Asset Management Software Implementation Challenges for Electricity Companies Taivo Kangilaski Tallinn University of Technology, Department of Computer Control, Ehitajate tee 5, Tallinn, Estonia Taivo.Kangilaski@dcc.ttu.ee Abstract- Electricity markets across Europe have changed significantly over the last years as market liberalization, changing power generation dynamics, privatization and structural change have replaced the state in which European energy was before. The European Commission expects that the internal European Market should run as one market without restrictions on the individual borders. The change continues with ongoing moves for further market liberalization and competition with a number of major European energy businesses. To be ready for such alternation, businesses need to redesign their existing business processes using ICT solutions as an important enabling factor. Current article analyzes the main challenges of implementation phase of Asset Management software. The challenges are analyzed in example of Estonian power utility Eesti Energia locating in Republic of Estonia, which Distribution and Transmission Network companies are currently implementing Asset Management software within project called VHT. The project’s 1 st phase go live date is the 1 st of June, 2009. I. INTRODUCTION To compete successfully in today’s energy market, organizations need concurrently to manage effectively and efficiently the design, manufacturing, distribution, service and recycling activities of their products and services to their customers. Companies are looking for the solution in order to reduce the working capital within their supply chain. Velocity, visibility, scalability, innovation and cost govern competitive advantage for organizations viewing the entire world as their market. This demands for a more intelligent way of working, which has determined the need to digitize their processes. Businesses are more dependent on ICT systems, what means that ICT requirements transformed from business requirements must be handled in more contemporary way. Otherwise an ICT will function as a bottleneck restraining needed business changes. The results presented in current article are identified basing on company Eesti Energia AS (EE) [1] locating in Republic of Estonia, which is a state-owned company engaged in the production, sale, and transmission of electric and thermal power. The main raw material for energy production – oil shale – is extracted from mines owned by the company. Eesti Energia is also involved in the construction and maintenance of energy systems. Last year, EE Distribution Network Company and EE Transmission Network Company restarted their asset management software renovation project with go-live date of its 1 st phase on the 1 st of June, 2009. The author of the current article is related to the VHT project as project manager. VHT project implementation is presumption for several others EE projects such as Meter Data Management, Customer Care and Billing system renovation projects [2] to prepare for market liberalization in Estonia. The current article is structured as follows: the II paragraph will focus on VHT project main implementation challenges and III paragraph describes one set of solutions for these challenges. II. CHALLENGES Very broadly, the VHT project implementation phase challenges could be divided into the four groups: external influences, organizational challenges, processes challenges and challenges related to data and legacy systems. A. External influences The sovereign external influence is related to electricity market liberalization. In theory, industries and private households are able to freely choose their energy supplier according to EU directives in 2004 and 2007. Though the discussion in September 2007 have focused on the third legislative package published by the European Commission, not all issues had solution – including electricity trading market development, market coupling, lack of access to infrastructure, lack of or delayed investment, lack of market transparency that is preventing new entrants from assessing the scope for profitable entry, security of supply, supply competition, different forms of unbundling, tariff design, charging methodology, renewable energy and the environment – so a single European energy market is still far from reality. The EU Commission’s 'third energy package' provides two options for the businesses in Member States in order to separate gas and electricity production from supply provision. These options are ownership unbundling and Independent System Operator (ISO). The EU Commission's preferred option is that companies controlling both energy generation and transmission would be obliged to sell part of their assets. Investors would be able to keep their participation in the dismantled groups via a system of 'share-splitting', whereby two new shares are offered for each existing share. The ISO option is a compromise whereby businesses involved in energy production and supply would be allowed to retain their network assets, but would lose control over the 978-1-4244-4649-0/09/$25.00 ｩ2009 IEEE 3575