© 2008 Eventure Events. All rights reserved.

Process Standardization to Support Growth Targets

Roehl NavarroGlobal Director, GRC

AES Corporation

Jimmy Lewis AES Global Account Manager

SAP Utilities

Executive Summary

• 123 Generation plants in 29 countries, 43,000+ MW

• 7 integrated utility companies in Brazil, Argentina, Ukraine, EL Salvador, USA, Kazakhstan, Chile- Over 14M Customers

• Emerging Leadership in Alternative Energies

• Our mission is to produce CLEAN SUSTAINABLE ELECTRICITY

1. The various markets we operate in have different regulations

2. Our diverse operating environments dictate the need for a federated IT infrastructure that supports local operating requirements while promoting standardization and global KPI monitoring to whatever extent possible

The big challenge to execute is determining what can be standardized and what must remain localized.

• Even Localized Infrastructures can participate in the global view. A perfect example is our CIS environment in Brazil, with ~5.5 M customers. Our infrastructure must obviously address local regulations, be highly scalable, and integrate with our corporate financial system. SAP CCS for Brazil was the only choice.

Federated IT Governance

Structure and Management

Federated IT Governance

Structure and Management

Global Support of Local DeploymentsGlobal Support of

Local Deployments

Enablement of our Business.

Enablement of our Business.

Value RealizationValue Realization

Ukraine

Brazil

Spain

Chile

United States

El Salvador

TurkeyBulgaria

Jordan

Argentina

SAP has been deployed within AES to 10* countries so far, supporting over 8 million + contracts world-wide so far

* Brazil implemented SAP ERP before the start of the genesis program. In February 2008, there were 4,000 active users. The SAP Customer Care & Service (CCS) module was also implemented in Brazil and supports 5M customers. ** Ukraine has also implemented the CCS module and now supports 1.3M customers.

Deployments to this point have provided substantial control coverage (~50% of Assets, ~60% of Revenue and ~67% of Income from Continuing Operations)

Deployments to this point have provided substantial control coverage (~50% of Assets, ~60% of Revenue and ~67% of Income from Continuing Operations)

Country Business Locations Users Go-Live

Date

Argentina Alicura 5 300 10/01/08

Jordan Jordan PSC 1 30 05/12/08

Bulgaria Maritza East 2 60 05/12/08

Turkey AES Turkey 1 50 05/12/08

United States Corp Treasury

1 100 1/01/08

Spain Cartagena 1 60 8/01/07

El Salvador Caess-BS Clesa

1 500 7/01/07

Ukraine Kievoblenergo/

Rivnoenergo / Energoline

3 1,500 4/1/07

Chile / Argentina

Gener 16 560 1/1/07

Brazil Electropaulo / Sul / Tiete

3 4,000 1/22/08

Total Countries: 10

34 7,160 users

Who we are in Latin America

26 Countries

30,000 Collaborators

The largest energy distributor in Latin AmericaThe largest energy distributor in Latin America

5.5 million consumer units5.5 million consumer units

16.5 Million inhabitants16.5 Million inhabitants

~36% of AES global revenue~36% of AES global revenue

~$6B annual revenue~$6B annual revenue

4,000 Users4,000 Users

The largest energy distributor in Latin AmericaThe largest energy distributor in Latin America

5.5 million consumer units5.5 million consumer units

16.5 Million inhabitants16.5 Million inhabitants

~36% of AES global revenue~36% of AES global revenue

~$6B annual revenue~$6B annual revenue

4,000 Users4,000 Users

IntroductionGenesis Initiative

Implement a common business model for AES

Define and implement standardized and harmonized business processes in the countries AES has Generation and Distribution Companies

Standardize and harmonize master data such as material master, customer and supplier data

Implement a global template reflecting the AES standards as much as possible

Rollout the template into the countries defined in scope

Key Goals of the whole InitiativeKey Goals of the whole Initiative

Drive quality financial information

Create repeatable roll-in model

Improve productivity at businesses

Became a Learning Organization

Manage total cost of IT ownership

Improve & reduce cost of compliance

Business DriversBusiness Drivers

Reduce operating cost

Improve productivity and performance

Achieve additional capability around financial reporting

Improve overall quality of information

Improve standardization

AES ObjectivesAES Objectives

In 2004 AES decided to adopt SAP as our main platform for our Global Operations. Phased deployment plan. We are implementing project after project AES globally is ~130 operating companies. Brazil’s CIS needs and Corporate Financial were very high priority

In 2004 AES decided to adopt SAP as our main platform for our Global Operations. Phased deployment plan. We are implementing project after project AES globally is ~130 operating companies. Brazil’s CIS needs and Corporate Financial were very high priority

• Implementation of commercial management systems for high, medium and low voltage clients, based on SAP, CCS 4.7.2, CRM 4.0, BI 3.5 Solution for the Utilities industry, replacing the current commercial systems, mainly Pegasus (AT/MT) and Sicon (BT)

• Implementation of commercial management systems for high, medium and low voltage clients, based on SAP, CCS 4.7.2, CRM 4.0, BI 3.5 Solution for the Utilities industry, replacing the current commercial systems, mainly Pegasus (AT/MT) and Sicon (BT)

Five billing systems

Difficulty in the collection management

Not consistent management information

Difficulty in the accounting closing process

Lack of continuity of the billing system for High and Medium voltage clients

Programs at their technical maintenance limit

High maintenance costs

Operations focused on processes and not on integrated systems

Drivers

© SAP 2008 / Page 3

CCS Implementation for AES EletropauloOverview

• SAP CRM, IS-U CCS, XI and BW systems implemented;

• More than 100 FTE's, involving resources from System Integrator, Delivery Center, SAP AG, Third Parties, AES Eletropaulo and AES Corporate;

• More than 120 business processes in place;

• Batch Chain invoicing daily about 300,000 contracts

• More than 3,500 people trained

• 10 months of training sessions in Low Voltage processes

• Innovative SAP landscape: multiple applications and DB servers using Oracle RAC and 10g database, ensuring a high availability environment

• SAP CRM, IS-U CCS, XI and BW systems implemented;

• More than 100 FTE's, involving resources from System Integrator, Delivery Center, SAP AG, Third Parties, AES Eletropaulo and AES Corporate;

• More than 120 business processes in place;

• Batch Chain invoicing daily about 300,000 contracts

• More than 3,500 people trained

• 10 months of training sessions in Low Voltage processes

• Innovative SAP landscape: multiple applications and DB servers using Oracle RAC and 10g database, ensuring a high availability environment

Other important aspects of this implementationOther important aspects of this implementation

CCS Implementation for AES EletropauloOverview

• Hot site with on-line data replication (US and in UK) – in order to guarantee AES business continuity

• Biggest data migration already in production in Brazil, with more than 5.5M Business Partners; replacing around 10 legacy systems

• Integration services using SAP-XI

• Internet Solution – integration with SAP via NetWeaver

• Call center solution using IVR/CTI, integrated with SAP-CRM

• Select Target solution for Loss Prevention processes, integrated on-line with CCS and BW

• More than 90 BW reports available via web

• Hot site with on-line data replication (US and in UK) – in order to guarantee AES business continuity

• Biggest data migration already in production in Brazil, with more than 5.5M Business Partners; replacing around 10 legacy systems

• Integration services using SAP-XI

• Internet Solution – integration with SAP via NetWeaver

• Call center solution using IVR/CTI, integrated with SAP-CRM

• Select Target solution for Loss Prevention processes, integrated on-line with CCS and BW

• More than 90 BW reports available via web

LossRecovery

SAT-S

SAT-R

ATENDE

OUVIDORIA

SGO

PSE

PEGASUS

SICON-B

SIGEN

CODENRECIBO

FATURA

AUTOFAT

NEGOCIAÇÃO

SICON-F

SAF

SGFA

INSP

ATENDE CI

QUALPROX

SAT CELULAR

CENTRAL DE

CALCULO

CONTACT

CENTER

SCE

SIC / RIC / DW

28 Systems

ATENDE.COM

TELA FÁCIL

MainFrame

Previous Situation in AES Brazil CIS Arena

CollectionBillingReadingSalesRelationship

Present Situation

Integration, simplification and sustainability.

• SAP pre analysis

– Data model

– Capability with SAP

• Organization redness

– Executives

– End users

• Budget estimation

Timeline Strategy

• Construct + tests

• Unit + integration

• Business involvement

Evaluation Model Solution Parallel Tests

Blueprint

Kick off

Checkpoint

design

Weekly milestones monitoring

Cutover

Simulation

Technical

go live

Public go live

Billing 1,5%

Migration99%

Pre-Analysis

• SAP pre analysis

– Data model

– Capability with SAP

• Organization redness

– Executives

– End users

• Budget estimation

• Construct + tests

• Unit + integration

• Public Go Live - Synchronize go lives with social windows = Window of opportunity

Year end or carnival

Use holidays (stop of operations)

• Respect SOX requirements

• Public Go Live - Synchronize go lives with social windows = Window of opportunity

Year end or carnival

Use holidays (stop of operations)

• Respect SOX requirements

There are Never Too many TestsThe methodology used in Genesis project includes a battery of tests to guarantee the quality and the integrity of solution.

In Genesis project the main testing phases were:

Unit testsUnit tests test the business transactions unitarily

Integrated tests

Integrated tests

test the business process and its integration. In Genesis more than 120 processes were defined and tested

Parallel testsParallel tests test to validate the revenue cycle and compare the results between the new

and the legacy systems – for the 2nd go live, it was executed two cycles of this test, with the scope of 1 week of billing cycle (representative sample)

User Acceptance

User Acceptance

consists on testing the designed processes, using migrated data, and obtaining the acceptance of the process owners. The process and variants executed during Solution User Acceptance phase were defined and validated with Business Owners.

Testing Streams

Stress Tests Stress Tests Data Migration CyclesData Migration Cycles Cutover simulation Cutover simulation

Consists on performing the tests to

ensure that business processes

run with adequate time,

considering the on-line and batch

scenarios, including all the SAP

systems (CCS, CRM BW, XI). AES

Eletropaulo’s scope includes to

invoice daily around 300.000

contracts and to load these

invoices information to BW system.

ETL (extraction, transformation and load) process. In general, the major part of the data is migrated using a specific IS-U CCS tool (IS-U Migration Workbench). In total, AES Eletropaulo’s migration included more than 5.5M of Business Partners; replacing around 10 legacy systems. The data cleansing project was segmented in the following topics to better produce results:

Addresses

Customer data

Receivables

Equipment data

Fraud data

The activities of the cutover period were simulated, in terms of data extraction, loading in CCS, loading in BW, replication to CRM, processes recovering, interfaces activation, etc. 1st go live: the cutover period

was one extended weekend. 2nd go live: 2 weeks of cutover

period, where the downtime of SAP (already in place) was 1 week and the downtime of the LV legacy system was 2 weeks. Around 200k services had to be recovered after the go-live, major part in the end of the cutover period, due to downtime issue. A specific tool was designed and implemented by the project specifically to cover this subject during the cutover period

Communications Strategy

© SAP 2008 / Page 13

Involve everyone and tell everyone. Don’t make the new billing system a surprise to your customers!

When implementing a CCS to cover 5.5M customers, a well organized War Room is essential.

Bu

sin

ess

War Room Coordination

Business Areas Support

Delivery

Center

Incidents Resolution

Operation

Infrastructure

Transition Coordination

Pro

ject

Steering Committee

War Room Objectives

• Coordinate actions during transition period (Cut-Over).

• Initiate the business operation stabilization.

• Control and monitor the execution of the operational and commercial processes:

— Meter Reading/Invoicing

— Collection

— Attending

— Service Orders

Set of business and project people with specific roles forSet of business and project people with specific roles for

Operating 24x7 and located in a same physical place

© SAP 2008 / Page 15

• Identify the source of the problems (in the business operation or in the system). Coordinate actions.

• Integrated understanding about the transformation progress

• Communicate unique and trustable information to the company

War RoomCoordination

• Takes the necessary business decisions during the transition period (Cut-over)

• Takes the basic operative decisions to stabilize the business after Go Live

• Prioritizes problems resolution

• Coordinates and decides the contingency actions

• Decides the Roll back point

• Coordinator: Business Area Represent on Executive Level

• Takes the necessary business decisions during the transition period (Cut-over)

• Takes the basic operative decisions to stabilize the business after Go Live

• Prioritizes problems resolution

• Coordinates and decides the contingency actions

• Decides the Roll back point

• Coordinator: Business Area Represent on Executive Level

War Room Coordinator

ReceivablesStabilization

AttendingStabilization

Service OrdersStabilization

FinancialStabilization

SolutionStabilization

InfrastructureStabilization

AES & SAP

SAP is a dedicated member of our leadership team, not just a vendorSAP is a dedicated member of our leadership team, not just a vendor