• United States

Illuminating portal possibilities

Nov 17, 20036 mins
Enterprise ApplicationsOracle

Utility companies are creating Web portals to optimize interactions with employees and share knowledge.

Recent years have been unkind to the worldwide utility sector. Industries such as oil, gas, water, nuclear power, electricity and petrochemical have seen their share of woes – from the doleful economy to deregulation to increased governmental scrutiny because of the Enron collapse.

As IT budgets begin to thaw from their multiyear freeze, utilities are increasingly investing in portals. These Web sites aggregate data and provide a customized gateway to a multitude of applications , promising to reduce operational costs and improve efficiencies.

In a recent AMR Research study, gas and power utilities rated employee and customer portals second only to application integration as their top priorities for next-generation technology investments.

A lack of data accessibility kept most utility companies from deploying portals until fairly recently, says Jill Feblowitz, service director of the energy practice at AMR. Companies such as Plumtree SoftwareSAP and Vignette  now offer technology with built-in connectors to enterprise applications, significantly easing the task of building and deploying portals. Deployment costs range from about $50,000 to $1 million, depending on the scope.

Many utilities start by deploying a portal to replace employee paperwork. That is often just the beginning of the journey as they expand their portal to more strategic opportunities, such as sharing knowledge to improve performance throughout the organization.

Like many of its peers, gas and electric utility Cinergy has endured multiple rounds of downsizing in the past few years. Reducing costs and increasing efficiency became imperatives in the Cincinnati company’s ongoing struggle to get the best rates for its 1.5 million electric customers. In October 2001 – only six weeks after selecting Plumtree as its portal platform – Cinergy rolled out the iPower portal for its 7,800 employees for $1.5 million, including $900,000 for software and hardware, and $600,000 for implementation services.

The portal’s chief function is online employee benefits enrollment, which had previously been outsourced to Hewitt Associates. Over time, Cinergy’s portal investment will save money by bringing HR in-house, says Ginny Segbers, supervisor of the new media group for Cinergy. In the meantime, other cost savings include aggregating content on iPower that they would otherwise have to purchase separately. The IT department also built the front end to Cinergy’s data warehouse on Plumtree.

The cross-functional portal team analyzed network performance before implementation. “The connections to the power plants were slow. We were concerned about bandwidth,” Segbers says. Cinergy upgraded to T-1 links between headquarters and the plants shortly after implementation, so application performance has been fine.

Scalability was another factor. Segbers needed to ensure that the portal would scale as its usage and content increased. Cinergy runs Windows NT with Microsoft  SQL Server 2000 as its database. Its portal infrastructure consists of a single-server development environment, a three-server test environment and a six-server production environment. “We wanted something that would grow with us,” she says. Cinergy has found that to be the case, as the traffic on its portal has grown from several thousand hits per month to more than 300,000 hits per month.

Cinergy has begun to consolidate hundreds of discrete intranet sites on the portal. “Our vision is to make iPower the single place for our employees to go to find information they need to do their jobs,” Segbers says.

Forum for sharing

U.S. utility companies aren’t the only ones feeling the pinch. 3 Valleys Water in the U.K. is bracing for deregulation, in which consumers can choose their water providers for the first time. “We are much more aware of the need for good customer service. We also need to make the best use of our assets,” says Gary Thomas, 3 Valleys’ development manager in Hatfield, Hertfordshire.

An Oracle shop, 3 Valleys built a portal based on Oracle Portal in 2000 for roughly $50,000. But Thomas soon realized that while that system met their application-delivery requirements, they needed more sophisticated content and knowledge management ability. In 2001, 3 Valleys chose SiteScape  Enterprise Forum to provide the knowledge-sharing piece of the portal, in part because SiteScape was an Oracle partner.

“We sold Oracle Portal to management as an all-encompassing solution, and then 18 months down the road we had to ask for something else,” Thomas says with some chagrin. The initial cost to build the SiteScape portal was just more than $100,000 (including $10,000 for hardware, $60,000 for licenses, $25,000 for customization and $6,000 for training.) Annual internal and external maintenance costs run about $10,000.

The additional investment was justified, Thomas says, because SiteScape lets employees share knowledge and information directly related to their jobs. Different departments create their own knowledgebases and can maintain them without technical expertise.

Moving portals from a place for electronic paper pushing to a forum for improving operations is the coming trend, analysts agree. “Portals are not just about data accessibility but analytics that will let them perform their jobs better. These are analytics the company uses to understand where they are in relation to their corporate goals,” AMR’s Feblowitz says.

Overall IT spending: The utilities industry will spend $89 billion on IT this year, a modest increase from last year’s $83 billion. IT spending in the sector is poised to take off, however. Gartner estimates it will rise to $110 billion by 2006.
IT spending based on revenue: In 2002, energy industry companies spent 2.2% of their annual revenue on IT, according to AMR Research.
Savings: Adopters of ACORD XML report average integration cost savings of 20% to 30%, which means that mass adoption of standards could save the U.S. insurance industry $250 million in tech-nology costs annually.
Project prioritization: An AMR Research report shows that portals are the energy industry’s second-highest IT spending priority, just behind application integration.

Cinergy created a company dashboard that appears on the portal’s front page, showing not only the company’s stock quote but also key metrics such as the daily gas input, the price it pays for gas and electricity, how many customers have switched to other providers and current outside temperature, which affects demand for electricity. “These things are a barometer for how our company is performing,” Segbers says. Soon, Cinergy will add the ability to drill down into these numbers and see how they affect revenue in real time.

Canadian nuclear power utility Bruce Power in Tiverton, Ontario, shifted the burden from the HR personnel to its employee self-service portal, which is based on a Kana system. “We took the top 100 questions our team is being asked all the time and created a knowledgebase,” says Tony Sheard, HR manager. The knowledgebase serves up links once the user inputs a subject.

Bruce will expand the knowledge applications into functions such as IT and operations, freeing employees to concentrate on more strategic business than answering routine questions.

Another benefit of portals is to help shield the maturing industry against brain drain as workers retire. “There is a lot of technical and engineering expertise that will be walking out the door soon if people don’t capture it,” Feblowitz says. “It’s not just about letting people see how much vacation time they have – it’s the ability to share knowledge with other employees that will drive real value.”