Project “ESM in RWE CZ”

Miloš Dušek, Antonín Pavelka April 2014

4/30/2014 PAGE 1 Project definition (1/5): Introduction In RWE CZ group, there is ongoing SAP roll-out project, substituting original R/3 solution “SAP Classic” with corporate “ESM”

KP1 ESM ESM project in RWE CZ: RWE RWE RWN AG RWE Service / IT Vertriebs-AG • 7 RWE CZ companies impacted RWE Power ELE RWE S & T RWE Aqua • 2 800 system users RWE Technology • 130 project team members KP1 • 3 years project, stepwise KP1 implementation RWE Innogy KP1 RWE IT UK RWE Innogy • 5M EUR budget RWE RWE IT PL RWE S & T ESM Hamburg Energy NL ESM RWE Technology KP1 UK RWE Poland Arnheim Warsaw Service / IT SK Chemnitz Frankfurt Prag ESM Augsburg Kosice ESM KP1 Kevag VSE SK Süwag Budapest RWE Innogy KP1 (USA) LEW Service / IT HU

KP1 RWE Innogy/ ESM KP1 AERSA Elmü / ÉLMÁSZ RWE Turkey FÖGAZ Turkas

Barcelona

KP1 RWE Innogy Italia KP1 RWE Innogy ESM RWE IT CZ Transgas

KP1/ESM Platform PAGE 2 RWE Company implemented and running Innogy Implementation of Company planned or in progress Project definition (2/5): Architecture Original SAP Classic is central system of RWE CZ ICT architecture, fully integrated with multiple surrounding systems

PAGE 3 Project definition (3/5): Gap analysis Gap analysis of ESM & SAP Classic discovered, that ESM covers 7 process areas and original SAP Classic covers 12 areas

SAP Classic CZ Web Application Services: SAP Classic CZ · Assets · Doprava HR data EVIS · MS Exchange

EESSMM · SCADA Doprava · CPPS FFI I(90%) · PIMS · SIMONE r

e · DPD

AAMM (70%) Internal invoicing y · Handhelds a l

e

c SAP HR

CCOO (80%) CO-PA a f r

e · Helpdesk t Intranet PPSS (80%) n IS-U · Workflows: I PPMM (70%) · Purchase requisitions GIS EasyArchive · MM invoices · Contracts MMMM (60%) BW, MIS Smallworld

SSDD (80%) DMS GT Facility

PAGE 4 Project definition (4/5): Approach Current CZ processes have been assessed if & how they are supported by ESM

Identified gaps have been analyzed in order to find most suitable solution: As-Is R/3 To-Be ESM 1) Global customizing - 1 functionalities functionalities functionalities, usable as well for other RWE international companies 1 2)2 Local customizing – CZ specific functionalities - performed due to legal requirements, business 2 priorities outweighing development costs etc. 3 3)3 Business process changes – performed due to ESM development costs reasons 4)4 Implementation in non-SAP Classic system Non-SAP Classic 4 functionalities

Source: Project „ESM in RWE CZ“ PAGE 5 Project definition (5/5): Organization In project realization, 4 parties are participating

Steering committee RWE CZ • Customer • Approves key deliverables, milestones RWE Deutschland • System owner, process designer • Solves project issues (escalations) RWE IT CZ • Defines project financing • Vendor II (Integrator) RWE IT DE • Vendor I (Prime) Project management • Manages effectively project resources • Manages the scope of work and change requests RWE CZ • Develops project plan, manage project activities RWE Deutschland • Reports progress, escalate issues to SC • Manages the production of all project outcomes RWE IT CZ • Manages risks, control and introduce mitigations RWE IT DE RWE IT SK • Plans and manages the business participation

IT Leads • Responsible for delivery, having full ESM knowledge: definition of blueprint, technical realization, correction ofRWE IT DE global (IT) testing errors, support of production RWE IT SK IT Leads • Cooperates with RWE IT DE in modules setting Local (IT RWE IT CZ • Knowledge of CZ systems, processes and related interfaces to surrounding systems CZ) • Define business requirements Business • Define change requests to ESM / CZ processes RWE CZ Leads (CZ) • Performs testing • Performs end- user training

• Owns the TO-BE business process and makes a design decisions about TO-BE business processes Process RWE Deutschland • Reviews and signs off all project documentation relevant to their business process owners • Assesses all ESM related change requests AFM • Resolves any cross-business process conflicts

PAGE 6 Project experience & Lessons learnt Following lessons were learnt during project realization

Id Experience & Lesson learnt Reasons for project initiation (i.e. positive business case from system operation) tend to dissolve during project realization: - Project budget tends to rise (unexpected complexity of old CZ custom-developed functionalities, which are to 1 be replicated into ESM) - Operational costs of as-is solution decreased (visibility of old R/3 switch-off) - Operational costs of to-be solution increase (costs of to-be custom-developed functionalities) International environment with multiple parties involved increases the project complexity: - System suppliers (RWE IT, RWE DE) have no knowledge of local environment. Reaching of mutual understanding of is complicated and expensive. 2 - Meetings with many people participating (CZ, DE, IT CZ, IT DE) are impacting their effectiveness - There is no single project location (i.e. Prague), people are travelling or using communication tools (which further decrease effectiveness of understanding) Delivered from , paid from CZ –> dissatisfaction with internal DE suppliers (RWE Deutschland, RWE IT) 3 - DE work pace calm, people used to work in “cost+” model. - Limited pressure on keeping of project budget & schedules. Standardization leads to decrease of user comfort – roll-back from tuned system to SAP standard. Project benefits (standardization, cost savings) invisible to end-users. 4 At the project beginning, it was considered as an IT implementation without major change of processes. -> The processes support is not optimal in all cases. -> New system is negatively accepted by end-users.

PAGE 7 Project experience & Lessons learnt Following issues are good to address during projects with multiple parties involved

Id Experience Lesson learnt Project management, having 4 members, is too large – different ideas, different interests, different requirements, 5 different communication to the team -> conflict between project managers -> conflict in SteerCo, conflict in project teams ESM authorization concept is different from original R/3 one, which caused problems during go-live: - R/3: structure of roles maintained by CZ IT (which transactions are included in roles, which authorizations 6 objects are available (i.e. company codes, cost elements, cost centres, asset cards …)) - ESM: structure of roles maintained centrally by RWE Deutschland – having additional critical view of value added (duplicate to process design), changes complicated & time-taking

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