Related to Exhibit B-3, ABB will share comment on market reports, related to project justification.

Transcription

1 C3-3 April 6, 2017 Re: ABB Intervener Evidence ABB Enterprise Sftware 400 Perimeter Center Terrace Suite 500 Atlanta, Gergia United States (t) (f) Dear, D. A. Cte, Cmmissiner f the BC Utilities Cmmissin: ABB wuld like t take this pprtunity t address and rectify several errneus statements made in Exhibits B-1 and B-3, which bring int questin the methdlgy and basis fr a decisin t mve t the SAP platfrm fr Supply Chain (and eventually Wrk Management). Such analysis has far-reaching and brad implicatins, including the perceived benefits and near-term prject csts, as well as lnger-term supprt and future upgrade csts. Related t Exhibit B-1: A. Gap Analysis: ABB will detail hw Asset Suite (fka Passprt) can address the 13 gaps, as detailed in Chapter 3, Alternative Analysis. B. Risk Analysis: ABB will debunk the myth that an Asset Suite upgrade has high business and delivery risk. C. Cst f Alternatives: ABB discusses the cst perceptin. Related t Exhibit B-3, ABB will share cmment n market reprts, related t prject justificatin. As yu mve frward in review f this critical prject, please feel free t reach ut at any time with questins. Sincerely, Summer Trudell Accunt Executive Mbile: (404) Summer.Trudell@us.abb.cm

2 Exhibit B-1 Rebuttal (A) Gap Analysis (Sectin 3.3) The 13 gaps, identified by BC Hydr as part f their review, are nt true Asset Suite sftware gaps, but issues derived frm ineffective r incmplete use f current sftware. Thus, the Passprt ptin (knwn as Alternative 2) des nt reflect accurate scring. If BC Hydr bases its cst/benefit analysis n errneus gaps, then there is a high likelihd f less benefit and mre cst than anticipated in replacing Asset Suite with the SAP system. It is ABB s strng belief and experience that an upgrade f Asset Suite is a far mre cst-effective means f capturing the benefits f eliminating r reducing the impacts f the 13 identified gaps. It is imprtant t nte that the scring and weighting f these gaps has an enrmus impact n perceived benefits and derivatin f Net Present Value (NPV), thus accurate representatin f gaps is f paramunt imprtance. Otherwise, the NPV and related csts are misinfrmed and the basis fr apprving such a large-scale prject becmes less sund. Please see belw respnses t each gap: 1 - Inability t manage service-related spend Limited cntract management Limited ability t manage inventry levels Limited ability t manage individual supplier perfrmance Difficulty managing the supply chain fr capital prjects Lack f rder, delivery and payment tracking Inability t supprt sales and returns f unused materials Inability t supprt pre-packaging f materials fr field crews Lack f wireless access t inventry infrmatin N self-serve ptin fr rutine service requests Inability t pay suppliers withut an invice Inability t streamline cntrls and apprvals prcess Inability t integrate the wrk management systems 3 3 Ttal Scre (ut f 52) 50 SAP vs 36 Asset Suite (r Passprt) 1 - Inability t manage service-related spend The ability t manage service related expenditures depends n the ability t define 8 the scpe f wrk fr service cntracts as manageable wrk units. PassPrt culd be readily cnfigured t allw certain services t be 1 defined as manageable wrk 2 units, but nt thse that are variable (e.g. cnstructin services). In cntrast, SAP 3 readily allws fr all services t be defined as manageable wrk units, including 4 thse that are variable. Fr these reasns Alternative 2 (PassPrt) scres 2 and 5 Alternative 1 (SAP) scres 4. Respnse: The Asset Suite Cntract Management applicatin represents ne piece f the Asset Suite applicatins. Cntract Management is integrated with Accunts Payable, Actin Tracking, Design Engineering, Financial Integratin, Labr Entry, Prject Management, Purchasing, and Wrk Management. 2

3 Asset Suite Cntract Management prvides prcurement tls fr service rders and bilateral agreements. It is used t establish the scpe f wrk, distribute accunting charges, and prvide meaningful cntrls fr tracking cntracted services. The fllwing features list demnstrates techniques that streamline effrt and prvide a cmpetitive edge thrugh system integratin: Requisitin fr Cntract Services Request fr Prpsal Prcessing Vendr Bid Prpsals Requisitin Backlg Cntract Prfile Cntract Change Requests Amendments Payment Authrizatins t track cntract activities, including cntractr Labr Entry time sheet rll-ups Cntract Perfrmance Evaluatin Management Reprting Cntract Payment and Clsure, including full integratin with Accunts Payable Financial Integratin The Asset Suite Cntract Management applicatin prvides a standard apprach fr requesting cntract services and effectively managing all aspects f the cntract prcess. Cntract Management prvides the functinality t request, create, and manage standard cntracts, blanket master cntracts, and cntract releases. The cntract prcessing flw may include cntract requisitins and requests fr prpsals (RFPs). Prcesses t plan and apprximate resurce csts, create milestnes t track the prgress f wrk being perfrmed fr a cntract, and create payment authrizatins that allw accunts payable t make a prgress r full payment are included as part f the Cntract Management applicatin. Apprval and infrmatinal ruting capabilities are als an integral part f the Cntract Management prcess. In additin, the Asset Suite Cmpse tl allws BC Hydr t add, update, r rename fields, which shuld readily allw fr all services t be defined as manageable wrk units. Fr these reasns, it is questinable as t why Asset Suite wuld scre a Limited cntract management SAP has an advantage ver PassPrt in the way that key cntract infrmatin is 7 made available t users and the manner in which materials and services are 8 requisitined. In SAP, mre real-time peratinal cntract infrmatin is available t 9 users and requisitins allw fr bth services and materials in ne prcess unlike 10 PassPrt. Bth these advantages allw better cntract management in SAP than in 11 PassPrt. 12 The remaining functinality required t address this capability gap is present in SAP. 13 Fr these reasns Alternative 1 (SAP) scred 4 and Alternative 2 (PassPrt) 14 scred 3. Respnse: As part f Purchased Materials, users can enable the viewing f real-time peratinal cntract infrmatin f bth materials and services, if designed and setup apprpriately. 3

4 Materials used fr a cntract are ften cntrlled cmpletely by the vendr within the scpe f the cntract; hwever, if there are Purchase Orders related t cntract materials r equipment, it is imprtant fr the cntract analyst t be knwledgeable f the status f these POs. Smetimes, materials are prcured specifically fr cntractr wrk, fr example in a cnstructin prject. At ther times, the cntract is a build-and-install cntract and a PO is needed t receive the built equipment. When a cntract requires cnsumables as part f an nging maintenance service agreement, ne r mre POs may als be tied t the cntract. When a PO is intended fr cntract use, the cntract is referenced n the Purchase Order Header page. This page prvides visibility int thse POs. Hence, the ability t identify cntract material status by navigatin between the cntract and PO is prvided in bth directins, frm PO t Cntract and frm Cntract t POs. 3 Limited ability t manage inventry levels 4 Limited ability t manage individual supplier perfrmance 5 Difficulty managing the supply chain fr capital prjects 3Thrugh BC Hydr s PPM prject, the SAP Prject Systems mdule was deplyed 4 t supprt capital prject delivery. By its nature this capability requires integratin. 5 BC Hydr has previusly investigated, during bth the Finance and Prject and 6 Prtfli Management SAP mdule prjects, building additinal integratin between 7 PassPrt and SAP Prject Systems mdule and determined that additinal 8 integratin was nt feasible. As such the PassPrt ptin was given a scre f 0. 9 BC Hydr sees this as a critical shrtcming in PassPrt s capabilities given the 10 direct impact this wuld have n BC Hydr s ability t mre effectively manage its 11 majr capital prjects, particularly cnsidering the significant increase in capital 12 spending in recent years and the expectatin fr this t cntinue fr at least the next years, as discussed in sectin Alternative 1 (SAP) has been given a scre f 4 as it wuld allw fr direct 15 integratin between the SAP supply chain mdule and the SAP Prject Systems 16 mdule. Respnse: Asset Suite is designed t supprt the effective management f inventry levels, supplier perfrmance, and supply chain fr bth capital and peratinal and maintenance (O&M) prjects. ABB has a standard wrkflw fr bth mnitring cntracts and evaluating supplier perfrmance. This data culd be pulled int an in-applicatin reprt r BI platfrm, such as SAP Business Objects r Micrsft PwerBI, and then shared acrss the rganizatin, as required. In additin, Asset Suite has multiple avenues fr integrating t ther business infrmatin systems (such as SAP Prject Systems), as well as numerus capabilities t manage the items as detailed in gaps 3-5 (a summary f which is detailed belw). Numerus installatins can testify t this functinality, which is used in a variety f electricity utility types (e.g. T&D, Fssil and Nuclear Generatin, etc.) Design Engineering Applicatin Overview Utility persnnel are increasingly challenged t prvide cmpetitive designs and estimates t custmers and ptential custmers. The marketplace requires that these deliverables be available in real time. Best practice mandates that designs and estimates be based n apprved standards and current cst data. Asset Suite prvides these capabilities in its Design Engineering applicatin. The applicatin enables the cnversin f a custmer request fr service int suitable alternative designs fr cnstructin wrk. The design can then be ruted fr apprval befre cnstructin begins. Status tracking is maintained thrughut the cycle frm the creatin f a request thrugh design and estimating. Integratin with the 4

5 Asset Suite Prject Management and Wrk Management applicatins prvides extended tracking f the wrk thrugh the cmpletin f the cnstructin phase. The result ensures quick respnse t requests fr service with the mst cst-effective design slutin, in accrdance with standards and guidelines. Applicatin Business Flw The Design Engineering prcess begins with the receipt f a request fr service that requires design wrk fr a cnstructin prject. Preliminary infrmatin is gathered frm a client and is related t any billing required. A service request is created in the system fr the cnstructin prject, and is reviewed, apprved, and linked electrnically t a design header. A number f design versins are created t identify, fr client apprval, the lcatins, materials, labr resurces, permits, equipment, and wrk standards needed t cmplete the prject fr a client. Nte: The design may be started at this pint withut using a service request, but is nly recmmended if a billing request is nt being used.) The design versins are then prcessed t shw the steps needed t transfer the apprved design t a wrk rder. If an apprval grup r persn is in place, Asset Suite can send design AAAs (Actin/Awareness/Alert messages) fr apprval. Only ne design may be selected and issued. The system des nt allw yu t add additinal designs. A single design is used t create a Wrk Order r t be cnverted t a task n a Wrk Order. The high-level business flw includes the fllwing basic functins: The Design Engineering applicatin prvides integratin with the fllwing Asset Suite applicatins: Dcument Management - Within Design Engineering, dcuments defined within the Dcument Management applicatin may be identified as references fr the fllwing bjects: Cmpatible Units Service Requests Design Versins The Asset Suite Dcument Management applicatin has been designed t manage Dcuments. Dcuments cnvey infrmatin in graphical and text frmats, and may exist as electrnic r paper versins, r bth. In any event, dcuments have numerus attributes including the ability t be uniquely identified. Cntract Management - Within Design Engineering, cntracts and cntract requisitins defined within the Cntract Management applicatin may be identified as references fr Cmpatible Units and Design Versins. Nte that if the Asset Suite Cntract Management applicatin is unavailable, entries may be made fr references within Design Engineering but are nt be validated. In this situatin, cntract definitin allws entry f a cntract title within Design Engineering. If the Cntract Management is available, the designer may navigate frm the Cntracts and Miscellaneus Cst page t the Cntract Requisitin page, where a new Cntract Requisitin may be initiated. Inventry Management - The Design Engineering applicatin is functinally tied t the Inventry Management applicatin in several key areas: Cmpatible Unit Materials: When defining a cmpatible unit, the list f catalg items that make up the cmpatible unit may be identified. When listing materials, the user may indicate whether the material item is t be reserved when transferred t a material request. Cmments may be entered t cmmunicate, fr example, special-issue instructins t warehuse persnnel. 5

6 Design Material Requirements: The designer may list cmpatible units, and recrd fr a design any additinal material requirements (thse materials nt identified within a cmpatible unit). In develping the cst estimate fr the design, Asset Suite calculates the estimated csts based n the current average unit cst f materials fund in the Master Materials Catalg at the time the CU r material is entered fr the design. If there is a lng delay befre cnstructin begins, the designer may chse t rebuild the cst estimate (using a pull-dwn ptin frm the Design Versin Details page) t btain an updated cst estimate fr the design. As wrk begins and materials are issued t the wrk rders fr the design, materials are issued fr the wrk rder based n the real-time average unit cst f materials, nt the cst at the time the estimate was built. Transfer f Cmpatible Unit Material t the Material Request: The CU indicatr n the Material Request page allws navigatin t the Cmpatible Unit Material List, which supprts the viewing f materials cmprising a specified cmpatible unit r cmpatible unit grup. Once a multiplier is entered, the material request can be updated. The quantity f each catalg item is calculated by multiplying the CU quantity required by the multiplier. This catalg item is appended t the Material Request, r where the catalg item already exists n the Material Request, and then the calculated CU quantity is added t the existing quantity required. Transfer f Material frm the Design t the Material Request: The design can identify individual material requirements as well cmpatible units that are assemblies f multiple catalg items. These materials may be transferred t the material request nce the design has been issued fr planning cnstructin. When the cnstructin planner plans the wrk rder tasks, material can be transferred t either a new material request r an existing material request fr wrk rder task. When a new material request is created, the planner reviews it t update the date materials are required. Als, catalg IDs and quantities can be appended t the material request. Wrk Management - The Design Engineering applicatin is functinally tied t the Wrk Management applicatin in the fllwing key areas: Transfer f Design Cmpatible Unit infrmatin t the wrk rder task: This transfer may affect resurce requirements, material requirements, task accunt distributin, and assciated prperty units. The transfer f the design t a wrk rder may be accmplished frm the design r frm within an existing wrk rder task. At the time f transfer, the design cmpnents related t each design based task (a specific design task r a task based n a design task type/crew type cmbinatin) gruping are transferred t wrk rder tasks. The designer may specify a mdel wrk rder r an existing wrk rder as the target fr the transfer. When n wrk rder is specified, a wrk rder is generated using nly the design details. When a mdel wrk rder is specified, a wrk rder is generated using details frm the mdel, and the design details. When an existing wrk rder is specified, the design details are transferred int existing tasks (if matching tasks exist), r generated as new tasks within the existing wrk rder when the design based task des nt already exist as a wrk rder task. Transfer f additinal Resurce Requirements: Additinal resurces that were specified within the design (that is, resurces that have n relatinship t a cmpatible unit) may be transferred. The planner may select the additinal design resurces fr inclusin int the wrk rder task. Transfer f additinal Material t the Material Request: This includes material required fr cnstructin as well as material returned frm the cnstructin. Material that is planned fr return may be specified as salvage r junk. Transfer f Permit Requirements: The transfer f Design Permits is initiated frm an ptin n the Task Requirements and Permits page. The ptin navigates the planner t the Design Permits page, where permits may be selected. The Cnfirm functin transfers the selected permits back t the task. The csts related t the permits are transferred as miscellaneus expenses int the wrk rder task. Transfer f Cntract Requirements and Miscellaneus Expenses: Fr transfer f Design Cntracts and Design Miscellaneus Expenses, the Task Cntracts/Miscellaneus Expense 6

7 page is used. An ptin navigates the planner t the Design Cntracts and Miscellaneus Csts page, where all relevant data is presented. The planner may select all entries apprpriate t the transfer. The Cnfirm functin transfers the selected items back t the wrk rder task. Transfer f Dcument References: The transfer f Dcument References is initiated frm an ptin n the Task Dcument References page. The ptin navigates the planner t the Design Dcument/Wrk Standards page, where dcument references may be selected. The Cnfirm functin transfers the selected dcuments back t the task. Transfer f Wrk Standards: Wrk Standards specified within the design may be transferred t the wrk rder task frm the Task Standards page. An ptin allws navigatin t the Design Dcuments/Wrk Standards page, where individual wrk standards may be selected and transferred t the wrk rder task. Prject Management - When the design is fr prject-related wrk, the Prject ID is referenced n the design, allwing drill-dwn t the Prject Definitin page. The ppsite is als true: The design can be referenced n the prject definitin, which allws drill-dwn t the Design Develpment page. Actin Tracking - Designs may be referenced frm the Asset Suite Crss Reference table n the Asset Suite Crss Reference page. The Design Develpment page may be directly accessed frm Actin Tracking. 6 - Lack f rder, delivery and payment tracking 17This capability requires that the end-t-end prcess frm rder, t delivery, t 18 payment be under a single system. Currently the rder and delivery prcesses are 19 managed in PassPrt, and the payment prcesses are managed in SAP. This 20 capability gap, by its nature, cannt be clsed under Alternative 2 (PassPrt). 21 Alternative 2 (PassPrt) was given a scre f 3 as nt all f the payment infrmatin 22 can be interfaced back t PassPrt. Alternative 1 (SAP) was given a scre f 4 as 23 the deplyment f SAP fr supply chain wuld allw fr the rder, delivery, and 24 payment prcesses t ccur under ne system. Respnse: Asset Suite shuld nt be given a lwer scre simply because payment prcesses are already cmpleted in SAP. In fact, in many utilities that use Asset Suite, payments are made in systems ranging frm SAP, PepleSft, and thers (including Accunts Payable service cmpanies). Asset Suite can be used t create the payment (including all audit cntrls and matching prcesses). Asset Suite als manages the cst f prjects, which are usually sent t the General Ledger (Fixed Asset r General Ledger, depending n the determinatin f Capital r O&M charges). The recrd f actual payment can be retained in the system used t actually send the payment, and is nt required t be prvided t Asset Suite. Despite the cmments in the evaluatin, this is nt a general requirement at any f the utility cmpanies that utilize Asset Suite. The Asset Suite Accunts Payable applicatin des prvide the functinality t rganize, mnitr and cntrl payment prcessing fr an rganizatin. It prvides the ability t enter invice infrmatin, ensure that the invices are in accrdance with the financial rules, and enables cash disbursement prcessing and payment recnciliatin. Extracts are available t prvide Accunts Payable infrmatin t ther applicatins. Payment requests may take the frm f invices, vuchers, r individual emplyee payment requests in supprt f emplyee advances r expense statements. Cash disbursements may be: manually prepared checks immediate payments batch-generated checks 7

8 EDI r XML transactins prcessed using a third-party payment prcessing system Payments are recnciled against financial institutin infrmatin. These items, alng with defined financial cntrls and accunting classificatins, present a financial picture f the Accunts Payable activities and facilitate the versight f a cmpany's financial cnditin. 7 - Inability t supprt sales and returns f unused materials Alternative 1 (SAP) wuld fully supprt the return f unused 1 materials frm the field 2 and was scred 4. It is assumed that returns prcessing in Passprt culd be 3 imprved. Hwever, Passprt des nt have a sales and distributin mdule, which 4 is required t supprt the sales and returns f unused materials. Fr this reasn, 5 Alternative 2 (PassPrt) was given a scre f 3. Respnse: Asset Suite has tls within Surplus Analysis and Investment Recvery t identify surplus stck and its subsequent remval frm Inventry, thereby reducing carrying csts and releasing capital that is tied up within warehuses. Surplus Analysis prvides methds f identifying surplus candidates and Investment Recvery prvides a methd t recver inventry lsses fr surplus, bslete, r damaged material that is nt returnable t the purchase vendr. Surplus Analysis activities are cmpsed f the fllwing steps: Surplus material is identified and a Surplus Material Request is created and apprved. The material is picked, transferred t, and received at an Investment Recvery facility. A Marketing Plan is created t cnslidate the material and bids are created and sent, if required. A Material Sales Order is generated when a buyer is identified. Surplus material sld is shipped t the vendr. The Surplus Analysis and Investment Recvery prcess uses these pages: The Surplus Candidate Analysis Reprt Submissin (IG01) page is used t launch the batch prgram which will analyze the stcking levels f Catalg IDs that match the specified parameters fr surplus candidates. A reprt is generated with the surplus candidate results. The results are viewed and prcessed nline using the Surplus Planning Wrksheet (I600), which is then used t actively manage ptential surplus candidates int Surplus Recmmendatins fr further analysis, if required. T assist in identifying surplus candidates, the fllwing pages are used: The Surplus Recmmendatin (I610) page prvides a view f all Surplus Candidate lines that have been gruped tgether n a single Surplus Recmmendatin. By displaying a Surplus Recmmendatin, all the Surplus Candidate lines f the recmmendatin and their ttal value can be viewed at a glance. This page is used t prcess ptential surplus candidates. The Surplus Candidates and Analysis (I620) page is used t find candidates fr surplussing. The Material Analyst uses the search functin t btain a list f material pssibly requiring surplus by searching fr material with n usage r n usage frm a certain date. Searches can be perfrmed n Catalg IDs that have never been issued r have nt had activity since the date entered in the Last Issue Date field. The Surplus Recmmendatin Reprt Submissin page (IG02) is used t initiate the printing f Surplus Recmmendatins. The Surplus Recmmendatin Reprt will print by Surplus Number and is srted by the Inventry Value f the Surplus Recmmendatins, in descending rder. 8

9 If Investment Recvery is used t surplus the material and t recrd the sale f the surplus items, a Surplus Material Request is created n page I010. When the Material Request is apprved, the material is picked and transferred t an Investment Recvery Facility. When surplus material is transferred t an Investment Recvery facility, a Marketing Plan is created n page I600 t cnslidate material and identify purchase vendrs. When a Marketing Plan is apprved, vendr bids can be created thrugh the Asset Suite Purchasing Request fr Qutatin pages. Material at an Investment Recvery facility is stred n pallets. The pallets can be assigned a number and referenced n the Marketing Plan. A Pallet Inquiry (I601) page is prvided t view what material is lcated n a pallet. When a vendr is identified t sell the surplus material, a Material Sales Order (MSO) is generated frm the Marketing Plan. The Marketing Plan can be fr mre than ne MSO t take advantage f Vendr qute respnses. The MSO is priced per line item r by lt price. A Terms and Cnditins page (I611) is used t add a shipping address, terms, and standard/prcedure t the MSO reprt. When the MSO is APPROVED, a Shipping Ntice (I200) is generated t ship the material t the vendr. The Vendr Check Number is recrded n the MSO which cmpletes the Investment Recvery transactin. As part f the Surplus prcess, the Shipping Ntice (I200) page is used t ship the surplus material t the vendr (buyer). A Shipping Ntice can be ptinally generated frm the Surplus Recmmendatin (I610) r Surplus Candidates and Analysis (I620) pages if the Investment Recvery ptin is nt pursued. The Shipping Ntice number will be stamped n the Surplus item and displays n the Surplus Recmmendatin (I610) and Surplus Candidates and Analysis (I620) pages. 8 - Inability t supprt pre-packaging f materials fr field crews Respnse: This culd be accmmdated thrugh electrnic wrk packages r setup in ther ways, depending upn specific requirements. 9 - Lack f wireless access t inventry infrmatin Respnse: ABB s Asset Suite has a number f mbile-enabled applicatins, including AnyWare fr Inventry (AWI), Actin Manager, and Mbile Apprvals. AWI allws warehuse persnnel t perfrm duties, such as Material Picks, Cycle Cunts, Material Returns, and Bin Mvement. Actin Manager is a persnal prductivity app t supprt wrk and service requests. Mbile Apprvals allws users t supprt actins related t wrk rders, invices, timesheets, cntracts, etc N self-serve ptin fr rutine service requests 13 Autmatin f rutine prcurement is dependent n a services catalgue and an 14 easy user interface t navigate and wrkflw. Given that Alternative 2 (PassPrt) 15 has mre limited services catalgue capability than SAP, it scred 3 while 16 Alternative 1 (SAP) scred 4. Respnse: It is unclear why Asset Suite is perceived as having a mre limited services catalgue, r why this culdn t be autmated in Asset Suite? 11 - Inability t pay suppliers withut an invice The functinality t pay a supplier withut an invice is called Evaluated Receipt 9

10 18 Settlement (ERS). PassPrt des nt have ERS capability althugh sme limited capability culd likely be custm develped in 1 PassPrt. As a result, Alternative 2 2 (PassPrt) scred 1, while Alternative 1 (SAP) scred 4. Respnse: This analysis is simply incrrect. Asset Suite can be used as the utility client requires, and ERS can be accmmdated if the utility custmer requires it. As shwn in the fllwing paragraphs, the Accunts Payable applicatin sftware is very cmprehensive and flexible, and althugh paying a supplier withut an invice is usually nt best practice, it is ften cmmn practice in sme utilities, requiring cntrls and reprting unique t this situatin. The sftware can be cnfigured fr this capability thrugh business prcess design as the sftware is implemented. Accunts Payable Applicatin Overview The Asset Suite Accunts Payable applicatin prvides the functinality t rganize, mnitr and cntrl payment prcessing fr an rganizatin. It prvides the ability t enter invice infrmatin, insure that the invices are in accrdance with the financial rules, and enables cash disbursement prcessing and payment recnciliatin. Extracts are available t prvide Accunts Payable infrmatin t ther applicatins. Payment requests may take the frm f invices, vuchers, r individual emplyee payment requests in supprt f emplyee advances r expense statements. Cash disbursements may be: manually prepared checks immediate payments batch generated checks EDI r XML transactins prcessed using a third-party payment prcessing system Payments are recnciled against financial institutin infrmatin. These items, alng with defined financial cntrls and accunting classificatins, present a financial picture f the Accunts Payable activities and facilitate the versight f a cmpany's financial cnditin. The primary business activities perfrmed in this applicatin include the fllwing: Invice Prcessing (includes Purchase Order Invices, Signature Purchase Order Invices Prcessing, Cntract Invices Prcessing, and Signature Cntract Invices Prcessing) Rute fr Apprval, if needed Match Prcess Review Invice, if needed Apprve r Reject fr Payment Prcess Payment Vucher Prcessing Create Vuchers Enter r Mdify Accunt Distributin Apprve r Reject fr Payment Nn-PO r Nn-Cntract Related Invice (Vendr-Only) Prcessing Create Invice Header Create Invice Lines 10

11 Enter Accunting Infrmatin Match Prcess Apprve r Reject fr Payment Prcess Payment Evaluated Receipt Settlement (ERS) Invice Prcessing Update Vendr Purchasing Cycle Prcess Receipt Create ERS Invice Match Prcess Apprve r Reject fr Payment Prcess Payment Cnsignment Invice Prcessing Update Catalg Perfrm Material Cycle Cunt r Issue Material Create Cnsignment Invice Match Prcess Apprve r Reject fr Payment Prcess Payment Recurring Invice Prcessing Create Mdel Invice Establish Recurring Schedule Create Recurring Invice Match Prcess Apprve r Reject fr Payment Prcess Payment Credit Invice Prcessing Manually Review Credit Invice Create Credit Invice Match Prcess Apprve r Reject fr Payment Prcess Payment Scheduled Payment Prcessing Print Preliminary Payment Register Manually Review Preliminary Payment Register Update Payment Requests Prduce Batch Payments Special Payment Prcessing 11

12 Prcess Request in Asset Suite Create Immediate Payment --OR-- Manually Create Check Recrd Manual Check Cancel Check Prcessing Manually Stp Payment Cancel Check Review Payment Request Emplyee Payment Prcessing Create Emplyee Payment Request Apprve r Reject Emplyee Request Determine Emplyee Payment Amunt Prcess Payment Bank Accunt Recnciliatin Prcessing Manually Prcess Accunt Transactins Manually Ntify IT t Run Tape with Laded Bank Infrmatin Clear Transactins and Update Accunt Review Results and Prvide Directin, if needed Reslve Discrepancy 1099 Prcessing Manually Review and Crrect 1099 Addresses Review 1099 Amunts Evaluate 1099 Ttals Create 1099 Exprt File Vendr Payment Inquiry Lkup Payment Infrmatin Manually Give Payment Infrmatin t Vendr --OR-- in the case f unapprved r mismatched Invices Cntact User Department Fllw-up With Vendr 12 - Inability t streamline cntrls and apprvals prcess 3 Clsing this capability gap requires wrk t be managed, including apprval, in a 4 single system. Alternative 1 (SAP) will largely allw the financial cntrl and 5 apprval f wrk t ccur in SAP. Alternative 1 (SAP) will nt fully allw the clsure 6 f this capability gap because certain wrk (Distributin Design Wrk and 7 Generatin & Transmissin Statins) will remain in PassPrt unless and until Wrk 8 Management and Asset Management are undertaken in SAP. Alternative 1 (SAP) 12

13 9 was given a scre f 3. Alternative 2 (PassPrt) was given a scre f 2 as much f 10 the wrk will never be managed in PassPrt and there is n Human Resurces 11 mdule in PassPrt t supprt the use f rganizatinal rles t determine apprval 12 authrity. Respnse: There are a number f ways t manage the apprvals prcess in Asset Suite using infrmatin frm SAP s HR mdule withut any negative impacts. Asset Suite has an Actin Awareness Alert (AAA) Ruting prcess that prvides the ability t implement a cmpany's established apprval and infrmatin flw prcedures. A brief review f the cncepts assciated with AAA ruting is cvered belw. Ruting is the ability t submit a package f infrmatin fr review, apprval, and cmment. Electrnic ruting invlves identifying a list f reviewers fr an item requiring review r apprval. Entries in the rute list identify either an individual r a grup f individuals wh must act n the item. The rute list als identifies the type f respnse needed frm each individual r grup. An Alert Grup is a number f individuals wh have equal authrity t take specific actin, such as t apprve a wrk rder. An Alert Grup may be qualified by Facility. Asset Suite ntifies all members f an Alert Grup either serially r simultaneusly. The first member f an Alert Grup t acknwledge a AAA message des s fr all members f the wrk grup. AAA Rute List prcessing fr apprvals can be defined as being Parallel r Sequential. Parallel prcessing means all Alert Type recipients will be sent AAA messages simultaneusly n submissin f the Rute List. These recipients may APPROVE (r take sme ther actin) in randm rder. Sequentially prcessing means serial Alert Type recipients will be sent a AAA Message (1) in the sequence (r rder) that the recipient has been placed n the Rute List, and (2) nly after the prir recipient (if any) has taken sme type f actin. T initialize the AAA Ruting capability fr a cmpany yu must: Establish the ruting parameters Define Rute Grups and Rute Lists Additinal AAA capabilities are prvided fr: Apprval Matrix Ruting definitin Rute List Delinquency Tracking In additin, as discussed under gap #9, there are Mbile Apprval ptins enabling the apprpriate management t respnd t actin requests, wrk requests, invice, timeseheet, and/r cntract requests via a phne r tablet Inability t integrate the wrk management systems 13 Multiple systems exist tday t manage wrk at BC Hydr, all f which are currently 14 integrated with SAP. Additinal integratin culd be built between SAP and PassPrt 15 as well as the ther systems that supprt wrk t partially meet this bjective. 16 Hwever, full seamless integratin f wrk management systems fr BC Hydr s 17 many different types f wrk is nt pssible. As a result, Alternative 2 (PassPrt) 18 was given a scre f While deplying SAP wuld prvide sme initial benefits, sme future effrt t put all 20 wrk rders in SAP wuld still be required. As a result f the remaining wrk, 21 Alternative 1 (SAP) was als given a scre f 3. 13

14 Respnse: It is unclear which types f wrk are perceived as nt being supprted in Asset Suite, nr why full integratin is deemed as nt pssible. ABB als has a mbile wrkfrce management system, Service Suite, t manage scheduling and dispatch f wrk t the field. Gap Analysis Summary The abve gaps were rated based n an internal prject team, wh neither cnsulted ABB nr understand current Asset Suite capabilities; therefre, scring and related calculatins d nt reflect true value, benefits, and csts. In summary, if the Alternative 2 ptin scres higher, as it shuld give the abve infrmatin, the case fr clsing the gaps with SAP Supply Chain ges dwn substantially. (B) Risk Analysis (Sectin 3.3.4) Business Risk The assumptins arund business risk listed are incrrect. There is n reasn that an Asset Suite upgrade wuld pse a greater business risk, if executive leadership supprts the upgrade and the prject is well designed and executed. Further, the reasning in this decisin was made withut any engagement with the Asset Suite sftware vendr and withut a prpsal n hw t implement the prject. Specifically: 1. Change management will equally be a part f either an SAP transitin r an Asset Suite upgrade; 2. Asset Suite can flexibly manage business prcesses, perhaps even mre s than SAP, and the Asset Suite sftware wner generally urges its custmers t utilize best practice, which are cdified and shared with custmers during every implementatin. There is little risk that a utility wuld be restricted in any manner frm achieving best practice, unless lcal situatins dictate deviatins. Technlgy Risk The statement that an Asset Suite upgrade wuld result in greater IT cmplexity and greater challenges arund future mdificatin is simply errneus. The Asset Suite 9 platfrm has actually prven t be a lwer-cst technlgy platfrm t supprt, easing future upgrades by taking advantage f current technlgies and leveraging tls that allw the cnfiguratin f the sftware withut heavy custmizatin csts. In shrt, with Asset Suite 9, ABB s ultimate gal is t future-prf the sftware, meaning that all cde is Generally Available, enabling future patches and upgrades t prgress in an efficient, cst-effective manner. Prject Delivery Risk ABB wrks with a number f Systems Integratrs, including Delitte, PricewaterhuseCpers, Accenture, and ptentially thers, as well as ther niche partners (e.g., Trinr, whm BC Hydr engages tday). While there may nt be as many peple in the marketplace with Asset Suite implementatin experience, the sftware is significantly used arund the wrld in a variety f utility specific situatins. In pint f fact, Asset Suite prjects generally require much less time with smaller team sizes than SAP (ften at a much smaller fractin f cst). 14

15 Lastly, in additin t the System Integratrs shwn abve, ABB has a large number f cnsultants able t deliver the sftware either n its wn r in partnership with ne r mre systems integratin teams. (C) Cst f Alternatives (Sectin 3.3.5) The grss assumptins made in this sectin are simply incrrect. With a large number f systems integratrs and the sftware vendr available, n attempt was made t determine actual csts, and instead, estimates made by BC Hydr penalized the Asset Suite slutin withut accurate results. This is particularly wrng because the system was already in use at BC Hydr, and infrmatin frm the vendr culd easily be discvered if there were genuine interest. It is far mre likely that had this infrmatin been sught, BC Hydr wuld have learned that the sftware culd have perfrmed the business prcesses desired in a cst-effective technlgy platfrm that wuld wrk well with any financial (ERP) system (such as SAP r thers). Further, the requirement f re-training a large grup f emplyees in a new system with a cmpletely different apprach wuld nt be required, actually saving BC Hydr cnsiderable funds. Estimates that are burdened thrugh a mdel based n ne sftware is clearly nt a reasnable apprach fr evaluatin, when the actual data (estimates and references t supprt them) culd be delivered when asked fr. In this instance, the questins were nt asked, and the estimates penalized the Asset Suite (Alternative 2) ptin unreasnably. In the Summary, Sectin 3.3.1, BC Hydr states, as a result f the uncertainly f Alternative 2 csts, it is difficult t draw a cnclusin as t which alternative is preferable based n cst alne. If cst is remved as a factr, and the gaps are nt as great as depicted in the Alterative Analysis, BCUC shuld be cncerned abut the value f such a large expenditure. It is wrth explring whether an upgrade f Asset Suite can indeed clse such gaps at a lwer cst. In the Cnclusin, Sectin 3.3.7, BC Hydr states that Alternative 1 (SAP) is the preferred alternative, based n a number f factrs, many f which are misleading, verstated, r simply untrue. Related t the Cmmn Platfrm Strategy, it may be wrth nting that many f SAP s mdules are actually acquisitins it has made frm smaller cmpanies, which create the perceptin f a Cmmn Platfrm. Much f BC Hydr s Supply Chain applicatin tuts the merits f a Cmmn Platfrm acrss all business functins withut much discussin arund the state f the individual SAP mdules and future implicatins. Having a large cmmn platfrm cmprised f mdules in varius states can actually drive up prject and technical csts, as well as future supprt and upgrade csts. 15

16 Exhibit B-4 Cmments 1. On page 5 f 289, it s wrth nting that the Gartner Magic Quadrant fr Energy and Utilities Enterprise Asset Management Sftware, dated September 2015, was issued prir t ABB s release f Asset Suite 9 platfrm, an iteratin f sftware culminated frm ver 30 years f develpment. The stated cautin that Asset Suite is ne f the highest-cst EAM slutins t deply and maintain has been addressed with the release f Asset Suite 9 and is n lnger true. The secndary cautin that ABB is a niche player in the utility market, this is true. Unlike several f ur cmpetitrs, ur sftware is designed with the needs f a utility in mind. Regarding the stated cautin that There are limited service prvider ptins, mainly ABB itself, and references reprt resurce cnstraints, ABB has endeavred t strengthen its partner netwrk and EAM practice. 2. Regarding EAM market share, if yu lk at the ARC Advisry Grup s Enterprise Asset Management Glbal Market Research Study: Market Analysis and Frecast Thrugh 2020, published in 2016, ABB is a leading supplier f EAM sftware fr pwer generatin. 16