COMPUTERS & AUTOMATION TECHNOLOGY: City Leverages Technology to Improve Business Practices
By Ronald G. Lauer and Mark Premo
The Anchorage Water/Wastewater Utility (AWWU) formed its first Information Technology (IT) Division and IT Plan in 1992, embarking on a journey which has enabled it to take full advantage of IT Technologies in the Information Age. In 1995 AWWU commissioned Westin Engineering to assist in creating an IT Master Plan that made major updates to its in-house annual planning activities and set the scene for the business success it has achieved today.
Since the adoption of the plan, the utility has been working aggressively to implement the following strategies:
- Improve the computing environment enterprise-wide through a reduction in system complexity and diversity, and standardization of applications.
- Reduce the amount of paperwork through the use of email, a company Intranet, GIS, and the Internet.
- Remove islands of automation and integrate data.
- Enhance organizational effectiveness by improving business processes and workflow.
- Replace obsolescent equipment.
- Expand the utility's IT infrastructure, including adding bandwidth and improving reliability.
With a major portion of the plan accomplished, the utility has realized significant benefits from its investment in IT technologies, and with Westin has recently enhanced the plan to lead the utility into the new millennium.
Management Support
Management support is essential in creating, maintaining and executing any plan. This is especially true of IT plans since they are intrinsically more difficult to build, comprehend and gain agreement on. Gaining management support is one of the most important outcomes of the IT planning process. A sound management team can learn to appreciate the true needs of their organization through need assessment workshops and form a vision of the future benefits of leveraging IT Technologies. The process brings the management team closer together and allows them to emerge as a unified whole with one common vision of the future.
Success is achieved gradually by:
- Acceptance and understanding of IT objectives by utility's senior management.
- Support for an aggressive implementation schedule to meet the expressed needs.
- An increase in capital and operational funds to accomplish IT objectives.
- Acceptance that the IT Plan is as integral to the success of the utility as any other plan (Strategic Plan; Long Range Financial Plan; Capital Improvement Plan; Water/Wastewater Master Plan; etc.).
The Plan
The AWWU master plan recommended the utility undertake more than 50 individual IT projects to help achieve its objectives. The projects were grouped together to meet the six strategies mentioned above.
After acceptance of the master plan by senior management, the utility embarked on an aggressive implementation schedule by allocating approximately 15 percent of its revenues to IT projects and operations. The following major improvements were achieved enterprise wide: Data Integration, Paperless Office, Technically savvy workforce, Technical Infrastructure, LAN and WAN expansion, Increased Technology in the Field
Return on Investment— ROI
During the eight years from 1992 to 2000, the Anchorage Consumer Price Index rose 18 percent; the net plant demand rose 4 percent; while AWWU's operating budget increased only 4 percent. The end result was a net income of over $40 million during this time period with no rate increases, and a resultant high bond rating in the market.
During the previous eight years, from 1983 to 1991, AWWU lost almost $2 million and had to increase rates a number of times just to survive.
In 1992 a major change in AWWU's attitude toward Automation and Information Technologies occurred with the formation of its IT Division and the initiation of IT planning activities. Since then, AWWU has updated its IT Strategic Plan yearly, and budgeted enough money in its Capital Improvement Budget (CIB) and its Operating Budget to address the immediate, tactical, and future needs of its utility business enterprise. The end result of leveraging IT technologies in the operation of its water and wastewater business has provided a significant return on its investments.
Further, AWWU has seen a reduction in facility space requirements as paper has been turned into electronic media and personnel storage space requirements have been reduced. Better customer service has resulted with AWWU's overall satisfaction rating increasing from 90 percent to 95 percent over the last 7 years, and the response time for AWWU to locate and make repairs has decreased significantly.
In the face of increased pressure to meet the demands of a growing customer base with higher service expectations, more stringent water quality standards, and increased operational needs, AWWU has managed to do more with less. It has done this by successfully hiring skilled staff who want to work at the utility because it's a good place to work. The retention rate is high due to the active training programs that keep the professional staff interested. By leveraging technology AWWU has been able to grow its business and its staff's skill level without growing the number of staff members.
Cost of Ownership
AWWU's total IT Capital Improvement Plan investment from 1992 to 1999 has been $17 million. This amounts to 11 percent of AWWU's overall CIP budget for this time period. AWWU's commitment to leveraging IT technology wherever practical is seen in the level of investment made to date.
Of primary importance is the accompanying level of IT funding included in the annual operating budgets during this same time period. In 1992 $1.6M (6 percent) of the operating budget was spent in support of IT projects to help build AWWU's skill base, train its staff, and to maintain its computing infrastructure. Eight years later the percentage has risen to 9 percent or $2.5M of the operating budget, while AWWU's overall operating budget only rose 4 percent.
AWWU has 220 computers which are deployed to 84 percent of its staff. Three major systems are in operation; PeopleSoft, Maximo, and SCADA plus 35 small to medium size systems. All the major utility applications are represented by these installed systems.
A staff of 15 full time IT personnel out of a total of 263 AWWU employees maintain the existing systems and manage the new CIP IT projects.
Conclusion
The Anchorage W/WW Utility has been aggressively implementing its IT Plan over the past eight years. The utility has seen significant reductions in cost, has a much more technically literate work force, and has shown the ability to hold its rate structures constant. Customer service has improved measurably and it has seen its IT Plan prove its resiliency in the face of unexpected events. The major revision that has just been completed should continue to move the utility toward its goals. The utility is well on its way to being completely "wired" (or perhaps "wireless'ed") and paperless (at least for its own internal processes).
Lessons Learned
What Did We Do Right
- Used & Enforced the IT Plan- it didn't sit on the bookshelf and gather dust
- Sold the CIP based on the plan; got the $ to follow the plan
- Common Database— Oracle selected in 1996
- Data Model— helped the Utility purchase the right products and achieve maximum data integration
- Staffed with the right skills to make it happen
- Technology Training- never turned down a training request
- Used a consulting firm to expedite process and bring an outside opinion
What Would We Do Different
- Bring up IT staff skills quicker
- Move quicker to client/server technology
- Increase Project Management resources in IT
- Move technology to operators, maintenance, and field personnel quicker
- Early involvement of General Government IT
About the authors:
Ronald G. Lauer is Chief Engineer for Westin, based in Campbell, Calif. Mark Premo, P.E., is General Manager of the Anchorage Water & Wastewater Utility.