing
Prepare test scripts for system and acceptance testing Manage system and acceptance testing Configure and maintain testing tools
Data Construct and test data conversion programs and procedures Design and manage data conversion review and correction processes
Reporting and Information
Build business intelligence data model Develop business intelligence test scenarios
Cutover Develop comprehensive cutover plan Develop technical contingency plans and coordinate with business continuity plans
SAP Design Support and Oversight
Provide design support and oversight including supporting solution integrity Deliver solution for payroll actual cost Support specified technical areas such as FERC
11
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 11 of 49
Secondary Partner Roles and Responsibilities Partner Role Key Responsibilities
T-systems Deliver infrastructure hosting
Deliver the infrastructure and operating systems for SAP solutions Deliver infrastructure only for PowerPlant
PowerPlan
Design Support Support the USFP Asset accounting and front office design including configuration of PowerPlant, and all required interfaces
Build and Unit Test
Construct the application, including all required interfaces and assemble the various application modules Build the conversion programs for the two previous PowerPlant installations at National Grid Prepare test scripts for unit testing and conduct the testing
Testing Provide comprehensive support and defect resolution for the test phase
IBM
Build and Unit Test Make changes to National Grid legacy applications, ensuring that they appropriately integrate with the new
USFP solution Prepare test scripts for unit testing and conduct the testing
Testing Provide test support include defect resolution
Data Construct and test data conversion programs and procedures Design and manage data conversion review and correction processes
CSC Desktop and device support
Ensure users have appropriate software on desktop devices to access various SAP solutions Provide support for other devices such as hand held terminals at warehouse locations
Verizon Network provision and maintenance
Provide network connections between National Grid and t-systems Support performance testing of the solution ensuring no network impacts to performance
Xerox Printing support Provide support for testing of printing including specialist printing capabilities in line with National Grid standard contract
Purple Monster
Business Engagement Support
Provide support and leadership on business engagement activities Provide innovative techniques in regard to business engagement Provide program support
Abreon Training provision Provide specialist SAP training support for training design, build and delivery
12
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 12 of 49
US Foundation Program Organizational Chart
Cutover
Program Management
Program Management Office
Business Readiness Solution Integrity
Testing Reporting & Information incl. BI/BW
Build & Defect Resolution
Technical Delivery
Data Conversion Data Readiness
Business Deployment
Business Engagement
Training Delivery
Compliance
NUB Team
Front Office
Finance Team and BPC
HR Team
Supply Chain Team
PowerPlant
Delivery Management
Approximately 108 full time National Grid employees assigned to the US Foundation Program
Additional 350+ employees from various parts of the business participated throughout the project
Employees were engaged in all aspects of the project including: Steering Group, Program Management,
delivery management, business readiness, Build, Testing, Technical Delivery, Cutover and Training
600+ employees actively involved as super and/or power users 13
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 13 of 49
USFP Assurance Approach – 3 Layer Model
3rd Line of Defence Independent Assurance for Program and Audit Committee – Corporate Audit, PwC
SAP Project Team Assurance for the Program
2nd Line of Defence Vendors/MaxAttention
Monitoring and QA role within project
1st Line of Defence Project Team - PMO/Project Streams Development of control frameworks to ensure successful project delivery
Engages with the program to provide independent assurance on business readiness, testing, IT security and access, vendor and benefits management and help co-ordinate the overall assurance efforts.
Corporate Audit Engaged by the program team to provide independent assurance on data conversion, security and access, IT and manual controls and technology eg environmental set up and changes, disaster recovery. Enables the planning of the execution of the external audit
PwC
The vendors to the program provide assurance through reviews of technology and project deliverables. SAP solution architecture review key deliverables, independent partner QA review by EY and Wipro, separate assurance activity for SAP solution through a global contract with MaxAttention
Vendor Assurance
The project team through the PMO governance process and internal QA processes provide management assurance for each workstream. This is a continuous process.
Project Team
14
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 14 of 49
Design Principles and Activities The Company utilized a hybrid of National Grid, SAP and EY best practices and industry
standard methodologies for the delivery phase (which includes the design phase)
Completed high level and detailed design phases
89 new single Business Processes designed, each with its own process flow and requirements
A review of minimum legal and regulatory requirements completed
A gap analysis was performed to identify applications/services SAP does not provide (for example, SABRIX was utilized for standard sales and use tax)
Natural tension in the design phase between what the business requires/ wants and what can be accommodated with a standard SAP offering
15
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 15 of 49
89 new processes needed to be designed
16
Total # of processes Supply Chain HR Non-Util Billing Operations Shared Service Finance
89 11 7 12 14 25 25
Supply Chain HR (non TDC) (cont’) Operations
Purchase Goods & Services – ECC Manage Compensation & Benefits Logistics
PTP_50.20_Create & Maintain Requisition HR_30.40_Manage Salary, Bonus and Compensation SC_50.10_Manage Requests and Issue Material
PTP_50.30_Perform business approval HR_30.50_Administer Comp Processes SC_50.20_Manage Receipts and Putaway
PTP_50.40_Create & Maintain Purchase Order HR_30.60_Manage Benefits Processes SC_50.30_Management of Stock
Purchase Goods & Services – SRM HR_30.70_Operate Benefits Processes Fleet management
PTP_60.20_Create & Maintain Shopping Cart HR_30.80_Define C&B Communications SC_60.10_Manage Fleet
PTP_60.30_Shopping Cart Approval Process HR_30.90_Administer C&B Communications SC_60.20_Identify and Plan Fleet Repair Maint.
PTP_60.40_Perform sourcing Non-Utility Billing SC_60.30_Plan Fleet Preventative Maintenance
PTP_60.50_Create & Maintain Purchase Orders OTC_10.60_Issue Quote to Customer SC_60.50_Execute Fleet Maintenance
PTP_60.60_Perform Receipts & Returns OTC_60.30_Validate and Issue Invoice and Credit nts SC_60.60_Perform Vehicle Refueling
SCM Support OTC_60.40_Validate and Issue Invoice SC_60.70_Manage Warranty Claim Process
SC_30.30_Manage Contracts & Catalogues OTC_60.80_Issue Supporting Documentation SCM Support
SC_30.90_Manage Service Master Data OTC_70.20_Process Payments SC_30.50_Manage Material Master Data
Source to Award OTC_70.30_Process Credit Notes & Refunds SC_30.60_Manage Fleet Master Data
SC_10.80_Manage Supplier Base OTC_70.70_Manage Payment Errors Manage Inventory
HR (non TDC) OTC_70.90_Reconcile Payments SC_40.10_Materials Requirement Planning
Manage ER & Cases OTC_100.10_Contact Customer SC_40.20_Review Slow Moving Material
HR_20.50_Manage Cases OTC_100.30_Issue Dunning Letters SC_40.30_Manage Vendor Returns
OTC_100.40_Escalate Matters
OTC_120.10_Customer Master Data
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 16 of 49
89 new processes needed to be designed
17
Total # of processes Supply Chain HR Non-Util Billing Operations Shared Service Finance
89 11 7 12 14 25 25
Shared Service Shared Service (cont’) Finance (cont’)
Manage Resourcing SCM Support Fixed Assets & Projects
HR_10.70_Manage New Hires/Transfers/Redeploy SC_30.40_Manage Vendor Master Data FI_30.10_Entry / approval of GL journals
HR_10.80_Define Leavers Processes SC_30.100_Supplier Self Service (SUS) FI_30.20_Fixed Asset Reporting
HR_10.90_Manage Leavers Travel & Expenses FI_30.30_Maintain Fixed Asset Register
Manage Payroll PTP_30.10_T&E Card Administration FI_30.40_Maintain Local Work Instr. for Fixed Asset Acct’g
HR_40.20_Manage Payroll Inputs PTP_30.20_T&E Reimbursement Process FI_30.50_Month end Accounting Process
HR_40.30_Manage Payroll Processing Finance FI_30.60_Work Breakdown Structure Maintenance
HR_40.40_Manage Payroll Outputs General Ledger Accounting Compliance
HR_40.50_Manage Time and Attendance FI_10.10_Entry / approval of GL journals FI_50.20_Manage delegations of authority & Gateway
Accounts Payable FI_10.20_Intercompany Accounting Shared Services Decision Support
PTP_10.40_Check Processing (Automatic & Manual) FI_10.40_Maintain master data definitions FI_60.10_Manage Allocations Process
PTP_10.50_Interfaced & Consolidated Invoice Requirement FI_10.50_Manage the closure of books Manage Treasury & Investments
PTP_10.60_Invoice Receipt & Entry Process FI_10.80_Perform Closing FERC FI_70.20_Cash and Liquidity Management
PTP_10.80_Payment Process Setup & Approval FI_10.90_Manage Sales Tax / Use Tax FI_70.30_Manage In house cash
PTP_10.90_Payment Process Execution Banking FI_70.40_Bank Communication Management
PTP_10.100_Post Payment Processing (Stops&Voids) FI_20.10_Maintain company bank accounts FI_70.50_Manage Investment
PTP_10.110_Recurring Payments Reporting & Analysis Manage Financial Strategy
Manage HR Operations FI_40.10_Develop New Mgt Reports for Business FI_80.10_Manage Capital Structure
HR_50.30_Manage Data and MI Planning & Consolidations Manage Income Tax
Procurement Card FI_20.10_Maintain company bank accounts FI_90.20_Manage Corporate income tax
PTP_40.10_Procurement Card Administration FI_100.20_Manage Budget Process
FI_100.60_Manage Capital Programs
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 17 of 49
A sophisticated accounting code block was designed to meet many requirements
Term Definition
Code Block The accounting structure against which the National Grid financial records are maintained
Code Block elements The data fields in SAP used by National Grid to capture the required information about financial transactions
Cost Object Cost Center, WBS Element, and Order are also referred to as Cost Objects since costs are assigned to them
FI Module: Financial Reporting CO Module: Management Reporting Work Mgmt. Reporting
Company Code
Legal Entity
4 Characters
Segment Jurisdiction/
Business Line Reporting
6 Characters
Profit Center Tracks
Business Line Financials
7 Characters
Trading Partner Used For
Eliminations
4 Characters
Partner Profile Center
Audit Trail for Profit Centers
7 Characters
GL Account Coding for Transactions
8 Characters
Cost Element Coding for Transactions
8 Characters (Primary) 5,6,9 Characters (Secondary)
Cost Objects
Partner Object Audit Trail for Cost Centers,
WBS’s, and Orders 9,11, or 14 Characters
Cost Center Home/
Responsibility Center
9 Characters
WBS Element
Tracks Project Activity Costs
14 Characters
Order What did you
work on?
11 Characters
Operations What task did you perform?
4 Characters
*CO is key for Finance & Internal Reporting 18
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 18 of 49
Build During the build phase, the SAP system is constructed through a combination of Configuration
and the development of a series of components commonly referred to as RICEFWs (Reports, Interfaces, Conversions, Enhancements, Forms, and Workflows)
− Reports = 112
− Interfaces = 194
− Conversions = 75
− Enhancements = 179
− Forms = 44
− Workflows = 32
− Total RICEFW = 636
19
Small-Size Utility
Medium-Size Utility 150-400 RICEFW
Large-Size Utility 400-650 RICEFW
National Grid USFP 636 RICEFW
100-150 RICEFW
Design Build Test Readiness Cutover Post Go-live USFP BI
RICEFW Ranges for Power Utilities
National Grid UK R1 322 RICEFW
National Grid UK R2 172 RICEFW
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 19 of 49
Testing
► ~400 Objects Built and Unit Tested for IEFWs and ECC Reports
► ~2500 Test Cases Executed
► ~5500 Test Cases Executed
► ~2000 Test Cases Executed
► ~1000 Test Cases Executed
► ~550 Test Cases Executed
Build & Unit Test
Integration Test
Regression Test
User Acceptance
Test
Product Test 1 & 2
Assembly Test
Parallel Payroll
Test
Performance Test
Overall Testing Approach
Additional Technical Testing in Parallel
► Parallel runs focused on legacy run comparisons with PeopleSoft
► 65 test executed focusing on peak transaction volumes including 2500 concurrent users
20
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 20 of 49
Training
Training Approach
Best practices and industry standards Train the Trainer Process Based
Computer Based Training (CBT)
Super User Training for Post Go-live Support
67,000+ CBT courses assigned
Instructor Led Training (ILT)
Primary & Secondary Hub Locations
6,800+ ILT training assigned
Training Scope 16,000+ employees 133 locations (approximately) Employees spread out over 40,000 square miles
21
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 21 of 49
Business Engagement and Readiness
22
Pre Go-Live Efforts Post Go-Live Efforts
Monthly communication themes were delivered, which focused on key points business needed to understand at that point in time
Detailed engagement plans were developed by each business area (events, stakeholder management, communications, change networks) and were supported by USFP Business Engagement and Business Implementation Leads
Leading the Change one day events were held to support major stakeholder group (directors and managers) in what was changing and how to lead employees through that change
Business roles Catalogue and Descriptions prepared
Enduring Support Organization (ESO) Detailed Design completed
Training material developed
Dedicated team put in place to support business through transition
Super-users were key to the PGLS team plan
Implemented Business Continuity Management (BCM) Approach
Business Deployment Plan implemented
Data governance procedures and standards put in place
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 22 of 49
Pre Go-live
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 23 of 49
Multiple implementation strategies were considered during the early stages of the design phase
Implementation Strategies Considered During Design Phase
24
Options Considered
“Single Release”
“Dual release” (By Functional module Finance, SCM, HR)
Variations
− Regional (e.g.MA, RI)
− Systems (PS, Oracle)
− Jurisdictional
− Process (e.g. Fleet, NUB, etc.)
Outcome
Single release strategy selected for a number of reasons including:
− Better technical approach – simplifies technical environments
− Single impact of change to the business
− Lower overall program costs
− Overall benefits delivered earlier
Decision to implement SAP in a single release was re-evaluated in March 2011
and confirmed as the appropriate strategy
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 24 of 49
Three phases for cut-over – Master Data, Transaction Data, Post Conversion Processing (Catch-Up)
Master data conversion will start the beginning of September
Multiple go/no-go decisions will be made throughout the cut-over period
Black-out dates are defined by legacy system with corresponding contingency plan by system
Different SAP functionality will go-live at different dates, i.e. go-live is a continuous process over several weeks
Cutover Preparations
Cutover Preparation and Conceptual Phases
25
September October
M T W T F S S M T W T F S S M T W T F S S M
17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 2 3 4 5 6 7 8
Master Data Conversions Transaction Data Conversions Post Conversions Processing
Black Out Days by System
Legacy Systems
SAP
Go-Live Window
Integrated Cutover Plan Created (over 4,000 action steps)
– Business tasks, operating procedures, continuity plans
– Data conversion and verification plans
– Technical Code and configuration activities
– Infrastructure set-up
– Functional code freeze (USFP and systems to be replaced)
Certification of user acceptance testing
US business contingency plans
Cross-functional Post Go Live Support (PGLS) organization
Formal incident management process (prioritization, dispatch, action)
– System defects
– Cutover issues
– Business process issues
Formal Go / No Go governance involving US business and technical leadership
Conceptual Cutover Phases - Illustrative
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 25 of 49
Cutover Governance Council Charter
Approves cutover plan on a page foundation / updates
Go / No Go decision process
Key decision process
Mediation of unresolved business alignment issues
Risk mitigations
Decisions
The Cutover Governance Council provides a direct link between the USSC and the USFP Cutover team:
Assure key decisions are vetted with key stakeholders
Communication of risks, issues and mitigations to the USSC
Empowered as a decision maker for escalated items
Ensure critical processes can Go-Live
Ensure cutover governance model is established
Stakeholder alignment
Support for the program adjunct from the USSC
Purpose / Activities The Cutover Governance Council operates under the Governance structure of the USSC Leadership Team for:
The Cutover Governance Council is expected to:
Governance
Metrics / Reporting Planning Risks
Change Control Escalation Issues
Manage / approve changes
Manage corporate relationships
Manage escalations
Manage key decisions Mitigate issues Provide leadership
and strategic direction
Strategy (Big Bang)
26
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 26 of 49
Decision Making A Risk Assessment Board1 was formed to make the final decision to go live
Date Key Decisions
September 4, 2012 Board determined initial go live date of October 1st was not viable. Payroll only process area that reported they were ready for October 1st date
September 24, 2012 Payroll and Finance reported they prepared for November 5th go live date. Optimistic all process areas would make Nov. 5th go live date
October 1, 2012 Cutover process initiated
October 8, 2012 Operations reported they are prepared for Nov. 5th go live date
October 15, 2012 P2P and Shared Services reported they are prepared for Nov. 5th go live date
November 4, 2012
Nov. 5th go live date finalized - All process areas reported they were prepared for Nov. 5th go live date
(Areas with risk had reported sufficient mitigation plans were in place) - EY had agreed on readiness; process owners had signed off; and stage
gates had been completed
27
1Risk Assessment Board comprised of: Tom King; Ellen Smith; Lee Eckert; Alan Foster; Ray Schlaff; Matt Guarini; Chris Root; Rudy Wynter; Bill Bollbach; Ann Marie Scaparro; Gary Dionne and Chris Murphy
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 27 of 49
• Decision making
Stage Gates for Ensuring Solution Readiness
28
Stage Date Main Purpose Why we need this Stage Gate Status
Gate 1 10/16 Readiness to start with Work Order Pre-Conversion
In this stage gate we will evaluate if all pre-requisites have been fulfilled for conducting a stable work order pre-conversion.
Gate 2 10/25 Readiness to start with the weekly time entry legacy shut-down process
This stage gate is required because on 10/27 the last week for time entry into legacy systems ends. After that employees will capture time on paper until SAP is ready for time entry.
Gate 3 10/29 Readiness to shut down TES, SMARTTIME and PEOPLESOFT HR
This is the last stage gate prior to shutting down time entry systems and PEOPLESOFT HR.
Gate 4 10/31 Readiness to start with weekly time entry
This is the last stage gate prior to opening up SAP for weekly employees for time entry.
Gate 5 11/2 Readiness to start with cutover week-end activities
This go/no-go meeting is required prior to major activities that occur on the final cutover week-end. Several major legacy systems will be shut down and converted and transactional data will be converted into SAP.
Gate 6 11/4 Readiness to release SAP for go-live
This stage gate is the ‘point of no return’. After passing this stage gate switching back to legacy systems would involve huge cost, effort, and technical complications. If it is a ‘go’, SAP and several legacy systems will be opened up for end users. If it is a ‘no-go’, we will execute rollback plans.
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 28 of 49
Hurricane Sandy Response By October 23, the weather service was forecasting a possible hurricane in National Grid’s service territory
The Company’s first priority was to prepare for storm restoration and mobilize to support our customers
The Company was, however, well into the cutover process, which had begun in early October
29
Go-live Impacts and Alternatives Go-live for the limited systems necessary for storm
restoration efforts could be postponed without significant ramifications
If there were a delay in go-live during the cutover process, business continuity plans would have had to be extended, which creates significant risk to the business
There was no plan or design to convert at mid-month
The Company would not go-live January 1 – March 31 due to financial reporting requirements
The alternative was to delay to at least April 2013, which would require the team to remain mobilized for five months, thereby incurring additional expense and delaying the anticipated benefits from implementation
Conclusion The Company concluded that, with certain
adjustments, storm restoration efforts and our customers would not be negatively impacted with a November 5 go-live
Accordingly, the Company’s SAP deployment strategy was adjusted
− The cutover for MDSI, MAXIMO and related systems was postponed
− The cutover for Carousel and MMA was postponed until after storm restoration
− The legacy inventory and warehouse systems continued until after storm restoration
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 29 of 49
Post Go-Live
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 30 of 49
Developments Since Go-live
Develop the program
USFP BI Program begins
May Feb
Financial close - Quality issues emerge and are addressed
01/31
Financial close - Timing issues emerge and are addressed
01/01
Supply Chain issues progressively emerge, containment & improvement actions implemented 11/30
Understanding of breadth of payroll issues emerges, containment & improvement actions implemented
Go-Live June
Payroll Finance
Supply Chain EBS
Mar Apr Dec Jan
As issues arose, National Grid reacted and formed teams and governance committees to address the difficulties with Payroll, Supply Chain and Financial Close and Reporting
11/20
31
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 31 of 49
Payroll
Extreme Employee Frustration
• Zero pay
•Inaccurate pay • W-2s delayed
IMPACTS
Insufficient staffing
Unclear pay statement
Incorrect hierarchy
Inaccurate time entry
Ineffective training
Limited reporting
Slow, inconsistent processing
Defects in code
Inefficient payroll process
Inaccurate master data Poor data conversion
People
System
Process
Data
ROOT CAUSES
Lack of contingencies for
key processes
Weak change control
Reputational Damage
• Trade unions
•Attorney Generals • Press
Resource Mobilization
• Create temporary
organization • Rapidly onboard
many FTEs
Financial Burden
• Cost of support
organization • Cost of fines,
penalties
Missing work schedules
Post go-live Payroll
32
A number of payroll issues led to employees being underpaid (or not paid at all in some cases), overpaid, and problems with withholdings and garnishments
During November it became progressively clear that payroll challenges would need a sustained improvement plan in order to address the root causes of inaccurate pay. Many individual root causes drove wide ranging impacts
Initially the TDC was overwhelmed by the number of employee calls about their pay. Peak issue backlog of nearly 17,000 issues each requiring investigation and closure
The Company retained approximately 450 external resources to assist with addressing payroll difficulties
First priority was to address employees that were underpaid or whose garnishments or other key withholdings were affected. These issues were largely addressed by the end of January
TDC remained open to assist employees 7 days a week with extended hours for four months. Payroll clinics in 53 field locations were established. Financial assistance programs were implemented. Additional training for time entry was provided
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 32 of 49
Supply Chain
Post go-live Supply Chain
33
Challenges Next Area of Focus
Invoice Backlog
Peak of over ~15,000 outstanding invoices as compared to business as usual level of ~5,250
Limitations in the PO conversion, inaccurate hierarchy, system functionality and 3-way match posed the biggest challenges
TDC was not staffed to handle the levels of invoices at the productivity / invoice that we have been able to achieve. 168 additional resources on-boarded to ‘muscle-through’ the amount of invoices and address the necessary change requests
Inventory Management
Cutover integrity challenged by running parallel systems through storm period
Data-related and system functionality issues add to challenges
We are conducting an end of year inventory count to address the weaknesses in our cycle count process
Buying Experience
Improve compliance of business to new buying channels and receipting requirements through:
Training Communication Reporting Improved usability
National Grid experienced difficulties relating to its ability to timely pay vendors
Initially, to expedite payment, the Company paid a batch of older, lower value invoices to a default account until it could appropriately clear that account to accurate accounting. In addition, a significant number of invoices remained unpaid
In addition, the Company experienced difficulties with inventory records
National Grid retained approximately 200 external resources to support the Company in addressing Supply Chain issues
The Company has reduced the backlog and is focused on improving its processes
Backlog of Invoices
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 33 of 49
Financial Close – Timing (Nov ’12 – Aug ‘13)
WD 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 … 28 29 30 31 32 33 34 35 37 38 39 40 41 42 43 WD
Improvement
Ove
rall
Clo
se
Pre-SAPClose N/A
NOVEMBER Actual: 43 Workdays 1st SAP
Close
DECEMBER Actual: 32 Workdays -11 WD
JANUARY Actual: 18 Workdays -14 WD
FEBRUARY Actual: 13 Workdays -5 WD
MARCH Actual: 12 Workdays -1 WD
APRIL Actual: 14 Workdays +2 WDs
MAY Actual: 9 Workdays -5 WDs
JUNE Actual: 9 Workdays 0 WD
JULY Actual: 7 Workdays -2 WDs
AUGUST Actual: 8 Workdays +1 WD 34
Over the last ten months, the close timeline stabilized to around an 8 day window. This is the result of a focus on driving the following improvements: • Accelerating the interfaces of key systems (Payroll, PowerPlant, etc.) • Minimizing reprocessing through stabilizing key system processes
(Burdens, Allocations) • Reducing system interface timelines (PowerPlant, BI) • Improving data quality to reduce manual rework and manipulations
(Adjusting JEs, Consolidations)
CLOSE IMPROVEMENT FOCUS AREAS
As the financial closes were completed, the Company analyzed the results and it became apparent that a number of data quality issues existed
National Grid retained approximately 200 external resources to support its significant efforts to address the issues
The Company has completed numerous system corrections and enhancements and implemented numerous corrective actions and improvements to ensure sufficient validation of its financial data
Since go-live, the Company’s ability to complete the financial close has consistently improved and the majority of outstanding financial and other reports have been completed
The Company’s ability to provide reports has improved, but significant work remains to automate and simplify the processes
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 34 of 49
Path Forward
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 35 of 49
Recent Progress and Status by Process
Progress over last quarter Current State
Payroll
Reduced average processing execution time from 12-14 hours to 6-8 hours for weekly paid employees and from 14-16 plus hours to 9-10 hours for monthly paid employees
Simplified Wage Statement redesign completed and reviewed with union leadership
Long Island Wage Statement logistics and delivery plans finalized
Volume of known system defects continues to impede the ability to ensure accurate weekly payments to all employees
Existing system functionality gaps continue to lead to workarounds and errors resulting in decreased payroll efficiency and greater run times
The continued excessive need for auto approval of time leads to inaccurate accounting outputs
Finance
Monthly close cycle reduced to 8 days
Original programed monthly labor distribution process (CDP) replaced with a manual process and correcting entries posted for prior periods
8 of 14 US GAAP subsidiary annual reports issued
Finance master data governance process in place
Reduced backlog of open cash clearing items that existed at May 1st by over 75%
Still heavily dependent on external support to remediate control deficiencies, support statutory reporting, and the monthly close
Nearing implementation of some critical fixes (treasury/cash accounts) and deferred functionality, however certain unresolved defects are causing continuing data issues
In the design phase for long-term critical projects e.g. labor distribution, work order simplification
Internal management reporting remains limited
Supply Chain
Initial audit reviews positive on inventory cycle count process, continue to work on improving inventory accuracy
AP invoice backlog around BAU level
Increasing proportion of shopping carts and purchase orders flowing through the system
Reporting capabilities beginning to improve across end-to-end Supply Chain
System issues continue to occur on a regular basis – impacting productivity and resources as well as material availability
Process and system issues still impacting AP in delaying supplier payments & eliminating ability to achieve supplier discounts and requiring incremental resources to process invoices
Buying Channels need refining and Users must adapt to new processes/controls
36
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 36 of 49
Business Improvement
LIPA TSA
Bill Fibkins
EBS
KC Healy
PMO Team Structure & Accountabilities
Process Owners Jim Cross Dave Campbell Ross Turrini
Business Enablement
Kathy Lyford
Commercial Lead
Lori Rounds
Cost Control (p/t)
Rachel Patton
Legal & Regulatory (p/t)
Keri Sweet
Executive Alan Foster
HR Support (p/t)
Jenn Briere
Corporate Communications
Jackie Barry
Integration & Outcome Mgmt.
Tom Bennett
IS Lead Vikki Pope
Key PMO Accountabilities Key Business Accountabilities Execution of Business Improvement Program Manage program project portfolios Overall Project prioritization & project approval Total USFP related expenditures USFP related communication Vendor management
Accountable for business aspects of delivery and achievement of intended business results
Provide process related resources, expertise and support for both projects and EBS
Management of process performance metrics and external costs Project prioritization within process / function
IS Projects Delivery
RTR Projects Delivery
Supply Chain Projects Delivery
Payroll Projects Delivery
Post go-live
37
From go-live through June 2013, the Company was reacting to and addressing the emerging critical issues with Payroll, Supply Chain and Financial Close and Reporting
Significant progress has been made; however, much work remains to be done To ensure accountability and develop an integrated plan for addressing the outstanding issues
identified since go-live, National Grid created the USFP Business Improvement Team
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 37 of 49
USFP Business Improvement Timeline for Stabilization
The Company recognizes that achieving the full benefits available from the US Foundation Program will take time
The USFP Business Improvement Program will ultimately be successful when the SAP system and associated business processes are completely stable, which means that National Grid can efficiently and reliably deliver on its obligations to all stakeholders
The initial hope was to completely stabilize by the end of this calendar year, but we now know that work will continue beyond this fiscal year
The complexity and the degree of change required to stabilize USFP affect the timeline:
Post go-live
38
System Process People / Organization
Magnitude of fixes
Number of systems and interfaces to be changed and degree customization required
Nature of system changes (structural vs enhancements)
Cross functional
Scope / magnitude of process changes
Degree of standardization
Compliance
Training, knowledge transfer
Organizational adjustments: recruiting, onboarding etc.
Communication
Employee engagement
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 38 of 49
USFP Business Improvement Scope of Work and Prioritization
The integrated plan for fiscal year 2014 is in the process of being finalized
The team’s first stabilization priority is to ensure that National Grid can comply with its obligations to others, including its obligations to accurately and timely pay its employees and vendors and to honor its legal, regulatory and other reporting obligations to its external stakeholders on a timely and accurate basis
Work to achieve this priority is underway and will be substantially delivered during the remainder of this fiscal year
The team’s second stabilization priority, of key importance, is the work to enable National Grid to be efficient and self sufficient in managing and realizing the benefits of the SAP system and associated business processes without significant reliance on external support
The effort to become fully efficient is also underway and will continue beyond this fiscal year. The scope of that work continues to be developed
Post go-live
39
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 39 of 49
Developing the Constrained Integrated Plan
Review all in-flight projects – stop those that are not mission critical
Identify required future projects to achieve stabilization
Obtain more data around process health, projects scope, staff augmentation activities and constraints
Evaluate constraints
Determine list of initiatives based on capacity, dependencies, benefits and risk appetite
Baseline integrated project plan based on critical evaluation of prioritization across all processes
Recommended project delivery model
Recommended staffing mix to address dependency on external consultants
Plan Development Process
Gather Additional Data
Constrained Integrated Project
Plan Quick Scan
Quick Screen
System SME Resource Cost
Review vendor contracts, commercials and delivery model
Renegotiate contracts with all vendors for volume discounts and move to risk based contracts
40
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 40 of 49
Q3 Q4 System Releases
Payroll
Finance
Supply Chain
EBS
12/31 – Implementation of critical Change Requests, (inventory system improvements)
The High-level Constrained Integrated Plan
Sept 30th Dec 31st March 31st
Release 3 Release 2
R3 – Payroll improvements Phase 2 changes go-live
R3 – New Reporting solutions deployed
FY15
External Staff Aug FTEs
10/15 – Wage Statements launched in Long Island followed by NY by 11/30
11/1 – Complete design & build for material master data and vendor master improvements
R3 – Deploy remaining major system enhancements for vendor, material, & fleet management
12/31 – Recruiting / on boarding complete (~100 FTEs) Wage Statement support ends
R3 – New reporting analytic capabilities & Mobility improvements
3/31 – EBS fully operational 9/30 – New support Operating model
deployed
R2 R3
9/30 – AG settlement payments issued
9/20 – Initiate transition to new delivery model
5/5 – Plc Year-end requirements complete
R3
R3 Plan Build Test
3/31 – Year-end preparations complete
5/31 – Fleet management and material planning system improvements
7/1 – YE Financial close support nears
completion
LIPA separation Long-Term solutions
Year-end preparation
1/31 – Controls improvement complete
12/31 – R2 Cutover Execution
10/30 – Controls design complete
1/31 – 2013 W2s Mailed
2/14 – Steady State Overpayment Recovery Module Deployed
3/31 – EBS staff aug ends
1/1 – R2 Payroll Updates
Implemented
11/30 – IFRS PowerPlant functionality deployed
41
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 41 of 49
Implementing through a Disciplined Operating Model
42
Project Execution Redefining the delivery model to achieve
significant vendor cost reductions Managing outcome delivery and measure
associated performance metrics Recruit and onboard internal resources for
sustainable business processes and organizations
Implementing quality control process to ensure outputs consistent with business process requirements
Management of Cost, Scope, and Schedule Overall Portfolio Management with weekly
status reporting Process Ownership and Accountability Formal Change Control Process Weekly Change Control Board
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 42 of 49
Summary of Costs
Notes:
(a) All capital spend has been recorded at NG USA Service Company.
Associated rental charges allocated to operating companies.
(b) All O&M has been recorded at NG USA (“Parent”).
* Forecasting operating costs for this fiscal year in the range of $250 million to $300 million (range includes the approximately $139M incurred April 1, 2013 through July 31, 2013).
The costs set forth in the schedule are all-inclusive, and not limited to costs that relate solely to fixing the system. They include initial capital costs associated with system design, training, costs incurred in performing transactional work to correct data entry issues, employee support costs, process improvements, improving controls, costs of fixing root causes, and costs incurred to implement processes outside of the system to process payroll and prepare financial reports, among other related stabilization costs.
US Foundation Program Total Costs Incurred ($M)
To Design, Build, Test, Launch
11/15/12 to 03/31/13 FY14* Total
Capital (a) $231.6M $42.4M $32.7M $306.7M
O&M (b) $128.0M $90.4M $261.0M $479.4M
Total $359.6M $132.8M $293.7M $786.1M
43
Design Build Test Readiness Cutover Post Go-live USFP BI
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 43 of 49
Observations
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 44 of 49
Observations The Company takes very seriously the impact the US Foundation Program difficulties have had on employees and the Company’s ability to deliver on its external commitments. In addition to its commitment to correct the issues prospectively, the Company has begun to look closely at what led to the difficulties, including completing an internal audit review.
Certain root causes with the benefit of hindsight:
45
1. Overly ambitious design – Limited critical evaluation of the process steps and system performance constraints that would be introduced led to a system designed to meet many requirements irrespective of the complexity and impracticality the solution created.
2. Significantly underestimated the scale of transformation needed to successfully implement the new single end-to-end SAP payroll process. Complexity in legacy union arrangements and inter-relationships with time entry process were not fully understood pre-go-live.
3. Ambitious business agenda during project life cycle resulted in limited availability of internal resources for the project. Compensated with consultants who lacked knowledge and experience of National Grid’s business.
4. Successful delivery demanded our partners lead us to success; however, the multi-partner delivery model did not bring the intended benefits (for example, in the area of assurance). Commercial arrangements did not transfer enough risk to our partners.
5. Lack of end-to-end process focus led to issues with ownership and accountability across some processes.
6. Testing proved to be far less effective than expected. Effectiveness was hampered by the limited range of scenarios considered and limited data availability.
7. Inadequate data quality and governance. Despite efforts to prioritize data cleansing pre go-live, it is clear we did not fully appreciate the challenges with our legacy data and the significance these challenges would have on our processes post go-live.
8. Too much focus on timeline and not enough on quality. A key focus was tracking to plan without fully understanding outcomes. There was insufficient effort to seek out and/or receive challenges to ready status.
9. Despite investing heavily in training the methods deployed did not prove to be effective in achieving the necessary level of capabilities within our organization.
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 45 of 49
Appendices
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 46 of 49
Business Process Cutover Plan
47
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 47 of 49
Roles, SOD & User Access
Pay Advice Guide +
Access issue
Time Keeper Capability
Improvement
TDC Call Center
Experience
Employee Time Entry Capability
SAP
Controls Augmentation
Payroll Oversight PMO
USFP HR Team
TDC Payroll Team
Holistic Issue Management Process
SAP Support Team (Max Attention)
Payroll Analytics & Reporting
TDC medium term Resource Plan
Downstream Accounting
Impacts
Improve Correction Implementation
Process
- Ernst & Young - National Grid - KPMG - WIPRO
Banking ACH
Process
Check ADP Process
Leading Activity:
Core Team Payroll Process Improvement Activities
Improve Hierachy Accuracy
Field Employee Clinics
Reduce Length of payroll process
Performance Hub –Operational Metrics
- SAP
Wipro technical support -Basis
-PI -Functional
Positive Auditing Of Pay Checks
Schedules Remediation
All Other Garnishments
Union Deductions
Define Exception AP Payment Process
Employee Expenses
Employee Taxes
Payroll Improvement Activities
Userbility of system
USFP Program Leadership
Advance / Loan
Facility
Master Data Verification
Auto-Email Messages
Improvement
Build Ad hoc pay Cycle Capability
401K Impact Management
Employee Experience Improvement Activities
W2 Impact Management
30
29
28
31 19
20
21
22
23
24
25
26
27
18
17
16
15
14
13
12
11 3
1
2
4
5
6
7
8
10 9
= First Priority
= Second Priority
Employee Communications
32
48
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 48 of 49
Master Data (Vendor, Material, Info Record)
Roles, SOD & User Access
P2P Advice Guide +
Access issues
TDC Receipting Capability
Improvement
SAP
Controls Augmentation
Procure-to-Pay Oversight PMO
USFP P2P Team
TDC P2P Team
Holistic Issue Management, including… •Performance Hub – Operational Metrics •Investigation of root cause of issues analysis
Xign Invoices
Customer Refunds
Banking ACH Process
Manual Check Process
Develop Specific P2P Hierarchy
Wipro technical support -Basis
-PI -Functional
STORM PO/Invoice Processing
PO Conversion
3rd Party/ Critical Payment Disbursements
• Payroll • Vendor
Procure-to-Pay Improvement Activities – Nov 20th
USFP Program Leadership
SOBO/ROBO Mobilization
Improve Auto-email messages: ERS/SUS Define Exception AP
Payment Process
Vendor Performance (SUS)
Receipt of Last Resort
PO/Invoice Backlog
Usability of System
TDC Resource Plan
Wire Process
Downstream Accounting Impacts
P2P Response Team
P2P Accounting Capability
Non-Stock Receipting Mgmt
Targeted Business Communications
Targeted Vendor Communications
Business Engagement
GR/IR Account Strategy
AP Query Management
Business Ownership of PO's
P2P Training Completion
P2P Analytics and Reporting
AP Realignment In the SAP Environment
P-Card/Storm-Card Clearing Activity
Employee P-Card/ Storm-Card Mgmt
Vendor
Core Team Procure-to-Pay Improvement Activities
Vendor & Customer Experience Improvement Activities
1
2
6
7
8
9
10
11
12
3
4
5
25
26
27
28
29
30
31
32
33
34
36
35
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14
15
16
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18
19
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24
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21
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38
39
- Most Immediate Priorities
49
Massachusetts Electric Company Nantucket Electric Company
each d/b/a National Grid D.P.U. 15-155
Attachment AG-23-9-1 Page 49 of 49