INTEGRATED PROGRAM REVIEW Information Technology June 19, 2018 B - PowerPoint PPT Presentation

INTEGRATED PROGRAM REVIEW Information Technology June 19, 2018

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Agenda Topic Speaker Information Technology Overview Ben Berry 1 Executive Vice President (EVP), Chief Information Officer (CIO) Status Quo Trajectory - Need for Change Ben Berry EVP and CIO 2 Enterprise Technology Assessment (ETA) Ben Berry EVP and CIO 3 ETA Breakthrough Strategies Ben Berry EVP and CIO 4 Paula Hamlin ETA Program Manager ETA Strategy: IT Organizational Ben Berry EVP and CIO 5 Optimization ETA Strategy: Cloud Strategy Ben Berry EVP and CIO 6 ETA Strategy: Finance IT Model Ben Berry EVP and CIO 7 Question and Answer Session Ben Berry EVP and CIO 8 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 2

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N The BPA Challenge Are we working on the right things? More business online More applications More data DEMAND Increasing cost of information availability The Widening Ability to deliver Gap through shrinking budgets SUPPLY More requests chasing fewer resources B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 3

B O N N Enterprise Information Technology E V I L L E P O W E R A D M I N I S T R A T I O N Chief Information Officer Transmission B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 4

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Status Quo Enterprise IT Trajectory IT Expenses FY2005 to FY2030 140 120 100 80 116.9 115.2 113.6 60 111.9 110.3 108.7 107.0 105.4 103.7 102.1 100.5 98.4 97.1 92.6 88.7 87.7 85.3 76.5 40 70.5 68.7 69 60.9 60.6 58.6 57.8 57.8 20 0 Expense - Forecast FY2005+Inflation FY2005+Inflation+New O&M from Captial Projects B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 5

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Changing to Strengthen Financial Health • Enterprise Technology Assessment (ETA) – Ending “business as usual” approach – Ten ETA Breakthrough Strategies will help us to: • Achieve cost reduction goals • Implement an IT Service Model to improve service delivery • Enable IT to be a more effective strategic business partner B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 6

B O N N E V I L Setting the ETA Target L E P O W E R A D M I N I S T R A T I O N • Information Technology (Enterprise) – IPR2016 SOY2018 Expense: $97.1 M – SOY2018 Capital: $25.0 M • Combined spend $122.1M; 5% efficiency equates to savings of $6.1M IPR2016 Cumulative Target Efficiency ETA Schedule Baseline Cost Fiscal Year ($M) ($M) Reductions Spend ($M) Short Term - 122.1 5% 6.1 116.0 EOY2018 Intermediate - Q2 122.1 10% 12.2 109.9 FY2019 Long Term - Q2 122.1 15% 18.3 103.8 FY2020 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 7

B O N N E ETA Breakthrough Strategies V I L L E P O W E R A D M I N I S T R A T I O N B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O | P a u l a H a m i l n S L I D E 8

B O N N E BPA Strategic Plan Alignment V I L L E P O W E R A D M I N I S T R A T I O N Goal # 1 Strengthen ETA sustainable = financial health cost management • Reduction of up to $10.5 million of contracting services over 5 years • NERC CIP (Critical Infrastructure Protection) compliance fulfilled through managed services (recommended) • IT contracts management (expansion) • Financial IT model - IT Show Back / Charge Back Model B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 9

B O N N E BPA Strategic Plan Alignment V I L L E P O W E R A D M I N I S T R A T I O N Goal # 2 Modernize assets & ETA shared = system operations environment • Role-based provisioning • Optimizing Agency Prioritization Steering Committee (APSC) • Grid modernization IT infrastructure • Enterprise service management adoption • Enterprise business systems with disaster recovery • Enterprise architecture integration • Analytics capability expansion B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 1 0

B O N N E BPA Strategic Plan Alignment V I L L E P O W E R A D M I N I S T R A T I O N Goal # 3 Provide competitive ETA power products and = best practices services • Grid modernization roadmap projects enable higher transaction processing Goal # 4 Meet customer needs ETA efficiently and = best practices responsively • Grid modernization roadmap projects by enabling IT components B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 1 1

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Building Financial Strength Meeting strategic and emerging business needs by providing business solutions FY2019 - EOY2023 $18.8M which deliver demonstrable positive net value and benefits EOY2019 Q2 FY2020 $6.1M to the Agency and the $6.1M Northwest. EOY2018 $6.1M Over Five Years: $42.5M in Cumulative ETA Savings $60.0M in Cost Avoidance B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 1 2

B Targeted IT Annual and Cumulative Savings O N N E V I L L E P O W E R A D M I N I S T R A T I O N $80.0 $75.0 Targeted Savings $70.0 (Expense + Capital) ($M) $65.0 $60.0 $55.0 $50.0 $45.0 $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $- FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 Targeted Annual Savings Cumulative Savings B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O | P a u l a H a m i l n S L I D E 1 3

B O N N E Status on Phase 1 ETA Target V I L L E P O W E R A D M I N I S T R A T I O N Achieving Phase 1 Targets (1 Oct 2018) Projected Reductions in FTE Costs from FY2017: $4.3M Savings from Not Engaging in ETA External Contracts: $0.4M Deferring Desktop Refreshes: $0.4M Cumulative Miscellaneous Savings: $1.4M Reducing Capital Projects: $6.0M Total Projected Cost Reductions from SOY2018: $12.5M ETA Short Term Costs Reductions Target: $6.1M Projected to Exceed ETA Short Term (EOY2018) Target by: $6.4M B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O | P a u l a H a m i l n S L I D E 1 4

B O N N E ETA Breakthrough Strategies V I L L E P O W E R A D M I N I S T R A T I O N • IT Organizational Optimization – ETA # 1 • Cloud Migration and Contract Management – ETA # 8 • Finance IT Model – ETA # 10 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 1 5

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N ETA Organizational Optimization ETA # 1 Chief Information Officer Enterprise IT Transmission Line of Operational Business Targeted Technology IT Shared Interests Interests Continuous Measurable Improvement B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 1 6

B O N The Need for Organizational Change N E V I L L E P O W E R A D M I N I S T R A T I O N ETA # 1 • Cost drivers and change plan (cont’d) – Adopt Commercial Software Solutions and Limit Customizations • New customization policy in place to reduce O&M costs • Optimize the IT Organizational Structure due to over- lapping and redundant services – Optimize services by organizing IT to deliver solutions based on the IT Service Management industry standard B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 1 7

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Functional Services Based Organization B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 1 8

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Reducing Labor Costs Reduction of 57 Staff Additional reduction of 20 staff planned for FY2019/FY2020 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N | I P R J u n e 2 0 1 8 | B e n B e r r y , E V P a n d C I O S L I D E 1 9