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How One Company Used ABM

Fortnightly Magazine - July 15 1997

much of the initial "awareness-building" about the system included PC training.

New software interfaces

Once we had defined the requirements for the company's ABM system users, we began to build the system itself. That included developing a long-range architecture for information technology at AEP. All the PC's within the company were networked together, connecting 150 separate ABM locations (i.e., power plants, regional offices and district offices). That step entailed ABM interfaces with 25 existing software systems.

Interest grew as employees assumed specific, hands-on roles. "People came to feel, 'If I've been assigned this, I'm expected to finish,'" noted Ed Reuf, ABM project director. Reuf added, however, that long-term success for ABM will depend upon keeping "a team together to do future system and process enhancements."

As the project proceeded, communications with users became essential.

"To meet our aggressive schedule, we had to be sure that software testers knew when the developers were going to have things for them to test, and training developers needed to know the system long before it was actually implemented, because trainers had to train over 1500 people in a short time," notes Flemming.

A "train-the-trainer" approach evolved. "This approach worked well. It helped to build a network of over 150 people to support system implementation and function," notes ABM Change Manager Mike Heyeck.

New employee behavior

After two years of work, we implemented ABM in mid-1996. Although ABM is running at the company, work remains to be done. We expect to redesign many of company business processes, work flows and even the nature and content of job assignments as we accumulate data and on-line experience with ABM. However, some employees still must be convinced that the system will help them, which is one reason why we are focusing on employee development. For example, AEP has inaugurated a training course called "Owner of the Business" to give employees a strong working knowledge of how a utility company operates.

ABM also prompted AEP to reevaluate employee compensation programs to tie pay to performance. These efforts, along with new training and reward-and-recognition systems, will reinforce new employee behaviors.

Dave Crabtree, AEP's vice president of marketing services notes that one really critical issue for AEP is determining the profitability of different products and services. Because AEP has been a cost-of-service-based organization it hasn't had the tools to measure either individual profitability, or the profitability of a group, he says.

ABM, however, will enable AEP's marketing staff to look at the time and costs associated with different kinds of activities, and to determine if those activities support marketing objectives as well as corporate goals.

Carl Erikson, AEP's vice president of energy distribution, sees similar benefits for ABM. In the short term, he says, ABM should make the company's budgeting more consistent. In the longer term, it will help integrate planning, budgeting and performance-reporting processes enterprise-wide. t

Henry Fayne is AEP's senior vice president of corporate planning and budgeting. He began his career with AEP in 1974 and was elected to his present position in 1995. Jim Clark is a managing associate with