Appendix D - Project Charter

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r ject

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Table of Contents

Project Background Information

... ... ... ... ... ... ... ... ... ...

Business Need for CIS Replacement - Operational Neccessity... Business Need for CIS Replacement - Strategic Positioning ... Project Purpose... ... Project Objectives ... ... ... ... ... ... ... ... Project Benefits... Guiding Principles ... ... ... ...

""""""'"'''' """''''''''''

""""""""'"

"'''''''''''''' 7 Project Scope... ... Scope Overview... ...

"""""""'"

... ... ...

Business Process Model. ...

... "'" ... ... ... ...

Northstar SAP CCS Developments ...

Reports """"""'"

... ... ... ... ... ... ...

1.4

Forms 11

Type and Amount of Data Being Converted ... Target Users... ... ...

... ... ... ... ... ... ...

Items Out of Scope... . Cost.. ..

.. .. . . .. .. . . .. .. .. .. .. .. .. .. .. . .. .. .. . .. .. .. . . .. .. . . .. . .. .. .. .. .. .. .. .. .. .. .. .. .. . .. . .. ... .. . .. . .. .. .. .. . .. . .. .. .. . .. . . .. . . .. .. . . .

Project Approach... ... .

Timeline & Phases ... ...

... ... ... ""'"'''''''''''''''' ... ... ..

Key Assumptions & Dependencies ...

Methodology... .

4.4

Project Management Processes... ...

... ""'" ... ... ... Progress Reporting ... """""""'''''''' ... ... ... ... ""'''''' "'''''''''''''''''''''''''''''''' ... Issue Management.. """'" "'"'''''' ... "'''''''''''''''''''''''''' ... ... ... ... . Risk Management... .. Change Control... . RACA and DCW... .. Quality... ... . Financial... ... .

Solution and Delivery... ...

... ... ... ... ... ... ...

Testing ... 32

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Project Charter 5.4 Project Organization... ... ... ... '''''''''''''''''''''''''''' ... Governance Structure... .

Roles & Responsibilities... .

Blueprint Confirmation Organization Structure... ..

Skils & Knowledge Transfer... ...

"'"'''' ... ""'''''''''''''' ... ...

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Appendix

Project Acceptance and Completion... .

Completion Criteria... .

User Acceptance... 53

System Management Acceptance... 54

BC Hydro Business Process

Model... ... ...

Application

Architecture... ..

EAI

Approach... ..

Master Data

Approach...

Change Management Strategy... ..

Conversion

Strategy/Implementation... .

Technology... ..

Minimum Deliverables

List... ... .

CIO BCP

Guidelines... ....

Number of Users by Course Hours...

Converted CIS

Data...

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0 Project Background Information

BC Hydro s Customer Information System (CIS) is the key enabler of our customer services

capabilties. This strategic asset collects and stores our customer account inormation. It supports the

integrated delivery of our customer care and revenue cycle processes, including meter reading,

producing our customers' bil and collectig revenues. It also supports our product development and

delivery processes. Our current system is highly customized and 30 years old. We are

recommending ths system be replaced as soon as possible with the SAP CCS system. The two main reasons for this change are operational necessity and strategic positioning. This rationale is outlined

below.

Business Need for CIS Replacement - Operational Neccessity

Our current system is highly customized and 30 years old which means:

II

We are facing increasingly significant risks of system failures, downtime or biling inaccuracies

resultig in loss or delay of revenues and negative customer impacts associated with inaccurate

or delayed bils.

II It

_{is challenging, costly and increasingly risky to maintain. It is also difficult to find and retain} people to maintain and enhance it.

ii The current system _{is a major roadblock to making timely, efficient and cost- effective changes}

and enhancements. It is challenging and difficult to:

introduce new products and services (e.g. Power Smart initiatives)

meet changing and increasing customer and/ or business needs

support opportunities aligned with BC Hydros Distribution Line of Business and Customer

Services' strategic objectives.

Replacing ths CIS system with SAP CCS, wil address these operational issues.

Business Need for CIS Replacement - Strategic Positioning

A new CIS wil provide BC Hydro and the new joint venture with the foundation to:

II Provide _{flexible customer-centric metering, biling,}_{payment and service capabilities (current}

system is limited by premise/ account functionality).

II Build future capabilties such as _{expanded customer relationship management (CRM)}_including

sales, marketing, segmentation, sales force automation (SFA), and _{risk/profitabilty analysis. The}

new CIS wil also provide a platform to enable new metering and biling technologies and

capabilties such as Time of Use (TOU), Automated Meter Reading (AMR), Real-_{Time Pricing}

(RTP), and other cost effective functionality.

II Support bil _{unbundling requirements that may be defined by the Energy}_{Policy Review.}

Functionality that can be supported includes registration/ enrolment, settlements, churn analysis, and metering/ field service switchig (for both mass market and commercialj industrial

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Ii

Strategically enable large-scale, multi-company, multi-_{jurisdictional customer service offerings.}

BC Hydro, though its _{proposed shared services venture with Accenture (known as NewCo),}

wil

have an opportunity to attact additional utility customers. Recent market intellgence indicates

that a number of energy companes are exploring the potential of outsourcing their customer _care

activities. NewCo is already pursuing several customer care growth opportunities.

Wing

customer care business early is key to establishing NewCo s credibility and a foothold in the

marketplace. It is also a defensive strategy given the players emerging in the Canadian

marketplace. The primary asset that Customer Services and NewCo need to achieve the growth

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Project Charter . """- """'--,,' 0 Project Purpose

The key purpose of this project is to replace the core functionality of our legacy CIS system with the

SAP CCS solution with minmum disruption to the business and our customers. The system wil go

live on December 29th_{, 2003 (date to be finalized at the end of blueprinting). We want to maximize}

future flexibility and ease in system upgrades. (See Section 3.1 Scope Overview)

Project Objectives

We have identified several critical objectives. The following project drivers _{wil ultimately playa}

critical role in the future:

II To provide for the replacement of old technology and retiring support staff. _{BC Hydro is}

operating a CIS that presents growing IT support staff problems, support issues and architecture

limitations.

Ii To provide acceptable _{levels of customer service. The need for}_{BC Hydro to satisfy customer}

needs and provide acceptable levels of customer service is a _{primary objective and critical}

requirement. The abilty to support numerous customer communication paths_{, a single point of}

customer contact_{, development of a customer relationship, and abilty to provide comprehensive}

services is crucial to future success.

II To provide flexible biling capabilties. Overall flexibilty in the set-up and biling of accounts

to accommodate various complex rates and pricing structures: the abilty to aggregate biling across customer accounts including national accounts, aggregate biling across a customer_{s total} products and services, and to separate biling components in the future.

II To provide acceptable _{customer self-service. BC Hydro needs to implement a}_{CIS infrastructure}

that provides internal customers with extensive access to inormation and provides external

customers with self-service electronic access.

II To accommodate the _{offering of new products and services. The need for}_{BC Hydro to offer}

new products and services in a timely and competitive manner. And build the foundation for

non-electric service that may include gas, water or municipal services. BC Hydro is seeking a

solution that promotes flexibilty and a competitive launch period of up to four _{month for a}_new product or service.

II To provide for third party biling. The _{solution must provide biling line items to}_{thrd party}

biling agents and receive line items for inclusion on the BC Hydro

bil.

II To provide a _{marketing and sales focus on potential customers. A}_{shit from current}_customers

to potential customers wil occur as the utility moves into an open retail environment.

II To provide customer choice within

a bil unbundling environment. While the retail

_{market is}

not expected to open for customer choice in the near future, the solution wil provide for

customer acquisition, customer enrolment, forecasting and scheduling, settlement_{, commodity}

management, data collection and data communication functions that would be activated when required.

II To provide BC Hydro s Distribution Line of Business with the abilty to begin to segment

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Project Benefits

The two primary reasons for recommending the implementation of a new CIS _{are outlined in section}

2 above and include:

ii Operational Necessity - To address _{the operational issues.}

!! Strategic positioning - A new CIS wil provide _{BC Hydro and NewCo with the foundation to}

provide flexible customer-centric metering, biling, payment and service capabilities (current

system is limited by premise/ account functionality), build future capabilities and strategically enable large- scale, multi-company, multi-jurisdictional customer service offerings.

Highlights of additional financial benefits associated with this business case include:

II Avoided system _{enhancement costs of $18}_{milion (net present}_{value). A new CIS}

wil avoid

costly and risky enhancement expenses associated with our current system.

11 Reduction of $21 milion (net present value) in System Operation and Maintenance Costs for the

new system when compared to the current CIS.

II Efficiency savings _{of $37}_{milion (net present value). A new}_{CIS enables Customer Services to:}

improve the cash flow streamline business processes automate high volume transactions

reduce cycle times

build scale, which reduces the cost per customer

The ten-year SV A for this project ranges from negative $19 _{milion to positive $3 milion and the}

15-year SV A ranges from $16 milion to $43 milion. _{Taking into account the risks of operational failure}

scenarios for the current system changes:

lO-year SV A ranges from negative $13 milion to positive _{$16 milion}

II 15-year SV A ranges from positive $29 _{milion positive}_{$74 milion.}

It should be noted that the SV A calculations include regularly scheduled upgrades of the SAP solution every 4 years at an average estimated budget of $6 milion.

Benefits Realization

During the Blueprint Phase, the project team developed an _{intial Benefits Realization}_{Report. The}

report contains thee components, which refer _{back to the original business case. The Project Team}

wil update the benefits realization report in the Fall of 2002 and have business sign-off by December

2002. In January 2003, the project team _{wil work with the key}_{business representatives to}_{begin the}

process of measuring the baseline in the applicable areas identified in the Benefits Realization _Report. The project wil establish a monitoring and tracking process that _{wil assist in collectig enough data} for the baseline as well as creating a process for measuring the results in the post go-_{live phase.}

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Guiding Principles

Key stakeholders developed the following guiding principles in March of 2001. These principles

wil

guide the process redesign and implementation of the new system.

II Maximize _{flexibilty to provide multi-client, multi-commodity, multi-jurisdictional customer care}

functions.

il Maintain _{flexibilty to operate under different business models and organizational structures.}

I1 Maintain _{flexibility to offer clients different products and services, including capability to serve}

transmission-level industrial customers.

II Streamline business processes to reduce _{inefficiencies, limit non value-added activities, reduce}

cycle time and lower costs.

ii Implement a _{single view of the customer.}

II Decisions are based on _{measurable business benefits.}

II Build capacity _{for timely, accurate and flexible data management.}

II Build on our multi-channel capabilties. Entice _{customers to choose self-serve options.}

II Apply _{Project Management (on Time, on Budget, in Scope) & Change Management practices to}

all activities.

II Create a culture _{where we value, invest in and challenge employees, and where employees are}

flexible and open to change.

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0 Project Scope Project Charter Scope Overview

Northstar wil implement core functionality in the areas of Customer Contact, Meter Reading & Community Customer Services, Biling, Credit & _{Collections for BC Hydro}_{s residential and}

commercial customers (transmission level customers are out of scope and handled by Lodestar) This

foundation wil allow for additional growth in functionality as required. Our guiding principles (see

section 2._{3) ensure that we maximize the system flexibilty. However, specific set-up and} configuration wil be required to activate some of the additional features (e.g. biling of another commodity). A key objective is to ensure that the core functionality of our existig CIS

incorporated in the new solution. At the same time we want to maximize future flexibilty and ease in

system upgrades.

The solution wil also include multi- commodity, multi- jurisdictional, multi- product (e.

gasification) functionality. The SAP CCS solution provides more capability than wil be activated in

this project (shown as Core Capabilties in the below chart). Future releases of the BC Hydro solution wil expand the base capabilty to activate existing SAP functionality for key capabilties _{such as}

CRM, Transmission Level Biling, Data Warehousing, etc. as prioritized by business and customer

needs.

This phased approach is a proven method of delivering business value with the lowest risk to

existig operations. This 'best practices' delivery model has been successfully deployed at similar

utilities worldwide.

Replace existing CIS business processes

Effciently transition critical call centr ,

billng, and credit/collections functions to new solution

Comprehensive Customer Care Functions - Billng, Orders, Meter

Reading, Financials ,Credit &

Collections, Device Mgmt, Payments)

Implement a Customer Centric

Capabilit

Provide the foundation for future

growth strategies

Deepen relationships with customers Activate additional components

Integrated Sales & Marketing

capabilties capabilties such as:

, Campaign management &

segmentation

, Notify targeted customers of new services

Automated con-spondence c Online rate analysis

. 3 re Part pass through biling

Enhance the basics to begin to offer additional product and services Futue Capabilities: apx $10-15 million (proposed fuding under Newco RFEI)

Current Business Case: $62.8 millon

if .

. ... ...

;1

Competitive Capabilties

Based on deregulation timeline & specifc market rules

Activate deregulation capabilties - unbundled biling, customer specifc

pricing, Joint invoicing,

aggregate billing, registration, Inter-company

data exchange, financial

settlements

$ I 0+ millon

The goal of the design and development effort is to provide a customer centric and flexible system using the functionality SAP CCS offers. Key to this is the BC Hydro Business Process Model.

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Business Process Model

The BC Hydro Business Process Model, refer to Appendix A, reflects activities and processes utilized

to meet external and internal business requirements for a modern utility company. The Customer

Information System (CIS) is a tool that automates and facilitates many of these processes and as such

the business events identiied in the BC Hydro Process Model are those that effectively use and

interact with the CIS system. A business event is defined as a self-contained series of tasks or steps that are triggered either through a request from a customer, business user, or as a step intiated from

another business event. For example, a customer triggered High Bil Enquiry may trigger the following business events:

II Business Events are categorized by sub-processes that belong to a business process. For example,

the "Handle High Bil Enquiry" event belongs to the sub-process of "Customer Enquiries" that

belongs to the process of "Customer and Business . The grouping of similar and related events helps facilitate process design and also training and change management requirements.

II The BC _{Hydro Business Process Model consists of 122 business events.}_{The analysis of the}

business events was performed over several weeks by the Core Solution team and involved several iterative steps. Accenture provided a Utilities Business Process Model as a startig point

that consisted of approximately 200 business events. The model included events that are typical and common across clients regardless of business environment, as well as business events that are more specific and unique to clients. This Process Model was refined as a project to fit BC Hydro

business needs.

The Business Process Model was then divided into four functional areas:

II Account _{Management - 36 processes, including Payments, Credit Management, Financial}

Adjustments, Revenue Reporting

II Biling - 29 processes, including Customer Bils, Rates, Special Plans, Rebates/Rebils,

Concessions

ii Customer Care _{- 23 processes, including Inquiries, Interactions, Move-}In/Out, Contacts

11 Device Management - 34 processes, including Scheduling, Meter Reading, Premise Creation, and Service Order Management

The teams further refined the BC Hydro Business Process Model by an in depth analysis of each specific functional area. A cross verification was performed against existig business processes

determined by using Training binders and processes, thus ensuring there were no gaps in the Process

Model.

Another key area of impact is in the developments required to implement SAP CCS. The

developments include interfaces, enhancements to SAP CCS, workflows, reports and forms ranging

in complexity from 'Very Simple' to 'Very Complex . The following table is a summary and complexity indicator of the developments required.

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Northstar SAP CCS Developments

Northstar SAP CCS Developments Summary

Complexitvl\

Type Very Complex Complex Medium Simple Very$imple Total

Interfaces CCS Enhancements HTML Enhancements Workflows Reports Forms

1\ _{As of the Blueprint Phase.}

* Note: Totals for Enhancements and Workflows are for High and Medium Priority only

** A detailed list of interfaces can be found in Appendix B

Reports

The reports listed in the table below are evolving, as there are still change requests outstanding that

wil

inuence the

number and type of reports on this list. These are customized reports and are in addition to the standard SAP reports that are deemed necessary by business operations.

1 12 7 4

11321

11322

11323

11324

1 14 3 1 1 14 5 1

52211

5 2 2 12 5 2 2 3 5 2 2 5 5 2 2 7 5 2 2 8 1 12 2 1 1 12 4 1 1 12 4 2 1 12 7 1 1 12 7 3 1 4 2 1 1 4 2 2 1 5 1 1 1 9 1 1 1 9 1 2 2 2 5 1 2 4 1 1 2 5 1 1 1 2 3 1 1 3 2 1 1 3 2 2 1 3 2 3 2 6 9 1

Credit & Collection Arrears Analysis - Open items by acct class or customer class Conditional Sales Biling Summa

Month end Ledger report (Loan Register for Conditional Sales) Conditional Sales - Interest cancelled on Term Completed

Conditional Sales Control Report -Power Smart Home Improvements Plan Online Miscellaneous Adjustment Audit Report

Report of Municipal Transit Levy for Urban Transit Authority Billng Adjustments Detail & Summary Report

Daily/Monthly Report of Revenue biled to GST Exempt Customers

Billing Revenue by SIC Group

Electric Residential Space Heating Statistics

Billng Revenue and Statistics Source Codes Summarized by Cost Centre / Region Biling Revenue and Statistic Number of Customers by Capital District

Dunning Statistics Re ort

Ho Ho Christmas Letter Re ort Cut for non- a ment not finalled

Dunning and Interest Lock Report

Monthly Account Listing of Write-offs, Recoveries & Adjustents

Bad & Doubtful Accounts Value Analysis by Area

Outsorted Printed Invoice Report Electric History (AHR)

Billing Revenue and Statistical Statement

Biling Invoicing Error Report

Supervisory Listing of Accounts not Billing Meter Reading Route Changes

Report of Forced Move-outs for a Future Date Name Change Audit Report

Service Order Monitoring Report

Meter Reading Snapshot - Outstanding Implausible Meter Readings

Meter Reading/Billing Performance

Monitor Consumption Trends Report

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Forms

The forms listed below are still evolving as there are several outstanding change requests from Blueprint Confirmation that require approval.

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Type and Amount of Data Being Converted. Appendix K lists the CIS data items that wil be

converted to CCS. The table below shows specific restrictions and assumptions for the

individual data items.

Area Data Objects Requirements Approach No. Volume ref. Biz Processes

history

Device Mgmt Meter 1. Last two readings (actual 1. Last two readings wil be converted. _{2 mo} _200,_{000 1.} _{Customer Service}

Reading estimated) are required in order 2. Reading history (more than last 2 Bils

History to provide meter reading readings) wil not be available to the

information on customer bils. end-user for online view in IS-CCS. User will access legacy system to view reading history for 6 to 12 months after go-live.

Consumption 1. The invoice displays up to 12 1. 13 months of consumption history 13mo 392000 1. Customer Service

History months consumption history on wil be converted and used for graph _Bils

the graph, depending on the on customer bills. 2. Account Online

length of time in the premise. The 2. 15 months of consumption history

conversion process must migrate wil be converted for AOL customer

enough consumption history to (about 44 000 accounts).

support printing the invoice

graph.

2. Consumption history for accounts

currently registered on Account Online will be required.

Period 1. Period Consumption information 1. Period Consumption for all active N/A 646,000 1. Meter Reading Consumption is required to allow estimated installations will be converted. estimation

reads to be correctly calculated in _{2. Meter Reading}

IS-U CCS. Period Consumption _validation

is also used for high/low edits

during the meter reading

validation processes.

Cust Care Customer 1. A conversion contact (remarks) 1. 1 month of remarks for active 12 mo 700,0001. Credit

Contacts wil be created to indicate the customer and 12 months for closed _management credit action history; for example customers wil be converted. 2. General retrieval

current and previous to maximum 2. Customer contacts (temporary and enquiry

of 12. remarks) from the legacy system are 3. Ad hoc customer

recorded as generic customer _{correspondence}

contacts. 4. Customer credit

3. Since legacy CIS system stores _enquiry

temporary remarks as free text form, it needs to required to categorize type of remarks by CSR or user group who are concerned in

temporary remarks. In next phase, detail approach wil be discussed.

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history

Credit History 1. Credit history (current month + 1. The project team wil convert N/A N/A 1. Credit

previous 12 months) and the creditworthiness for each business management credit status value wil be partner. The creditworthiness wil be 2. Customer credit

converted as a conversion in line with dunning level on enquiry

customer contacts. The credit arreared item level or account level. status will also be used to assign 2. A dunning level and procedure wil a creditworthiness score. be assigned for each converted

contract account object.

3. The last twelve months of credit

history will be converted as a contact note. (for closed accounts)

4. Any additional credit enquiries can

be addressed by using legacy

applications.

Biling Budget Billng 1. EP accounts in the legacy system1. Equal payment plan (390,000 11 mo 105000 1. Equal payment

Plan wil need to have eleven accounts), Pay as you go -fixed plan

installments converted into CCS (110,000 accounts), and Pay as you 2. Pay as you go

-regardless of the customer's go - variable (55,000 accounts) wil Fixed

progress through their EP year. be converted with budget biling plan 3. Pay as you go

-2. EP invoices sent out of the legacy object. Variable

system wil need to be flagged in 2. Due to function gap between CCS CCS so that they are not resent and legacy CIS system, all

after conversion. remaining installments wil be

re-3. Consideration will be required for calculated based on 11 installments.

those accounts where the And closed installments wil be

adjustment has be applied in the moved as same amount as legacy legacy system but not yet billed. CIS system has.

Customer would have been 3. A cumulative amount calculated from notified of the adjustment on their gap amount between monthly last invoice. installment and actual consumption

4. Although the variable biled wil be converted with accumulated balance from CIS separate field.

will not be migrated to CCS, the 4. All partial bills wil be created with comparable installments billed document object and corresponding and unadjusted 'cost of energy payments wil also be converted wil be converted. These using payment object. accumulated amounts should

equal the accumulated balance at conversion.

Biling 1. Post-conversion cancel/rebil or a 1. No billing documents are converted N/A N/A 1. Individual reversal

Document pre-conversion bil wil be a multi- adjustment step manual process.

2. A very high percentage of

cancel/rebils occurs in the first month following the bil, so the volume of manual cancellrebill should decrease rapidly.

3. High bill inquiry can be answered by consulting other application for

history application.

Acct Mgmt FI- 1. LPC calculated in CIS system 1. 11 months of documents associated see left 070,000 1. Equal payment Documents before cutover should be with budget billing plan will be column plan

converted over to SAP. converted (555,000 customers) 2. Pay as you go -2. The statement section of the 2. To provide bil messages, 1 month Fixed

invoice includes all financial of last biled amount will be 3. Pay as you go

-transactions (charges & converted (about 1 100,000 Variable

payments) created since the last excluding BBP customers) 4. Customer service

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history

3. Charge and payment history for amount, LPC, biled not yet cleared 5. Account Online

accounts currently registered on etc., will be converted (applied 80% 6. Payment

Account Online will be converted from 1100000 accounts) 7. Invoice

into CCS. 4. To be able to provide 2 years of 8. Dunning

4. EP & PG invoices sent out of the customer balance information for 9. Late payment

legacy system wil need to be AOL, about 600, 000 documents will charge flagged in CCS so that they are be converted.

not resent after conversion. 5. All un biled and billed but not yet

cleared amount (open NRs) wil

be converted into CCS.

Payments 1. Charge and payment history for 1. All closed payment data for budget _{see left} _3,226,_{250 1.} _{Equal payment} accounts currently registered on biling plan will be converted for column plan

Account Online will be converted annual review. (applied 40% from 2. Pay as you go

-into CCS. SSP customers) _Fixed

2. EP & PG invoices sent out of the 2. To provide bil messages, 1 month 3. Pay as you go

-legacy system wil need to be of last payment wil be converted. Variable

flagged in CCS so that they are (for about 1 100,000 customers) 4. Customer service

not resent after conversion. 3. To be able to provide 2 years of bils

customer balance information for 5. Account Online

AOL, about 600, 000 payments will 6. Payment transfer

be converted

Target Users

The target users are predominantly Customer Services employees who utilize CIS, and to a _lesser

extent Distribution and Marketing. There wil be approximately 1100 target users:

Ii Primary Users: _{Around 50% of users (e.} _{: Call Centre employees)}_{wil require the system to}

complete more than 50% of their work.

II Secondary _{users: Around 40% of users (e.} _{: Electric Service Coordinators)}_{require the system to}

complete 25% of their activities.

II Casual _{users: Approximately}_{10% of users (e.} _{: Meter Readers)}_{wil use the system only}

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, _.

---,--..,,.-Items Out of Scope

The scope of Project Northstar is defined in detail in the Blueprint Confirmation materials. (Dated

Aug. 30, 2002) Below are indicative highlights of key scope items. As a general principal_{, new}

business requirements, which are not supported by the current CIS, wil be considered a new scope

item and require business sponsorship and additional funding (if approved). Contingency wil be

used, at the discretion of the Operatig Sponsors and PMT, to fund unforeseen cost overruns (which may be the result of incorrect assumptions or

estiates).

This project covers a comprehensive range of processes to meet today s business requirements. The

SAP CCS solution is capable of a variety of other functionality, which BC Hydro may want to make

use of later. For this reason, some systems currently utilized wil remain in place but may be replaced in subsequent phases. These systems are:

11 Electric Meter Records System _(EMRS) 11 Atlas system for agency management

II Sundry Accounts Receivable _{(expected to be subsumed by PeopleSoft Financials)}

11 AccountOnline (AOL) for electronic bil presentment and payment

II Sales and Marketing Information (SAMI) for customer management

Additional areas that are out of scope include:

II Redesign Service Bil- To avoid any unnecessary customer impact during go-_{live (which could}

result in operational impacts), we are

adoptig the

current service invoice format. Our goal is to avoid any visible change in service, including the bil format, at go-live.

ii Customer Data _{Warehouse - The present CDW}wil not be recreated with new data from the new

CIS. Much of the data currently requested through the CDW wil be supported via on-line and

customer ABAP reports (see above

reportig

section). Strategically, we endorse the subsequent

implementation of the SAP Business Warehouse (BW) which is included in the BCH SAP

software agreement and responds to ad-hoc requests in the most efficient long-term manner.

II Customer _{Relationship Management -}_{Whle we wil place a}_{signicant amount of}_{attention on}

developing a customer-centric solution, Northstar wil not include the implementation of sales,

marketig or advanced segmentation included in the CRM module.

II Industrial Biling - Complex biling for industrial customers wil not be implemented in the new

CIS. A separate project could enable this capabilty and replace BC Hydros LodeStar system.

II Energy Data Manager - EDM for management of interval data _{wil not be implemented}_{by this}

project.

I! Time of Use _{- TOU rates and offerings are not included in ths project.}

II Changes/updates to _{core SAP code are not in-scope. The technical developments}_{identiied by}

Northstar are all customizations required to satisfy business requirements. No changes to core SAP code are to be done by the development team.

II Changes in _{business requirements within in-scope developments that are identified after the}

blueprint phase are considered out-of-scope. These changes must flow through the change control process to assess impacts to the development and other teams. Any interface or other

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entity which the team missed during Blueprint and Blueprint Confirmation, wil be assessed by

the project team and escalated if necessary for approval via the Change Request process to be

funded by the project contigency.

ii Only _{historical data required for accurate meter reading estimation, validation and}_{biling wil be}

converted. Also_{, the minmum amount required by the regulatory commission wil be converted.} (See section 3.1 for details) All other historical data is out of scope.

ii Closed and _{written-off customer account information is out of scope unless a debit/ credit balance}

exists, which is in scope. .

II Some data _{that exists in the legacy systems}wil not be converted based on age, relevance, etc. An

archiving strategy wil be required by BC Hydro to handle such data. The archival may be in the

form of transferring the data to data files or printing and storing the hard copies of the data. The archiving strategy and archiving is not in scope, however the project wil complete an Archiving White Paper.

II Changes as _{a result of a multi-company or multi-service configuration}_{wil require a new sizing}

exercise to define the hardware requirements and are not in scope.

ii Business Contiuity - _{Northstar wil ensure complete recovery and restore}_{capability for CCS.}

Current Customer Services BCP procedures wil be updated where impacted by the CCS

implementation. However, business continuity tasks for systems and infrastructure not directly related to CCS and its operations are outside the scope of Northtar. The project is, however,

committed to supportig a Customer Services led initiative to resolve with broader business BCP

requirements as outlined by the CIO office and _{wil include a review of the}_{14 step CIO process}

(see Appendix I).

(19)

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Northstar

Project Charter

Cost

Based on the above scope and the assumptions outlined in this document, an all-inclusive

implementation and ongoing cost model has been developed and verified against projects with similar profiles. In June of 2002, the project team reviewed these options and _{contiues to} recommend a full system implementation. The $62.8 milion represents BC Hydros maximum expenditure for the

Northtar

project, and includes:

icensing

Labour - Accenture & SAP

ilion

Labour - BCH $23.0 milion $10.0 milion Facilties $2.7 milion $1.7 milion

Rollout &

Trainig

Program/Project Management $2.6 milion

$5.5 milion

Contigency

Taxes $1.1 milion

$2.8 milion

IDC

The OMA and capital breakdown by fiscal year is as follows (in $ thousands):

Capital OMA Total

F2002 Pre C&A ₁₆₁ ₁₆₁

F2002 C&A & Blueprintig 362 566 928

F2003 30,254 065* 34,319

F2004 852 529 _21,381

Total $45,468 $17321 _$62,789

* included in the Customer Services approved F2003 business plan

The CIS project cost is $62.8 milion. We have spent $7.1 milion to date on confirming that ths

proposal is the optimum solution. Completing the project wil preserve ths investment. The

original business case cost was $60 milion; the $2._{8 milion increase is associated with Blueprint}

(20)

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Northstar

_{Project Charter}

0 Project Approach

Timeline & Phases

The project team has completed the following plannng and design phases:

II Confirm Approve (July-August 2001)

BI Business Blueprint (September-December 2001)

Given the delay associated with the RFEI - combined with potential business changes with BC

Hydro, a new version of SAP's CCS software, and potential use of the new CIS as a key asset to

provide support for other companies, commodities, and in other jurisdictions - it was mutually

agreed that the team would conduct a Blueprint Confirmation phase during the July-August 2002

timeframe.

Once Blueprint Confirmation is complete, the project wil begin the Implementation phase in

September, with physical cutover to the new system targeted for late-December 2003. The Gantt

chart below shows the timing and duration of key Implementation phase activities.

BUS'NESS BLUEPRINT,NG Blueprint Confirmation

IMPLEMENTATION

Business Configuration Application Product Testing CCS Development

Interfaces and 3rd Party Development

Enhancements

Report and Forms

Data Migration Development Data Mapping Build and Testing Integration Test Business Simulation Testing Operational Readiness Testing Performance testing

Mock Conversions Dress Rehearsals

Business Integration & Learning Organizational Alignment

Learning Development

Business Implementation Transition Learning/Knowledge Delivery Technology & Infrastructure

Testing Environments Training Environments Staging Environments Production Environments Operations Architecture Cutover Management Technology Support Program/Project Management

Post Go-Live Stabilization/O timization

(Note: The gray areas indicate where some activities may be accelerated depending on actual development

(21)

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North star

_{Project Charter}

The Implementation phase wil be followed by a Stabilization Optimization phase. This phase is

designed to resolve any operational issues (e.g., system, user, operators, etc.) and focus on high-value additions or changes to the system in order to optimize the take-up and utilization of the new system and help realize the business benefits associated with the new system.

Key Assumptions & Dependencies

Northstar wil operate under the following assumptions:

General

II BC Hydro wil continue to operate its own Customer Information and Biling system until the

new Northstar CIS is implemented.

Ii The new Northstar CIS wil be required to bil for electric consumption and other non-commodity

products for electric customers only.

II The _{new Northstar CIS wil be designed to support a variety of business structures, but}

wil

initially be implemented to support the current BC Hydro business structure.

El The CIS solution wil be based on SAP CCS version 4.64 and there are no plans to upgrade the version during the Implementation Phase.

I1 The _{new Northstar CIS wil be implemented as close to the "vanilla}_{" (i.}_{e., as delivered) SAP CCS}

v4.64 product as possible.

II Cutover_{, or go live, is assumed to occur in late December}2003.

II Business requirements wil continue to evolve during ths project. However all _{changes, once}

project scope and budget are approved in Blueprint Confirmation (August 31 2002), wil be

funded outside ths Business Case.

II Moved _{to out of scope. The Field Service Order System}(FSOS) wil be decommissioned prior to,

or at the same time, as the current CIS. Functionality supported by FSOS wil be provided

mainy

by the new "Portal" system with some functionality being provided by the new Northstar CIS.

Specific details wil be worked out and system requirements defined during the design phases of

both projects.

II The _{project budget includes provision for back-}fil of full or part-_{time resources for project staff}

only.

II The _{project wil pay for project-related training}_{(e.g., SAP ABAP}trainig) for _{BC Hydro only.}

Accenture, Westech and NCS are responsible for the costs associated with their team members. I1 For the full-time BC Hydro resources, Northtar wil pay for salary increases, 'Y' days, annual

vacation and benefits.

I1 The development Service Level Agreements (SLA) between Customer Services, operator of the

Northstar SAP solution, and any third party wil be developed and managed by business representatives outside the project jurisdiction.

II Scalabilty of the SAP CCS inrastructure ensures that the technology solution wil be able to support BC Hydro s core customer service business well into the foreseeable future. The selected infrastructure wil not restrict the support of a multi-company or multi-service configuration.

(22)

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Northstar

_{Project Charter}

The current infrastructure sizing takes into account the BC Hydro s current business requirements.

II CIS Decommissionig - the legacy CIS wil be decommissioned to the point of running it in Read

only mode. The legacy system wil be needed by the business in RO mode for up to a year after

SAP CCS goes live. When the legacy system is no longer needed, the business unit wil have to

plan for the decommissioning of the system completely as a separate project.

II FSO must be decommissioned with _{the initial implementation of SAP}_{, as the system cannot exist}

without the legacy CIS. Service order scheduling, dispatching, permit management and contract management functionality, currently performed in FSO, wil be supported by the Passport Portal

project (scheduled to go live in Q2 2003). SAP CCS wil support issuance and completion of

customer-facing service orders, which is reflective of industry best practices. This change is under negotiations between the two projects and any changes to Northstar interface requirements or functional requirements wil be approved via the change request process.

II Current project _{locations include Edmonds OC2-}_{209, OC2-213, OC2-214, OC2-}_{219. Mobilzation}

of the project to a different location is out of scope.

II Proposed changes to existig or _{new systems that are not currently in production and would}

impact the new Northtar CIS wil be agreed between both projects in advance. Costs for these

activities are out of scope and wil be handled via the Northtar Change Control process

Process

II The _{new Northstar CIS}_{Process Model assumes only}existig CIS processes wil be addressed in

the first release, i.e., the current scope of this project. Processes that could be used in the future have been identiied and marked as ' Future , and wil be addressed in future releases.

il The _{new Northstar CIS Process Model only addresses those processes that in some way require}

direct interaction with the CIS system. Processes and steps that are performed from other

systems have not been included and are assumed out of scope.

II Any changes _{to the complexity of the business processes or the addition of newly}_identiied

business processes wil be handled through the Change Control process.

II Dollar estimation wil not be used; rather a reading estimation (standard SAP) wil occur.

II Existig low volume manual processes wil remain manual processes _{in SAP.}

II A non-energy invoice _{is not required from the new Northstar CIS in the current release, as all}

non-standard specific charges wil be handled and invoiced through PeopleSoft (note ths may

change if a change request is raised in the next phase).

iI PeopleSoft wil be responsible for the biling of non-energy charges not currently handled by _CIS.

II Standard non-energy charges _{currently biled in CIS wil continue to be biled in the new}

Northstar CIS system.

(23)

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Northstar

_{Project Charter}

""""""",".,....

Technology & Infrastructure

II

NCS operators wil join the project without backfil and contiue to charge their home cost center.

II The new Northtar CIS wil re-use the mainrame printig capabilties currently provided, e.g.,

CSF, printers, etc.

Data Archiving - Northstar wil ensure backup and restore of the entire system, and wil provide procedures to purge high-volume non-essential data (e.g. data that wil not compromise any reporting or on-line query capabilty from the system (help manage disk storage usage). Full data archiving and retrieval capabilty however is outside Northtars scope.

l1 The technology team _{is not responsible for the support of the EAI}_{inrastructure. It is}_assumed

that the OCIO wil play this key role.

Ii Bil Format and Print - The present system for bil format and _{print on the mainrame}_{wil be}

used. The high-speed printers and any other hardware or software required for bil

printig

after the generation of the flat file in SAP is out of scope.

Ii The _{project wil not provide the additional hardware andj or infrastructure equipment necessary}

to implement a site failure recovery strategy. The Technology Strategy addresses the back-up

and recovery facilities.

Ii Network traffic estimates have confirmed that BC Hydros existig LAN and WAN inrastructure

is sufficient to handle the incremental data communication caused by SAP CCS. Upgrade or

changes in the network infrastructure wil be handled through the project change request process

and draw on contigency if necessary. If the inrastructure proves to be inufficient for CCS,

Northstar wil assess the upgrade requirements and escalate if necessary for approval via the Change Request process to be funded by the project contigency.

Developments, including Interfaces

Ii Changes in _{business requirements}

withn

_{in-scope developments that are}_{identiied after the}

blueprint phase are considered out-of-scope. These changes must flow through the change control process to assess impacts to the development and other teams. Any existing interface or other entity which the team missed during Blueprint and Blueprint Confirmation wil be assessed

by the project team and escalated if necessary for approval via the Change Request process to be

funded by the project contigency.

Ii Unless otherwise indicated (e._{g. EAI), all interfaces are assumed to operate in the same manner as}

today, including fie formats, platforms, and communication protocols.

Ii SeeBeyond, BC Hydros corporate Enterprise Application Integration (EAI) tool wil be used for

subset of the Northstar SAP CCS interfaces. Specific criteria wil be developed and _{jointly agreed}

with the BC Hydro Common Interface team.

II Northstar wil be able to leverage the experience, tools, and common EAI infrastructure built to

date. This includes templates, designj development standards, and hardwarej software

environment and support resources. These tools and resources wil be provided at no cost to Northstar.

(24)

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Northstar

_{Project Charter}

II Field service orders wil be created in SAP but dispatching and costig wil occur in other

systems, e. , WMS/Passport. A combination of manual and automated interfaces wil exist

between the new Northstar CIS and WMS/Passport.

II The new Northstar CIS wil contain all devices in inventory (via interface from EMRS), but EMRS

wil contiue to

be the system of record, responsible for the maintenance of the inventory, procurement, retirement, certiication, etc. of all devices.

II Atlas

wil contiue to

handle all external credit issues, e.g., interaction with collection agencies.

II BC Hydro wil _{utilize the complaint management functionality in SAP and eliminate the current}

complaint management system.

II CCS wil _{interface with the ARCs and MRMS solution that was implemented in mid}_2002.

II

SYMCOR

wil contiue to

handle the processing of payments.

II EIGEN wil _{continue to process Credit Cards and pre-authorized payments.}

II Outages wil be reported through the new Northstar CIS, but the outage management

functionality (e.g., network location, problem identiication, resource management of skils and

equipment, dispatchig, etc.) wil remain within PowerOn.

II Trouble _{calls for all areas}_{wil now be all processed}though PowerOn.

Technical Development

II All user id's, authorizations and developer keys wil be created for the technical development

team. The technology team wil inform the development team of the application of any OSS

notes, upgrades and hot packs.

II The developments are _{dependent upon the configuration and customizing of their associated}

processes and sub-processes. The development schedule wil be structured to account for configuration dependencies.

il The _{SAP CCS interface development is dependent}_{upon the completion of any required code}

changes/modifications to the connectig 3 party systems. The Northtar development team

wil work closely with the 3 party developers to define and document all required modifications

to the 3 party systems.

l1 The _{SAP CCS interface}_{development is dependent upon the creation and connectivity to the}

SeeBeyond EAI infrastructure. The development team is assuming that the EAI _{inrastructure}

and all required SAP connectors are set up prior to the implementation. The CCS Northstar

Project wil ensure that all outstanding SAP 'Hot Packs' and AOP (Add On Patches) wil be

applied to the solution (up to the integration test freeze date).

Business Integration

II Several of our _{sponsors have changed since December 2001. We expect to receive}_{full support}

from our new sponsors throughout the life of the project.

ii No signficant organization design/ consolidation is in scope for this project. The organizational

alignment activities are limited to role/ responsibilty alignment and sizing the number of positions required in specific functional areas.

(25)

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North star

Project Charter

II No changes _{to reporting relationships or management processes are included in the scope of the}

project.

II A limited _{number of jobs outside of Customer Services}wil be impacted. We have assumed that

these jobs wil be expected to use CCS, but that there wil not be a shift in responsibilty.

II Direct customer communication wil be handled by the current group/individuals. II External communication requests wil be handled by Corporate Communications.

I1 Business Policy changes wil be developed by the business and coordinated by the Business

Integration Team Learning

Ii There _{is no apparent or well-}_{defined overall learning or training strategy in Customer Services. If}

a strategy is defined during the project, the Learning team wil strive to align to the overall

strategy as much as possible without severely affectig project timelines, resourcing, and

deliverables.

II The learnig and performance support _{effort wil be complimented by the delivery of}_effective

communication, the change network, and sponsorship by the Business Integration Team and

Customer Services Management Team.

II Users have the necessary prerequisite skils and knowledge (computer orientation, non-_CIS

application skils, and BC Hydro knowledge) to perform their current jobs and wil not be trained in these areas during CCS Learning. This includes BC Hydro policies and procedures and

computer applications, such as Microsoft Office and Email.

II Northstar wil develop Learning materials to transition users from the _{existig CIS to}_{CCS, ths}

wil incorporate information on process and system changes. The

Northtar

materials wil be

inputs to the 6-week induction

trainig,

however they wil not be designed for new employees and wil not replace the current 6-week induction

traing.

I1 Any _{staff that is newly recruited to related business areas}wil receive the necessary trainig and

coaching in their new roles prior to receiving CCS training.

II Temporary and/ or retired employees wil backfil Customer Services up to the Go Live date

while employees are trained. Backfil, temporary, and retired employees may need to be trained in the current CIS system. The project has budgeted for 30 resources for 4 months at a group 6

level.

II

CSMT members (or representatives from the business) wil be responsible for the documentation of changes to impacted policies and business rules and the creation of new forms withn their

business unit. These changes wil be incorporated into the performance support tool and learning

activities if received prior to the Learning Pilot.

II Existing Call Centre training facilties in Edmonds, Vernon, Prince George, and Nanaimo wil be

used to deliver learning. Additional facilities and equipment wil be required to deliver

learnig

prior to go-live. Participants from other locations (e.g. CCS offices, meter readers, etc.) wil travel

(26)

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Northstar

_{Project Charter}

II

Maximum capacity of existig Call Centre trainng rooms are 16 users per course at Edmonds and

8 users per course at Vernon, Prince George, and Nanaimo respectively (due to infrastructure and

room capabilties).

II Learnig wil be conducted during normal working hours. Any negotiations regarding overtime

wil be the responsibilty of the business and wil be agreed upon in advance.

II The business wil fully sponsor learning activities and integrate learning requirements into

individuals' work schedules as required.

II The Learning team wil _{work with the Technology team to define User Profiles. The Technology}

team wil be responsible for the creation and maintenance of User Profies.

II Learnig _{delivery wil require a large number of resources to deliver}

traing in

_multiple

locations and multiple business units. Suitable business resources wil be seconded to deliver

classroom traing. This wil help to create skiled users

with

the business.

Ii Following go-live the responsibilty for all Learning and performance support activities wil be

formally handed over to the responsible business units; ths includes the delivery of all Refresher

training.

II Appendix J _{covers the number of users by course hours.}

User Support

The Customer Services online support tool wil contain inormation on business processes and

using CCS. This wil include InfoPak cue cards, iTutor simulations, Job Aids and a Glossary.

11 Northstar wil work with the business to determine how materials in GENIUS and the

performance support tool wil be used and maintained. This wil determine if relevant

inormation wil be linked or if users wil access different inormation from different systems.

The overall Knowledge Management strategy for Customer Services wil be taken into

consideration as part of this discourse.

11 Based on vendor estimates the set-up of performance support tool wil require approximately

15-25 days time of vendor support. This time includes set-up, limited customization (settg up

context sensitivity) and onsite training.

II The Learning Team wil require trainig on the performance support development tools to

successfully develop traing and performance materials. Skils wil be learnt though onsite and

on-the-job trainig from vendor representatives rather than formalized vendor

trainig.

II The Learning Environment wil be accessible and used simultaneously by multiple classroom

sessions during

trainig

rollout. Users who have commenced classroom traing wil be able to

access the Learning Environment from their normal workspace.

I! The Learning Environment wil continue to reflect the Production Environment after go-_live.

Configuration changes wil be transported to the Learnig Environment in accordance with defined processes to ensure that

Learnig

materials also reflect the changes.

II CCS provides _{users with multiple ways to complete a transaction}_{, access information or start a}

Front Office call. InfoPak cue cards wil document one method to access and complete a

(27)

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Northstar

_{Project Charter}

Methodology

The major deliver abIes or outcomes from the Northstar CIS Replacement project are:

II A new system, based on SAP's v4.64 CCS software and configured to meet BC Hydro s business

and operatig requirements, that wil replace the

existig

BC Hydro CIS

!I

Interfaces, point-to-point or EAI enabled (via SeeBeyond / SAP eGate connectors) that accept or

deliver data to meet both internal BC Hydro and external thrd party requirements

II Forms (including invoices), letters, and reports associated with the defined business processes

and requirements

II Converted data to support the defined business requirements

II Technical infrastructure to meet defined hardware and software operatig requirements that

support the business requirements for performance, availabilty, and ongoing operations

I1 Trained users and suffcient level of learning materials, user documentation and job aids. II Trained operators and operations procedure manuals

To produce these deliver abIes and meet schedule and cost targets, the project team wil utilize the Method R/3 components of the Accenture Business Integration Methodology (BIM). Method R/3

and BIM have been used successfully to deliver thousands of Accenture projects worldwide,

including SAP / CCS projects around the world and other BC Hydro / Accenture projects, including

BTP (for PowerSupply) and GOUP (Grid Operations Upgrade Project). Method R/3 has been

certified by SAP for all SAP implementations and includes all key components of SAP's ASAP

methodology.

While BIM covers all aspects of both package implementation and custom development, a critical

distiction from other methodologies is BIMs holistic focus on business processes and outcomes.

Specifically, this means that the new system is designed with the end in mind and targets integrated business processes, as ths is how the system is actually utilized. These integrated business processes include all components necessary for successful business operation, including business logic

(configuration and enhancements in SAP), inputs and outputs (interfaces, forms, letters, and reports), data (retrieval, update, and creation), and learnig (user interaction, roles, knowledge requirements

and knowledge support).

The project team wil supplement the BIM deliverables with those specified by BC Hydro CIO

minimum Deliverables List (see appendix H).

4.4 Project Management Processes Progress Reporting

The project wil report status at various levels. Each workstream wil report status against their work

authorization on a weekly basis. These individual status reports are summarized into a project-level

status report. This Project Status Report is reviewed at the Workstream Meetig every Tuesday. This status report is the key input to creatig the Northstar Dashboard. The Dashboard is our primary

communication vehicle for reflectig progress to our Operating Sponsors and key stakeholders. The

Dashboard summarizes workstream status, milestones and dependencies, earned value and work effort, risk profie and the financials.

(28)

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Northstar

_{Project Charter}

Issue Management

Issues wil arise throughout Northstar and must be resolved in order for the project to advance. The

issue management process provides a tool and a structured approach for capturing, managing and resolving issues in a timely manner.

The Create and Resolve Project Issue process has two main components:

II The _{definition of a project issue and when it is appropriate to raise and track an issue}

1. The Issue _{Resolution Process and the PVCS Tracker issue tracking application}

What is an Issue?

Team members wil create an issue in PVCS Tracker when the following situations arise:

II In-scope functionality or business principles cannot be adequately implemented or executed

given the existig set of business requirements. When this occurs, the issue management process

wil be used to ensure that the right person(s) analyze the issue and develop a solution that fits

withi the

overall scope of the project.

Ii The existig _{project inrastructure is impeding project}_{team productivity. For example}_{, if a}

project management process, such as status reporting, is confusing and time-consuming, an issue would be raised in order to have the PMT review the process and formulate an appropriate solution.

II It

is expected that every team member wil run into issues thoughout all phases of Project

Northstar. It is not anticipated that all issues wil be entered into the tool. If a team member has a

question or request for clarification that can be handled quickly _{withn a}_{team, then it may not be} necessary to go though the entire process. However, issues that require a high-degree of

visibilty, or require the intervention of multiple teams, or escalation to the PMT, should be immediately entered into the tool for tracking and eventual resolution.

Process Responsibilties

While all individual team members can create an issue, the process of resolving the issue resides with different individuals, depending on their respective roles.

An Originating Team Member (any project team member) identiies and intiates the issue

management process by creating an issue in PVCS Tracker.

Originatig

Team Members are

ultimately responsible for ensuring that their respective issues are resolved as per the identified

resolution noted in PVCS Tracker. Additionally, these individuals are responsible for escalating issues to the PMT and for initiating other corrective processes (like the Change Control and OSS

Processes), when necessary.

Workstream Managers are responsible for ensuring that the appropriate team is assigned to a given issue, and that the issue is assigned to the right project team member for research and resolution. Additionally, the Workstream Manager should contribute to the resolution of the issue by providing initial recommendation and guidance to the team member(s) whose job it is to resolve the issue.

(29)

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Northstar

_{Project Charter}

The PMT is responsible for resolving issues that require their specific intervention during the

escalation process. Issues escalated to the PMT usually have cross-project impacts or impacts which could hamper the progress of the entire engagement.

The Northstar issue management process flow is shown below:

Northstar Process 001 - Create and Resolve Project Issue

Version: 3.0 Created 9/11/2001 Assign Yes Responsibility to a Team Member Review Pending Resolution y,, -( Clo" ,"'O ) Review with PMT Initiate 055 Process Reassign Issue to Appropriate Team

Review New Issue

Initiate Change Control Process

Create Issue and Assign to Workstream Manager Resolve Issue, Document Resolution, Set Status to 'Pending

for Final Review

Detailed procedures for the above process can be found on the Northstar LAN. Risk Management

Successful management of projects always requires informed, proactive management of issues,

problems, and risks. Risk is defined as the cumulative effect of the changes of an uncertain occurrence that wil adversely affect program or project objectives. It is the degree of exposure to negative events and probable consequences.

Contingency, risk, and issue management are closely related but distict. Risks describe what might

happen; issues describe what has already occurred. Contingency represents management reserves set aside or float built into the program and project planning to account for unforeseen factors.

(30)

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Northstar

_{Project Charter}

- -".',.""=', ---""

To enhance the probabilty of success for a risk management process:

l1 Do not treat risk management as an administrative task;

II Do obtain _{commitment from everyone who is involved in managing the program and its}_projects;

l1 Do be clear about how risk management procedures wil be implemented and maintained;

II Do not try to identiy everything that can go wrong; focus on the risks that can have a significant

impact on the project

II Do focus on risk-reduction responses that can be implemented;

II Do recognize the ongoing proactive nature of any successful risk management program, and

require the program team to revisit and report on risk issues regularly Northstar manages risk on a weekly basis and considers the following aspects:

II Staffing

II Business _Ownership

11 Business Decisions

II SAP Product Stabilty

II Techncal Infrastructure

!! Project Infrastructure

II Scope and Issue Management

II Solution Integrity

II Executive Sponsorship

Each week these risk areas are assessed on a scale of 1-15 (Low=l; Very High =15). This assessment is

done by the Project Management Team and is reflected in the weekly Dashboard. 4.4.4 Change Control

During the project, there may be intances when out-of-scope functionality or enhancements may be brought back in scope if the perceived benefits of the scope change substantially outweigh the costs. Accordingly, a process has been established to ensure that any recommended scope change be properly estimated, and that the proposed change is validated

with

the solution architecture. The Create and Resolve Change Control Request process has two main components:

II The definition of a change request and when it is appropriate to raise and track such a request.

II The Create and Resolve Change Control process and the PVCS Tracker application

What is a Change Control Request?

Team members should initiate a change control request when compellng arguments exist for reconsidering out-of-scope application functionality and/ or business processes. The request wil ultimately include an estimate of the work required to implement the change in scope, along with a detailed breakdown of the costs and corresponding benefits.

(31)

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Northstar

_{Project Charter}

Because change requests have a high degree of visibilty inide and outside of the project, it is

expected that each Workstream Manager wil carefully coordinate each change request with the

member of the team initiating the request.

Change requests are the logical evolution of issues in PVCS Tracker. That is, all change requests start

as issues that are deemed to impact the scope of the project significantly.

Process Responsibilties

The process of resolving change requests resides with different individuals, depending on their respective roles.

An Originating Team Member, in consultation with their Workstream Manager, identifies and

initiates the change request process by documenting the request in PVCS Tracker.

Originatig

Team

Members are responsible for ensuring that their requests are adequately documented prior to

submission of the request

The Solution Architect is responsible for reviewing the change request and for making the decision to allocate project resources to estimate the costs, effort, and benefits associated with the change request.

The Workstream Manager is responsible for analyzing the change request requirements and for estimating the costs, effort, and benefits associated with the change request. The Workstream Manager wil update the Change Request to include a detailed resource/budget allocation and the

justification for his/her estimation.

The Operating Sponsors are responsible for reviewing the estimates associated with the change request, and for making the final decision to implement, defer, or reject the request.

The Integration Manager is responsible for

integratig

approved change requests into the project's

budget, work estimates, and statistics. Additionally, the Integration Manager insures that the

(32)

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Northstar

_{Project Charter}

The Project Northstar change control process is shown below:

Northstar Process 002 - Create and Resolve Change Control Request

Version: 1.0 Created: Sn/2001 c: '" c: '" OJ c: :: Review Change Request Update Project Budget and Statistics c: '" '" I-'" c: Analyze Change Request Requirements Present Change No Request to Design Control Team OJ E '" '" I- :: Create Change Request Figure

4-Detailed procedures for the above process can be found on the Northtar LAN. 4.4. RACA and DCW

Risk and Control Analysis (or RACA) is the controls methodology that Northtar wil follow in order to ensure that all necessary financial and system controls are provided for in the new CCS solution.

RACA involves taking a holistic view of the entire solution and identiying all of the different

categories of risks that can be associated with different system functions. Each risk is then mapped to the appropriate control mechanism that wil be provided to mitigate the