1. Building a Business Plan, Strategy and Roadmap to support Asset Management Initiatives Frank Grablutz (Aqua America) Ross Smith (PA Consulting Group) May 4 th 2005

2. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 2 Gaining sustained executive level support for “GIS Projects” can be challenging We will explore how you can secure budget, resources and executive support for your program by: –Developing a fact-based, business-led “GIS” Strategy and Business Plan –Engaging a wide cross-section of senior stakeholders from the business –Defining performance metrics and targets that are achievable and measurable –Treating your “GIS program” as a Business Transformation (Change) program from day one

3. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 3 We’ll start with a simple premise… The sustainable service delivery capability of a Water Utility is fundamentally based on their ability to efficiently install, manage, repair, upgrade and optimize their deployed physical network infrastructure. –What network assets do we have? –How are our network assets connected? –Where are our network assets? –Where are our customers in relation to our network assets? …and a summary of Aqua Pennsylvania’s drivers for constructing an Asset Management focused business plan & roadmap

4. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 4 Aqua America is the largest US-based publicly-traded water utility…

5. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 5 Aqua Pennsylvania is the largest operating division within Aqua America’s territories (2005 map shown)

6. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 6 Aqua Penn has a “pseudo” GIS but does not currently capture, store or utilize asset data within a GIS

7. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 7 0 5 10 15 20 25 30 35 40 $ million 1996199719981999200020012002200320042005 Aqua Penn’s water Main Renewal Investment program has increased dramatically over the past 10 years

8. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 8 Case Study: Infrastructure Asset Management Project for Mains replacement/renewal… Key Business Objectives: 1.Optimize capital expenditure for effectiveness and efficiency How do we align our systems, processes, data, standards and operations to make the best use of our capital funds for mains replacement/renewal? 2.Determine how to establish the optimum level of expenditure required to sustain/maintain our infrastructure

9. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 9 Mains replacement/renewal decision making is based upon how well Aqua knows it’s own network Understanding what is happening to aging infrastructure in the distribution system is important for future decision-making about public safety, risk management, replacement capital projects, service reliability and future maintenance work loads These decisions will be aided by certain information or indicators. Examples include the type of pipe, condition of pipes, leak rate, public safety, environmental impacts, criticality rating etc. How effective is asset-related decision making? Is it having a beneficial impact for the business and customers?

10. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 10 Users of network asset information are diverse… Customer Service I want to quickly and efficiently connect new customers or respond to quality issues. Main Break Repair I want respond more quickly when a network fault occurs. Capital Budget Planning I want better allocation of capital expenditure. Asset Valuation I want to be able to value our network assets. Marketing I want to better target prospects with marketing campaigns. Installations & Repair I need to action a workorder on a network element. Network Design I want to do network planning and design using quality network data. Asset Utilization I want to analyze network optimization. Fire Hydrant I want to better manage public safety by systematically improving fire flow Service Quality Strategy We want to minimize dirty water complaints and improve services on our network. Outage Management Which customers were affected by the outage? Plant Enquiry I need to provide our records for Digging Permits NETWORK ASSET RECORDS Regulatory Compliance I need to ensure we’re complying with the Utility Commission

11. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 11 There appears to be an obvious answer to overcoming these challenges! GIS technology is a natural fit for Water utilities seeking to improve decision making, improve customer service, competitive advantage, cost savings, regulatory compliance etc in a cost effective and efficient manner. It has unifying capabilities that helps overcome existing problems with storing, disseminating, managing and using spatial data that describes the physical network. Prove it!

12. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 12 One approach is to use a One Page Strategy to develop a fact-based, business-led GIS/Network Asset Strategy The One Page Strategy is an approach to developing a creative, ambitious and achievable strategy and building commitment to its implementation. Cross-functional involvement is the key to success – building commitment and ownership within the business for the outcomes

13. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 13 The One Page Strategy provides a framework to build a business case, strategy and roadmap

14. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 14 Understanding the business’ goals and objectives is critical to demonstrating value derived from the GIS Focusing on business outcomes ensures that we remain benefit-focused while we identify & plan initiatives which will improve our decision making capability and overcome “information anarchy” Business Goals & Objectives are hollow without defining targets. Meaningful metrics bring your business case/strategy to life and provide a means to demonstrate business value

15. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 15 An honest assessment of the ‘business design’ (people, process, technology, data) reveals strengths & weaknesses Assess your Business Design – the technology, data, processes, people and organizational structure supporting asset-related decision making

16. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 16 We are now in a position to identify tactical and strategic initiatives (projects) that will address issues identified We can now define the scope, resource requirements, duration, budget etc for discrete projects that will effect the changes required to meet our goals & objectives.

17. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 17 Each initiative identified is grouped into an appropriate phase of delivery matching resource/budget constraints Roadmap Initiatives Benefits-focused delivery

18. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 18 The One Page Strategy output encapsulates all relevant inputs, analysis and findings Example Business Goals & Objectives Supported by Targets/Metrics What do we want to achieve? What’s wrong with how things are today? What needs to be changed to reflect how it should be e.g. vision of tomorrow? What do we practically have to do?

19. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 19 Gaining sustained executive level support for “GIS Projects” doesn’t need to be challenging We have explored how you can secure budget, resources and executive support for your program by: –Developing a fact-based, business-led “GIS” One Page Strategy –Leverage Industry Best Practices by applying the Capability Maturity Model to focus on key capabilities –Engaging a wide cross-section of stakeholders from the business to identify strengths & weaknesses in the Business Design –Defining performance metrics and targets that are achievable and measurable –Treating your “GIS program” as a Business Transformation (Change) program from day one –Building a roadmap with gated check-points…building on each success Stay benefits-focussed. Gain consensus. Foster ownership. Enable communication.

20. © PA Knowledge Limited 2003. All rights reserved.-xxx- 25/03/2002- 20 Questions… ? Ross Smith Managing Consultant PA Consulting Group Frank Grablutz GIS Manager Aqua America