安达信中国电力行业分析

Energy&UtilitiesNovember,2001BusinessConsultingProvidingManagementConsultingServicestothePowerIndustryinChina©2001Andersen.Allrightsreserved.1AgendaSectionI.TheSituationinChinaandtheChalllengesforPowerCompaniesII.TheOpportunitiesforImprovementII.ImplementingBPRandERP©2001Andersen.Allrightsreserved.2I.TheSituationinChinaandtheChalllengesforPowerCompanies©2001Andersen.Allrightsreserved.3ThemajorstakeholdersevidentinotherpowermarketsareyettofullydevelopinChinaUtilityGovernmentCustomersEmployeesEnvironmentShareholders•Captivecustomerscannotchoosetheirsupplierofpower•Lowexpectationsofservice•Lowconsumptionpercapita•Employeesarecaptivewithlittlechoicetomovebetweenemployers•StaffTurnover1%inmostcompanies•ThePRCgovernmentisyettoenforcemajorenvironmentalregulationsasareevidentinmostotherderegulatedmarkets•Fewpowercompaniesarefullyprivatised•Noprovincialutilitiesprivatised•Plansforreformhavebeenspokenof,butnoconcretedecisionyetmadeRegulators•Effective“selfregulation”throughSPCC•Noindependentregulatorybody©2001Andersen.Allrightsreserved.4Fromourworkwithanumberofprovincialutilities,weobserveanumberofareaswhereopportunitiesexisttosignificantlyimproveoperatingperformance•Inabilitytoaccuratelyaccountfordifferentfunctionalsegments(Generation,Transmission,DistributionandRetail)•Lackofqualityfinancialinformationgenerallyandinadequatemanagementreporting•ManagementtotechnicalKPIsandsomefinancialones,butabroadgroupofperformancemeasuresnotused•Excessiveduplicationofeffortbetweenbusinessunits(eg.accounting,purchasingconductedatmultiplelocations)•Duplicationofdataentrythroughlackofintegrationoftechnology•Excessivemanualprocessingofmajortransactionaltasks,andsomeareascompletelylackinganyformoftechnology(ie.paper-basedrecords)•Non-standardprocesses(drivenbydifferingusesoftechnologywithinthesameorganisation)•Remunerationbasedonstandardnationalsalaryscalesimpactingabilitytorewardemployeesbasedonperformance©2001Andersen.Allrightsreserved.5III.TheOpportunitiesforImprovement©2001Andersen.Allrightsreserved.6Whatisa“WorldClass”or“BestPractice”utility?•Thetransitiontobecominga“BestPractice”powercompanyisan“evolution”driven,inmostcases,bythederegulationofthemarketandtheintroductionofcompetition•Theevolutionstartswithoperationalexcellence,anddevelopsintoinnovationandacustomerfocus,toafocusoncreatingvaluefrommultiplebusinessactivitiesOperationalExcellenceFocusonShareholderValueInnovationandCustomerFocusObligationtoServeMonopolyCompetitiveSTATEOFDEREGULATIONMANAGEMENTFOCUS©2001Andersen.Allrightsreserved.7From...To...FunctionalManagementManagebusinessfunctionsasdefinedbyregulatoryaccountingcategoriestocomplywithauthorisedexpensebudgets.ProcessManagementDevelopandmanagebusinessprocesseslinkeddirectlytotheutility’soutputstofocusresourceallocationpriorities,improvequality,andcontrolcost.BudgetControlNegotiatecostswithgovernmentandthenconrolexpenditurestoachieveauthorisedearnings.StrategicResourceAllocationApllycapitalandoperational,andnon-financialresourcestoachievecompetitiveadvantageconsistentwithstrategicobjectives.Thereareanumberofshiftsingeneralmanagementpracticesrequiredtomeet“BestPractice”BookingfinancialperformanceorcontributiontogovernmentAchieveearningstargetsasrequiredbygovernmentrevenuecontributionneeds.CreatingShareholderValueIncreasecashflow,reducerisk,andretainorpayoutcashbasedonavailableinvestmentopportunities.©2001Andersen.Allrightsreserved.8Thereareanumberofshiftsingeneralmanagementpracticesrequiredtomeet“BestPractice”RegulatoryAccountingCollectandreportinformationprimarilytocomplywithregulatorycontrolsandgovernmentaccountingstandards.ManagementReportingCollectanalyseandreportinformationnecessarytosupportmanagementdecisionmakingandperformancetracking.MonopolyDevelopmentDevelopgeographicterritorybypromotingloadgrowth.BusinessDevelopmentDevelopprofitablenewmarketsorservicesthatleverageofexistingbusinessassetsandcorecompetencies.EmployeeadministrationEncouragecomparabilityofcompensationamongemployees,maximisecompanyexperiencethroughseniority,andavoidlabourrelations-basedserviceinterruptions.HumanresourcesdevelopmentDevelopandmaintainafocused,agileandeffectiveworkforceoperatinginaculturethatsupportscontinuedcompetitiveness.From...To...©2001Andersen.Allrightsreserved.9Belowwehaveprovidedahigh-levelsummaryofBestPracticesthatAndersenseesemployedinleadingutilitiesBestpracticeutilitiesare:•FocussingonAssetManagementpracticesthatoptimizecapitalandoperationalexpenditurebybetterunderstandingcustomerrequirementsandapplyingmorerigorousplanningmethodologies•FocusingFinanceactivitiesonaddingvaluetothebusiness,andputtingnon-coreservicesintoaSharedServicesmodeltoimproveservicedeliveryandcost,andtostandardizeprocesses•OptimizingtheirSupplyChainthroughbettersuppliermanagement,focussedprocurementstrategies,andusingweb-enablingtechnologiestostreamlinethepurchasingandlogisticsprocess•DevelopingHumanResourceManagementactivitiesawayfromtransactionprocessingandtowardsstrategyandchangemanagement•MeasuringandmonitoringperformancethroughPerformanceManagement