Re-Engineering and Re-Organisation of the Revenue Management Function Project Overview August 2007

1. Re-Engineering and Re-Organisation of the Revenue Management Function Project Overview August 2007

2. Objective of Presentation • Introduce the re-engineering and Re-organisation of Revenue Management Project • Introduce the role of WTA Program Management Unit

3. Contents • Legislative Imperatives • Other Project Drivers • Key Challenges Facing WTA • Objectives of the Re-engineering project • Approach • Work Streams • Deliverables and Timelines • Challenges • Program Management Office

4. Legislative Imperatives • Approval for the establishment of a National Water Resources Infrastructure Agency (NWRIC) to perform the operations and development of water resources infrastructure (2006). • The National Water Act provides for establishment of Catchment Management Agencies (CMAs) - functions related to water resource management.

5. Other Project Drivers • Cabinet Directive for Trading and Related Accounts, decision taken to separate the Water Trading Account and the Equipment Trading Account. (SY 3/6/B dated 22 May 1995) • DWAF started operating Main (or Exchequer) and two Trading Accounts Water Trading and Equipment Trading. • Water Trading Account now comprises Water Trading and Equipment since 1 April 2006. • The SAP software solution was configured and implemented in response to the requirements above • Auditor General Qualifications due to absence of relevant policies and procedures and inappropriate implementation of accrual accounting principles.

6. Challenges Facing WTA • Organisation and Governance • A relatively new entity lacking an appropriate business plan • Lacking a finalised organisation structure • Dependency on other units and external stakeholders • Ongoing restructuring of the Department • Process • Alignment between business processes and SAP • Absence of essential policies and procedures • Alignment between Head Office and Regions • Auditor General qualification and issues • Systems • Data integrity and interfacing issues (WARMS and PERSAL) • Compliance with accrual accounting requirements • Incomplete customer data

7. Challenges continued • People • Without approved structure hiring is delayed • Lack of capacity and skilled personnel • Lack of interim arrangements (during restructuring) • Dependency of wider reorganisation initiatives • Legal & Commercial • Adequacy of commercial terms, conditions, tariffs and SLAs to enforce invoicing and payment compliance

8. Objectives of this project • To assist the in the re-engineering of the Water Trading Account’s business processes • To assist in introducing policies and procedures that will facilitate the implementation of a control environment that will ensure an efficient and effective utilisation of the organisation’s assets • To establish a process culture that will unlock additional revenue potential for the Trading Account • To assist in Keeping the current operations going through addressing the numerous day to-day issues including eesponding to issues and qualifications raised by the Auditor General • To assist in mananging and coordinating the various projects and initiatives being undertaking by WTA

9. June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Operational Support and Continuous Improvement Scoping and Mobilisation Due Diligence and Root Cause Analysis Gap and Option Analysis SolutionsProposals Implementation Planning Leading Practice To Be Model Equipment Trading Account Organisation and People Legal Review Project Management Change Management Programme Management Office (PMO) 1 2 3 4 5 Management Checkpoints Approach

10. Work Streams

11. Business Process of WTA

12. Business Process Scope Definition • The following business processes will be addressed by this project: • Registration-to-Cash • Construction Capital Projects • Equipment Trading Process Order-to-Cash • Cash Management • Budgeting and Reporting • Statutory and Legislative Reporting • Procure-to-Pay • Business processes set out below are not being addressed by this phase of the project. Some maybe addressed by other initiatives: • Asset Management • Payroll • Equipment Maintenance • Construction Maintenance

13. Deliverables and Timelines - Business Processes

14. Deliverable and Timeliness - Business Process

15. Deliverables and Timelines - Construction and Equipment

16. Deliverables and Timelines - Legal

17. Deliverables and Timelines - Organisation and People

18. Deliverables and Timelines - Organisation and People Emerging Challenges • Role and involvement of HR in the project is not clearly defined • Operational fundamentals are not in place: • No business plan, • No operational plans, • No annual performance plans and agreements and • No performance agreements • Lack of transitional arrangements to support ringfencing and eventual the separation of the Trading Account from the Exchequer Account • No approved Organisation Structure • No placement and migration plan • Lack of capacity (both numbers and skills) • Inadequate training on accrual accounting

19. Deliverables and Timelines - Organisation and People Recommendation • Assign an HR official to be a counterpart to consultants • Initiate a process to focus on the overall OD strategy looking at the organisation as a whole and supporting the Chief Director to put in place plans for building the entire system • Develop and finalise a placement and migration plan • Appoint critical skills required within Trading Account

20. Change Management

21. Program Management Unit and Continuous Improvement Objectives • Assist in Keeping the current operations going through addressing the numerous day to-day issues including eesponding to issues and qualifications raised by the Auditor General • Assist in mananging and coordinating the various projects and initiatives being undertaking by WTA • Tool for bringing together people activities and information to achieve strategic objectives • PMU aims to ensure that the quality of the output from the various initiatives meets the required standards through the use of appropriate technology

22. Program Management Unit and Continuous Improvement • A number of initiatives and projects concurrently running within the Trading Entity and Trading Account • Currently trying to establish objectives, reporting structures and deliverables of the various initiatives including establishing linkages and dependencies • Requested information on current projects and initiative. We are given to understand that the following initiatives are currently underway: • Infrastructure assets verification and valuation (EWAM), • Asset Management (Kwinana) • Review of the Tariff determination strategy, • The establishment of the budgeting framework and • The optimisation of the implementation of SAP.

23. Program Management Unit and Continuous Improvement

24. Program Management Unit and Continuous Improvement

25. Program Management Unit and Continuous Improvement Challenges • Need to align work being formed by various projects to the NWRI business plan • Not all projects have clearly outlines governance and reporting structures - Difficult to manage performance • Interventions on projects that are nearing completion • Approval of organisation structure for the WTA • Lack of clearly identified support structures especially for IT and Human Resources • Completeness of our register of projects and initiatives