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Marty Stetzer Kristi Malik Qittitut Consulting Houston

Positioning for Growth Evaluation of the Contracting Process Review Session – February 22, 2006 Willie Underwood CY Zebot. Marty Stetzer Kristi Malik Qittitut Consulting Houston. Presentation Outline. Agenda: Project objectives The approach used Project deliverables and status

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Marty Stetzer Kristi Malik Qittitut Consulting Houston

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  1. Positioning for GrowthEvaluation of the Contracting ProcessReview Session – February 22, 2006Willie UnderwoodCY Zebot Marty Stetzer Kristi Malik Qittitut Consulting Houston

  2. Presentation Outline Agenda: • Project objectives • The approach used • Project deliverables and status • Early discoveries and verbatims • Proposed Next Steps Appendix: Deliverables Presentation & Discussion

  3. Project Objectives • Review the contracting process to see whether “all the right things are being done in the right order” to meet your current and future business objectives. • Find ways to free up the Marketers to spend more time with customers. • Examine the organization and work content of the Marketers and the Contract Administration Group to ensure current and future workload is balanced. • Coordinate with the CNP Internal Audit work, which is already scheduled.

  4. Approach: Interview List / Status

  5. Approach: Process to Date Level 2 Flow Charts Level 3/4 Activity Lists Staff No 1 Staff No 2 Staff No 14 Plan the Deal Deal Flow Related Deal Flow Related Deal Flow Related Make Execute Settle Daily Business Non- Deal Flow Related Non- Deal Flow Related Non- Deal Flow Related Develop the Deal Plan Contract Admin Marketers Make 14 items 18 items Execute Settle Long Term Business

  6. Project Deliverables and Status • Detailed “as-is” process maps for the Contract Process from deal inception until they are entered into the nomination system. Note: Needed Another series of maps for “Long Term Business” • An evaluation of the workload in the Marketers and Contract Admin staff. Note: Needed Detailed Activity & Task Lists to accomplish item 2. 3. “As-is” process maps will be constructed in “swim lanes” to delineate key responsibilities across individuals and the CNP organization. 4. Two workshops are recommended with the participants in the project. The First one (3-4 hours) will be used to validate the “as is”… closely followed by a Second (2 hour) session to define needed improvements. 5. Identified improvement Discoveries and Verbatims. Summarizing into Quick Hits and other Improvement Projects will require more elaborate planning. 6. A final presentation of results and recommendations will be made to the appropriate CenterPoint Gas Transmission management team

  7. Discoveries & Verbatims to Date • MRT/CEGT have totally different processes for capacity analysis • Need risk management consistency • Difficult to get “ line of sight” on the business on a routine basis, including: • Customer portfolio • Capacity position • Term view of deal flow implications Business Strategy Process • Recreating the wheel for Index of customers • Need customized reports written to alleviate recreating the wheel for FERC Requirement, etc. • “The numbers that make up the monthly capacity could be more transparent” • Our contracts spend too much time in legal, therefore the customer does not have an adequate amount of time to react and execute the contract on their side

  8. Discoveries & Verbatims to Date • Everyone doing everything • Legal Assistant would speed review process on standard contracts • Financial Analyst could help with P&L and accounting issues • Admin support could help with some of the more time consuming repetitive tasks • "I am not sure I have the expertise to be dealing with Credit issues" • "Since there is so much on my plate, I am just good at everything instead of being great" Organization Technology • Multiple points of data entry • No trust in integrity of the data • One point-of-entry would be more efficient and would solve the data integrity issue • Data issue resolved if the data could be synced up between the paper contracts and GIS • Need customized reports written to alleviate recreating the wheel for FERC requirement, etc.

  9. Next Steps Discussion • Treatment of Open Deliverables: • 4. Two workshops are recommended with the participants in the project. • The First one (3-4 hours) will be used to validate the “as is”… • Closely followed by a Second (2 hour) session to define needed improvements. • 5. Identified improvement Discoveries and Verbatims. Summarizing into Quick Hits and other Improvement Projects will require more elaborate planning. • 6. A final presentation of results and recommendations will be made to the appropriate CenterPoint Gas Transmission management team • New: Statistics needed on current and future admin load by type of deal

  10. Updated Flowcharts • Daily Business Process Notes: Updated with Changes from the Contract Rep – H Meeting January 26, 2006 Categorized into swim lanes by functional group/department CNP systems to be added Level II Kristi Malik Qittitut 713-545-6751 713-490-3360 fax

  11. Plan the Deal – Daily Business Process Timeline: 7:30 8:00 8:15-9:30 Assessment of Capacity Prepare monthly capacity posting “Early Bird” Report Gas Control Update discount Request Log as necessary Receive capacity Capacity Meeting w/ Marketing/Gas Control Communicate capacity availability customers Marketing Contract Rep - H Email of Avail Capacity BB Posting Client Services Rep - S EvaluateNeed for Capacity News posting of available capacity Receive Email if “signed up” for email alert To Make the Deal The Customer GIS Email Excel

  12. Make the Deal – Daily Business Process Timeline: 7:30 8:00 8:15-9:30 Gas Control To Execute the Deal Agree on Deal Details Make the Deal Contact CR-H with new contracts via “New Deals”Email Marketing Phone IM Email Contract Rep - H Client Services Rep - S From Plan the Deal Initiate the Deal via Phone Call, Instant Messenger or Email The Customer GIS Email Excel

  13. Execute the Deal - Daily Business Process Timeline: 9:30-11:00 8:15-10:00 Gas Control From Make the Deal To Settle the Deal Complete Daily Trades “Business for” email sent with all daily deal details to CR-H & CSR-S Marketing Approve & Execute Contract Email Marketing Email Posting Set up contract in GIS K# Number generated (status – unfinished) Receive “New Contracts”Email with contracts for daily business Email deal detail to customer Prepare & review TSA Post Deal for other Shippers to see File Contract and Service Request TK Enters points, term volume & rates (PALS) in TK (status – approved) Contract Rep - H Auto email sent communicating contract readiness to Nominate Reviews Deal & Enters Rates (FT & IT) in TK Assist with nominations as necessary Email TSA Email Email Client Services Rep - S Nomination Confirm Email to Generate Service Request Sign and return TSA to CR-H Receive Approved TSA Make nomination The Customer GIS Email Update Contract Status Report Excel

  14. Settle the Deal – Daily Business Process Timeline: … 3:30pm Confirmations for Customer review…. 5:30pm Unsubscribed Capacity for Next Day Aggregate all deals in monthly spreadsheet Review Invoices Identify Discrepancies Marketing Contract Rep - H Resolve discrepancies with Marketing and CSA-H Discrepancies reviewed and resolved by CSR-S Review invoices using EOM spreadsheet, daily email, contracts, etc. Client Services Rep - S From Execute the Deal From Nomination Invoices available for customer review Identify invoice discrepancies Posting Invoices The Customer Post Invoice to Web Confirmations Allocations Daily Confirmations in GIS by System Control updated in ServiceLynx Daily Allocations auto allocate in ServiceLynx Invoices Available for CSR-S Review Unsubscribed Capacity Posted daily to Web (Issue #46) GIS Email Excel

  15. Updated Flowcharts • Long-Term Business Process Updated with Changes from Contract Reps Houston Marketing Houston/St. Louis 3. CNP systems to be analyzed 4. Level II & III Mix • 02.21.2006 • Kristi Malik • Qittitut • 713-545-6751 • 713-490-3360 fax

  16. Develop the Deal – Daily Business Process Timeline: 7:30 8:00 8:15-9:30 Project Begins Prepare estimate for project scope, cost, and timing To Plan the Deal Determine that Capacity is unavailable in current Model Evaluate possible alternative capacity solutions Capacity Analysis Gas Control No Project needed? Yes Communicate project details to customers Negotiate Terms Marketing Contract Rep - H Project Cost Effective Client Services Rep - S Feasibility Study Sign Contract (Precedent Agreement) Request for Capacity No Deal The Customer END GIS Email Excel

  17. Plan the Deal – Long-Term Business Process Assessment of Capacity P1 Monthly meeting to communicate capacity changes, etc. Planning & Engineering P4 P2 Review Capacity postings from prior month Update discount Request Log as necessary Manage needs and requests with Planning & Engineering group To Make the Deal Monitor contracts with shippers and renew/renegotiate as necessary Make required changes to capacity model P3 Marketing Contract Rep - H BB Posting Email of Avail Capacity Client Services Rep - S News posting of available capacity Receive Email if on distribution for email alert To Make the Deal Send Service Request To CR-H (various on-system customers initiate deals in this way) Evaluate Capacity Needs Have contact With CNP Marketer P5 P6 P7 The Customer GIS Email Excel

  18. Make the Deal – Long-Term Business Process Planning & Engineering Negotiate and agree on deal details From Plan the Deal To Execute the Deal Credit Check when necessary (corporate credit) Customer deemed Credit Worthy by Corporate Credit M3 M2 Marketing Phone Email Contract Rep - H Capacity Release Shreveport Office Client Services Rep - S Yes To Execute the Deal Capacity Release? From Plan the Deal Generate formal Service Request and send to CR – H if necessary Negotiate the Deal No M1 M4 P7 The Customer GIS Email Excel

  19. Execute the Deal - Long-Term Business Process Review and Approve CDR Put capacity into model Planning & Engineering From Make the Deal To Settle the Deal Post Capacity for other shippers to see Marketing Approve & Execute Contract Marketing Initial TSA Marketing Set up contract in GIS K# Number generated (status – unfinished) Send CDR to planners Prepare TSA Receive or generate Service Request OR receive marketer approval for request previously generated Posting File Contract, Service Request, etc. Enters parameters in TK to approved status TransactionalPosting Contract Rep - H Auto email sent communicating contract readiness to Nominate Assist with nominations as necessary TSA Client Services Rep - S Review and Approve TSA if necessary for legal to review Nomination TSA Legal Make nomination one-day prior to flow date Sign and return TSA The Customer GIS Email Update Contract Status Report Excel

  20. Settle the Deal – Daily Business Process Aggregate all deals in monthly spreadsheet Review Invoices Identify Discrepancies Marketing Contract Rep - H Resolve discrepancies with Marketing and CSA-H Discrepancies reviewed and resolved by CSR-S Review invoices using EOM spreadsheet, daily email, contracts, etc. Client Services Rep - S From Execute the Deal From Nomination Invoices available for customer review Identify invoice discrepancies Posting Invoices The Customer Post Invoice to Web Confirmations Allocations Daily Confirmations in GIS by System Control updated in ServiceLynx Daily Allocations auto allocate in ServiceLynx Invoices Available for CSR-S Review Unsubscribed Capacity Posted daily to Web (Issue #46) GIS Email Excel

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