Implementation of ERP in the energy companies

Feature of the power industry is the big share of fixed assets in a company asset. Therefore one of the largest articles in costs — equipment repair expenses. The regional generation companies (power plants) adhere to the functional strategy of informatization, i.e., first of all implement separate elements of information systems that "rake" the most acute collected accounting issues. First of all the module of accounting of the available equipment, purchases new, an operating time and calculation of terms between repairs is implemented. Most the companies of power cannot afford complex implementation of ERP systems yet.

Sequence of implementation approximately following. At first audit and the inventory of the equipment is carried out, it becomes clear on what equipment there are no necessary documents, first of all documents on carrying out repair. The accounting system and classifications of the equipment is in parallel developed. The stage is completed by creation of the uniform systematized directory which contains information on an operating time from the moment of commissioning before the first repair, information on the subsequent repairs. The user has an opportunity to set a between-repairs cycle and an operating time in a request. The list of the equipment with these parameters is as a result issued.

Creation of the systematized directory allows company management to control levels of wear and quality of operation of the equipment, to timely reserve money under the repairs which are coming in the nearest future, to predict possible failure of these or those fixed assets. Therefore, implementation even of one module of an information system allows to reduce significantly risk of failure of the equipment and suspension of activity. Considering that when account was not kept up to standard, at the generation companies enough the worn-out equipment collected, and the risk of failures in work increased every year. In the domestic press it was constantly told about the technogenic catastrophes threatening to the country. Really reliable information confirmed with digits not only authors of similar forecasts, but often and heads of the companies had no then. Today gradually the situation began to be corrected, at least top management of some companies already has reliable data. In addition to reduction of risk of failures, creation of the directory gives the chance to plan repair work and to manage fully fixed assets.

At the second stage accounting of agreements is implemented. Classification of agreements is carried out, all permanent agreements come to light. The conclusion of new agreements immediately is registered in the database of an information system on the personal account of the partner. Therefore, any employee of the company who needs it can request information on performance of the signed agreements. Along with accounting of agreements accounting of inventory items and supply with materials is computerized. There is an opportunity to build hierarchy of requests for material issue for repair. At large scale power stations the number of current agreements reaches several thousand.

Information on requests collected in the database and their priority comes down in a vista shot of purchases. At this stage it is possible to make the choice of the supplier of materials and to sign new delivery agreements on the conditions, most profitable to the companies. Besides, it allows to reduce paper document flow that releases time of all employees involved in it.

At this stage of implementation economic effect has long-term character. Clearing of a situation with the equipment leads to formation of a real picture on fixed assets. The management can see, for example, that a certain percent of the equipment is in extremely worn-out critical condition. Having estimated possible losses in case of the sudden output of this equipment out of operation, we can tell that exactly for this amount economic effect — effect of prevention of accident is gained. As for accounting of agreements, here economic effect quite classical — we see at once what agreements at us superfluous, not relevant. Their operational termination leads to economy of means. Plus to everything, volumes of debit and creditor debts can be strongly overestimated owing to bad accounting of partners. For example, when changing the name of the partner, he can appear in accounting as other legal entity. As a result, in the absence of necessary documents, it turns out that supply of materials is made by one supplier, and payment is made to another. As a result there is an unjustified increase in debit and creditor debts.

Implementation of ERP systems in power industry is followed by informatization of the following main business processes:

• production and trade in wholesale market of the electric power;
• production planning of the electric power and loading by fuel;
• design, construction and repair of the capital equipment;
• reliability control.

At the same time informatizations are exposed management processes of accounting and operational accounting, personnel management, investment, production and business planning, budgeting. Speed of informatization of management processes depends on policy of the management of customer company, volume at it financial resources and quality of the ERP system. The last is very important when choosing software provider as implementation of not adapted to needs of power industry, "crude" product is fraught with increase in risk of failures of work and decrease in security.

Except described there is also a problem of accounting of payment for the delivered electric power, a problem of introduction to an information system of these meter readings of consumers.

Anyway, the generation companies gradually should close all business processes in the unified information system. The strategy of first-priority implementation of the modules bearing a certain function, possibly correct, but if process of informatization is for one reason or another frozen the company begins to work with the speed of the least computerized divisions. Implementation of separate modules is capable to solve partly a knowledge problem, sometimes even a problem of low speed of the solution of some questions. But if all business processes and the document flow corresponding to them are not closed in a uniform information circuit, a system at certain stages begins to glitch because of delays in receipt of information from not computerized divisions. As a result the personnel begin to refuse more and more use of a new system and at any opportunity to aim to use the old, but well fulfilled means. It can create threat to the project in general.

• Article was prepared by Alexander Semyonov (Managing office of Club 4CIO) according to Cisco.