Digital transformation case study

Setting the scene

Few industries in Canada face the kind of scrutiny experienced by utility companies, whether from customers, shareholders or regulators. Toronto Hydro delivers electricity to 772,000 customers in the city of Toronto and distributes about 19% of the electricity consumed in the province of Ontario. Today, the utility must adapt to increasingly complex legislative, regulatory and operational requirements.

Client challenges

Toronto Hydro’s enterprise resource planning (ERP) system, implemented in 2002, had become obsolete. Although it had been updated with additional applications over the years, the IT framework had become heavy and expensive. The system struggled to keep up with evolving regulatory, operational and customer demands. Business operations and efficiency were suffering. What’s more, one by one, vendors had stopped supporting the ERP and other legacy systems, which raised cybersecurity risks. The organization has also undertaken a demanding capital renewal program.

Approach

The project followed PwC’s Transformation methodology. We combined business understanding with technology innovation and human insight to solve Toronto Hydro’s important problems. First, we reviewed the current systems. Then, in a series of workshops with the client, we jointly developed a vision and roadmap for the program inclusive of user experience, process standardization and change management. Built on SAP’s core ERP solution as well as supporting technologies such as Ariba, Success Factors and Work Manager, the program covered a broad scope of business capabilities. System design was based on a blend of utility industry leading practices and standard SAP functionality.

In the implementation phase, PwC Canada applied its iterative prototyping approach to build, validate and adjust the new systems. A rigorous testing program, including payroll validation runs, was carried out at the same time as end-user training. As required, Toronto Hydro-specific capabilities or integration points were developed by local and off-shore resources directly connected to the core team and aligned from a process flow and project execution perspective.

As the prime delivery partner, we were responsible for project management, process design, solution design and recommendation, SAP functional design and configuration, master data migration, test leadership, organizational change management and sustainment, training content development and management of the technical infrastructure.

The new SAP-centric platform replaces Toronto Hydro’s old ERP system as well as 30 legacy systems previously deployed as point solutions. It is being deployed across all operations to a user base of 1,400 staff and contractors. The business scope includes financial processes, procurement, sales and distribution functions, human capital management and asset management.

Engagement impact

Toronto Hydro decommissioned its legacy systems and replaced them with a single SAP-centric platform. The incremental functionality required by these processes was incorporated at the design phase, resulting in cost savings, cost avoidance and process improvements. Costs related to supporting legacy systems and addressing functional obsolescence have been eliminated. The new SAP environment provides enhanced integration across Toronto Hydro’s business, increases transparency and eliminates certain tasks and activities while reducing the time required to perform others. Toronto Hydro’s IT system is now more reliable, more secure and able to respond to complex and evolving requirements and demands.

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