SHARED SERVICES CAPITAL - INFORMATION TECHNOLOGY

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1 Updated: August, 0 Page of SHARED SERVICES CAPITAL - INFORMATION TECHNOLOGY 0.0 OVERVIEW Information Technology ( IT ) refers to computer systems (hardware, software and applications) that support business processes used by employees throughout Hydro One. IT infrastructure includes the voice and data telecommunication networks; data centre installations; and computer equipment (servers, computers, data storage devices, and printers). Staff access software applications and systems from offices, field locations and mobile devices using Hydro One s wide area network, local area networks or through Hydro One s virtual private network. IT capital expenditures include hardware and software for projects and programs that each in total cost more than $ million. IT investments are made in accordance with approved business strategies and as part of the overall business plan. 0 Table Total IT Capital Expenditures ($ Millions) Description Historic Bridge Test TX Allocation Software Refresh & Maintenance Minor Fixed Asset Program Development Programs Total Capital IT expenditures are undertaken as projects or programs to meet business requirements. Capital expenditures fall into categories:

2 Filed: May, 0 Page of. Software Refresh and Maintenance Software Refresh and Maintenance programs ensure continued operations of the installed IT application infrastructure, and include costs related to upgrading existing systems. 0. Minor Fixed Assets (MFA) Minor Fixed Assets (MFA) programs ensure the continued operations of the installed IT hardware infrastructure. Expenses in this category address equipment needs generated by the growth in demand for IT services, capacity limitations and the replacement of end-of-life IT equipment and in the Telecom network. MFA includes desktop/notebook computing equipment, field tablet computers, mainframe and storage devices, servers, and peripherals and telecommunication infrastructure including switches, computer-telephony interfaces, etc. 0. Development Programs Development Programs ensure the replacement and/or upgrade of end-of-life applications and include investments in new applications to meet business objectives. Replacement of applications occurs when applications have become inadequate for current functional needs; where the platform is no longer supported by the vendor; to address legislative changes or market driven initiatives; or to significantly modify the application to better support an evolving business capability. New applications are added to address business needs and to support existing or new business processes. Hydro One has established general architecture principles for all of its applications. These are: Applications will be off the shelf and will be maintained in a vendor supported version. Existing custom applications will be migrated to off the shelf solutions wherever possible. There will be fewer applications rather than more.

3 Updated: August, 0 Page of Middleware, such as Oracle s enterprise service bus, will be used as appropriate to facilitate application interconnectivity. Hydro One has already invested in creating this middleware or Service Oriented Architecture (SOA) to enable data integration within and between applications. IT has also developed and is implementing an Enterprise Core Business System Replacement Strategy to replace the existing customized enterprise applications which are approaching end of life. For details, refer to,, Schedule, Shared Services Cornerstone. 0 The major planned IT capital projects which will be funded in 0, 0 and 0 are described below..0 SOFTWARE MAINTENANCE AND REFRESH PROGRAMS 0 Table Software Refresh and Maintenance Program Capital Expenditures ($ Millions) Description Historic Bridge Test TX Allocation Software Refresh & Maintenance Total Hydro One utilizes approximately (year ending 0) business software applications in order to equip its employees with the required technologies to perform their work functions. The software refresh and maintenance program provides the needed software vendors releases, periodic version upgrades, and replacements of activity-focused applications that each meet the total capital threshold of $ million.

4 Filed: May, 0 Page of Applications are replaced or upgraded to ensure applications remain compatible with current IT platforms and other interfacing applications. In this manner, vendor support is maintained to help fix breakdowns or other issues that may occur with the application. Funding decisions are made based on software lifecycles, vendor schedules, reliability requirements, and experience with similar initiatives/projects. 0 Included in 0 are the implementation of enterprise content management and collaboration tools, Sharepoint 00 implementation, further IT security access control and monitoring capabilities, upgrading the desktop operating system to Windows and the MS-Office 00 suite organization-wide, the completion of the Exchange 00 transition, implementation of Microsoft Office Communicator 00 and subsequent uplift to Microsoft Lync 00, and improvements to the disaster recovery platform. In 0, 0 and 0, planned costs include the continuation of the Windows and MS Office 00 upgrade, and commencing Windows Server upgrades to keep data center infrastructure vendor supported. Costs also include a migration from -bit processing to a -bit computing environment on both client and server platforms to accommodate the evolution of enterprise applications to -bit operating system platforms. 0.0 MINOR FIXED ASSETS Minor Fixed Asset investments include specific programs to refresh aging hardware such as personal computers, servers and storage. Equipment is refreshed based on its age and the nature of the applications running on the hardware. Equipment may be upgraded, or improvements may be made to extend hardware lifecycle. Hydro One s strategy is to minimize the costs of ownership, ensure operations risk is kept at an acceptable level, and to maintain function and security. Planned funding is based on equipment lifecycles. This work is broken down into the categories shown in Table below.

5 Updated: August, 0 Page of Table Minor Fixed Asset Program Capital Expenditures ($ Millions) Description Historic Bridge Test TX Allocation Servers and Storage IT Desktops, Laptops, Tablets, Printers and Plotters Telecom Infrastructure Smart Grid Total Servers and Storage This investment is required to respond to and manage annual growth in demand for additional IT processing and storage capacity and to address end of life issues with the existing Unix and Wintel servers. 0 Infrastructure servers are used to run business applications, networks, web services and . Data storage devices are used by business applications and to store and retrieve data. Servers and storage devices reach capacity over time and reach their vendor s end-of-support-life at which time they require upgrading or replacement to increase capacity or to ensure cost efficient maintenance that minimizes or eliminates down time. In determining when systems require replacement, the functionality and operating and maintenance costs are assessed. Hardware upgrades are needed to maintain reliable service for business applications. 0 The funding for the servers and storage refresh program varies year to year depending upon hardware lifecycles and business requirements for increased processing capacity.

6 Filed: May, 0 Page of 00 and 0 represented a cycle of refresh of Wintel and Unix servers to maintain vendor supported levels. It also included ancillary hardware upgrades, and capacity upgrades for core access control and middleware environments in anticipation of increased data processing with SAP-driven processing. In 0 and 0, the cost decreases due to hardware replacements in previous years. The replacement cycle ramps up again in 0 with a focus on data storage frame replacement. 0. IT Desktops, Laptops, Tablets, Printers, and Plotters Desktop and laptop computers are used by most Hydro One staff for office productivity applications such as , word processing, spreadsheet, presentation, and for business applications. Rugged tablet computers are used by field staff. Tablets are used with Geospatial Information Systems ( GIS ) applications for undertaking systems design work and for asset condition assessments. Plotters are used by Hydro One engineering and operations staff for design work and to plot systems maps. Hardware upgrades are required to accommodate new software requirements, to replace end of life equipment, to address warranty considerations and to maintain hardware reliability. 0 Equipment refresh maintains or reduces maintenance costs. Hardware costs tend to increase with age, especially when the hardware is no longer supported under vendor warranty. Hydro One s practice is to replace desktop and laptop computers every three to five years, and printers and plotters every four to five years. The renewal timeline is consistent with industry practice as identified by Gartner industry benchmarking studies. In practice, the refresh cycle has been slightly longer but has been consistent with maintaining functionality and minimizing maintenance costs.

7 Filed: May, 0 Page of The funding for desktops, laptops, tablets, printers, and plotters varies year to year depending upon hardware lifecycles, and business needs. 0 and 0 costs include increased hardware requirements to accommodate the planned upgrade to Microsoft Windows and the upgrade of Microsoft Office suite. The hardware spend in 0 and 0 is to bring the current client technology hardware (laptops, desktops, tablets, etc) inline to support the migration to the Microsoft Windows upgrade, reducing the refresh demands for 0 and Telecom Infrastructure The telecom assets of Hydro One are varied and have a large range of install dates, and lifecycle dates. The business telecom network is used to transmit data required to run business applications. Voice or data network improvements or replacements are undertaken to improve network efficiency and to ensure equipment is current and supported by third party vendors. Projects regularly undertaken include rewiring local area networks, replacing end of life data network switches and routers, upgrading telephone Private Branch Exchange (PBX) switches, replacing un-interruptible power source system, and upgrading the security solutions for external network interfaces. 0 The investment in Networks and PBX/Voic is undertaken to replace end-of-life assets and to maintain service reliability and security. The strategy is to replace equipment that is no longer supported by vendors. For network equipment the refresh occurs about every five years for network related hardware and about every ten years for PBX/Voic equipment. The funding for Networks and PBX/Voic varies year to year depending upon hardware lifecycle refreshes, and business needs for increased bandwidth.

8 Filed: May, 0 Page of. Smart Grid To support the investment in the Smart Grid program there is also necessary investments in server infrastructure to support the applications and tools required to manage and monitor the Grid. The associated documentation for this initiative is filed under, Tab, Schedule, specifically in Sections.. and DEVELOPMENT PROJECTS In support of the business technology roadmap, Development Projects deliver expanded business capability through the introduction of new enabling technologies as well as protecting our current technology investments by addressing end of life replacements of business applications. The business technology roadmap identifies the sequencing and timing of key IT projects and the spend in year varies in line with that overall strategy. Costs for IT development projects are detailed in Table below.

9 Updated: August, 0 Page of 0 Table IT Development Projects Capital Expenditures ($ Millions) Description Historic Bridge Test TX Allocation CRM 0. CTI Upgrades.0 Mobile IT Warehouse Bar Coding 0... HST Implementation. (0.0) HOLMS Replacement.0 0. ecustomer Self- Service Web...0 Site Enterprise GIS Program DX Asset Information System Total ¹These projects are Hydro One Distribution related only.. CTI Upgrades Hydro One s current Computer Telephony Interface (CTI) platform will require replacement to accommodate tighter integration between CTI and the Work force optimization scheduling tool sets. This integration will provide improved customer service as calls will be routed, scheduled and dispatched in a more efficient manner. The existing CTI platform was installed in 00 with minor lifecycle upgrades performed in the interim. The platform will be migrated to voice over internet protocol (VOIP) which will offer enhanced function and reliability.

10 Filed: May, 0 Page 0 of 0 Computer telephony integration is used at Hydro One for: call information display caller's number and screen population on answer; automatic dialing and computer controlled dialing (fast dial, preview, and predictive dial.); coordinated phone and data transfers between two parties, call center phone control. after-call work notification; advanced functions such as call routing, reporting functions, automation of desktop activities, and multi-channel blending of phone, , and web requests; and agent state control and all control for Quality Monitoring/call recording software.. Mobile IT Mobile IT in 0 will build upon the existing investments from 00 and 0 which focused on enabling mobile data collection for station and other asset inspection. This project supports the implementation of off the shelf data collection tools for SAP and other enterprise systems which require data to be collected and reported from the field. 0 Hydro One continues to leverage its investment in mobile software which is a standard enterprise mobile tool for data collection and work status reporting and will also interface with the GIS and SAP systems. The applications work in a connected (real time) or disconnected mode depending on the nature of the work being performed and the availability of telecommunications connectivity. The mobile work plan for 0 focuses on uplifting existing data collection forms to the new standard and mobile platform as well as incorporating the ability to record images from the field as part of an asset record. In 0 there is a lifecycle refresh project to keep the investment in the Enterprise Mobile platform vendor supported

11 Filed: May, 0 Page of. HOLMS Replacement This project will replace our existing Hydro One Learning Management System (HOLMS) that handles input, scheduling, delivery, tracking of training for all employees. The intent is to use native SAP function and decommission the current application. It will eliminate the need for interfaces that currently exist between SAP and the current learning management system. Similar to Cornerstone Phases, the scope consists of and is restricted to doing what is required to turn on the SAP product and make it work as designed in the business requirements, with no SAP software customizations or unnecessary enhancements. 0. ecustomer Replacement This project is a complete re-design of how we interact with our customers online. Currently Hydro One leverages a customer portal for customers to access account information details and history. While a secure portal for customers to access is an important part of the experience, it is also important that we become more accessible to turn around inquiries and more effectively direct them to the correct resource for resolution. Improved analytics can be used to anticipate customer needs and update FAQ pages with the end goal being a lower overall cost of interacting with customers while providing a better customer experience. 0. Enterprise GIS Program Geospatial technology is a key infrastructure that enables a variety of business processes including design, transmission and distribution planning, outage management, work management, real estate and others. Geospatial technology and the underlying connected network model is also a key component required to support the benefits achieved from smart grid initiatives.

12 Filed: May, 0 Page of The 0 to 0 work plan for Geospatial Information Systems includes a major upgrade of Hydro One s primary spatial technologies, the consolidation of multiple spatial repositories into a single spatial container and the creation of an automated interface that will synchronize the asset registry in SAP with the physical location of the assets in GIS. 0 Hydro One's GIS system is based on ESRI ArcGIS, Telvent ArcFM and Rolta OnPoint platforms which integrate with other enterprise applications. The production version. GIS software was released in 00 and is nearing the end of its support cycle along with much of the supporting hardware operating systems & application development platforms. The proposed upgrade to 0.x GIS software is planned be completed in 0. At the present time, there is no single system of record for spatial data; it is managed in silo databases and business processes across Hydro One. Consumers of spatial data are required to maintain their own spatial repositories, which do not necessarily reflect the current state of the network. The Final Destination initiative will consolidate these silos into a single spatial repository by 0. 0 Hydro One's asset data is primarily recorded in two systems: SAP Enterprise Asset Management (EAM) and ESRI Geographic Information System (GIS). Each of these systems has a unique view of the same assets: EAM holds the financial and work-oriented view, while GIS holds the spatial and connectivity view. The integration of SAP and GIS in 0 will achieve a synchronized, composite asset register, including distribution and transmission assets, comprised of the Hydro One's major asset management systems.