ADDC provides services distributing water and electricity to the consumers in the district of Abu Dhabi and the Western region. As part of privatization and streamlining of processes, ADDC embarked on implementing various systems. Maximo’s asset management was part of this organizational upgrade, CNME’s Nancy Sudheer met up with Abdulhamid Nassouri, Director, Asset Management, ADDC to learn more details.
Abu Dhabi Distribution Company (ADDC) was established in accordance with the Water and Electricity Sector in the Emirate of Abu Dhabi. On the 1st of January, 1999, ADDC commenced its operation, which involves providing services distributing water and electricity to the consumers in the district of Abu Dhabi and the Western Region.
In 1999, when ADDC was formed, there was also a lot of privatization that was brought in to enable efficiency in the system, “At that time there was an introduction of new technology to streamline the processes, bring in more efficiency. The tariffs were also set appropriately. We had to make sure customers are charged in line with worldwide standards. As an organization, we always wanted to improve processes, efficiency and reduce costs. At that point we embarked on acquiring various ERP and core systems like Oracle financials, Oracle HRMS, Maximo for Asset Management in addition to geographical information systems (GIS),” states Abdulhamid Nassouri, Director Asset Management from ADDC.
All these projects started simultaneously and there was a lot of activity to acquire these systems, particularly asset management. Nassouri was involved from day one in the selection and implementation of Maximo.
Though ADDC is an organization of a large stature, the fact that it did not have significant legacy systems in place proved to be an advantage. 2005 marked the year of tremendous change and transformation for ADDC. The organization in conjunction with its parent company ADWEA, embarked on a major 5-year improvement program.
Managing their assets
All the subsidiaries at ADDC underwent changes, but it was a task to change the mindset of the employees. Nassouri explains, “We faced difficulty in changing the culture at the organization and we began to conduct road shows. This was mainly for employees to realize the abilities that such a system can offer them and the company. There was also a lot of training sessions that were held including refresher courses and almost four thousand employees were part of this big change.”
An experienced team was formed the Maximo solution implementation involved various group companies in addition to the transmission and distribution companies.
While the lack of legacy aided quick implementation, it also meant that as an organization it lacked in structured data collection. Assets were also scattered all over the place, making information gathering a difficult task. Different group companies also maintained different inventories and all of them had to be checked physically. Nassouri claims that in spite of these disadvantages they managed to finish the project with Maximo in 15 months touching all the aspects of the organization right from procurement, contracting, operating, maintenance and inventory management.
ADDC also had an upgrade to Maximo 7 which took 10 months, and in total the solution took 2 years.
Nassouri adds, “The three main criteria to choose Maximo was the reputation, track record in the region and the local support available.”
Streamlining assets
With the new system and privatization, ADDC was able to reduce and rationalize its user base from 3800 to 2500 which basically comprised of the transmission and the distribution part of the organization. The company was also able to realize ROI from the way it could now manage its assets. The new system makes it possible to capture all the assets, maintenance activities, relocation and replacement.
“Effective management of procurement and contracting directly affect expenditure. In our case, we had tremendous success in inventory management as we reduced inventory costs and value from AED 2.8 b to 1 b. Now we are able to understand what is there in the store and users are able to identify the parts available. Earlier users would continue to buy materials which would accumulate and gather dust in the store. In this way, we defer investment and also reduce the carrying cost of inventory,” says Nassouri.
ADDC also conducted an independent ROI study along with a South African company which revealed that returns would come in the first 2 years itself of the implementation. Most of the return was in the reduction of the inventory and improvement in the transmission companies maintenance activities, which was reduced as a result of maintenance management.
In asset management basic service performance and security are also major concerns but ADDC made sure that security was a prime consideration for the implementation. All enterprise applications are hosted at one central datacenter of ADDC.
Following detailed reviews of the company’s current performance by international consultants, the company also commenced a process of internal restructuring to separate activities into asset owner/manager and service provider. This is a well known international model for the utility sector and is designed to focus greater attention on asset management and investment planning whilst driving down operating costs and driving up levels of service at the same time. As a part of a separate initiative, across the ADWEA group, ADDC’s IT services were outsourced to Injazat Data Systems.
Next generation Asset Management
Going by an emerging trend, Asset Management and Financial Planning are becoming better supported with change management, analytics and visibility into application usage. Many organizations state that they are separated by domains (network, systems, telecommunications, etc.) for asset management.
“A concept like asset management touches all applications including customer care and billing information available. It is also critical to manage our assets as the financial system tells us the depreciated value of our assets. With systems like Maximo we utilize all systems including GIS, customer care, billing and financial systems as there is a lot of information. Therefore management of assets means managing it from a technical and commercial point of view,” says Nassouri.
Many organizations manage applications and systems together while network and telecommunications are separate. Assets connected with core business must be managed separately. The rules and regulations for all these assets must be different from other IT infrastructure or telecom.
End-users also opt for central asset management and financial planning that cuts across all of IT. Asset Management controls capital expenditure (capex) and also decides where the capex will be spent. RoI from an asset is important especially for a regulated company and because it affects the operational expenditure.
ADDC has also set an example for counterparts, but Nassouri says that all industries based in Abu Dhabi are making conscious efforts in changing their basic IT systems from what they used to be 10 years ago. “Enterprise Asset Management is being adopted across many organizations today and over the past eight years we have been putting substantial investment into upgrading our systems and stay updated.” Having done the hardwork, ADDC can now expect to enjoy the fruits of its efforts by running a more efficient business.
