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The CIO Forum: IT Weathers the Storm

In the rough-and-tumble energy biz, IT departments are paddling hard to stay afloat.
Fortnightly Magazine - November 1 2002

a high degree of business knowledge. The more generic the application, the less customized it is. I don't know, to be honest with you, whether we are ultimately going to be the low-cost provider.

Steady as She Goes: Duke Aims to Keep Up Morale

An interview with Cecil Smith, senior vice president, information management, Duke Energy

In the last year, what were your big accomplishments and what were your disappointments?

We did spend a lot of effort, and therefore dollars, on security last year, with a series of projects. We continued to put "add-ons" to our financial ERP [enterprise resource planning], which was certainly helpful. We have continued to really highly utilize our information portal, which has information-not only news release-type information, but also benefit information, HR self-service information, all those kinds of things. . .

Additionally, we spent an awful lot-this is sort of the good side and the bad side-we spent an awful lot of money and effort around trading systems and risk management systems. Then that market for us has gone to a shambles, starting with Enron, and everything else that has taken place. We are still finishing up those investments, because still we fundamentally believe that the merchant energy market will come back. The real question for us is a matter of timing. We're not investing at quite the same clip rate as we were doing in the earlier part of the year, in that arena, but we are still investing, because we've got to finish those pieces of work.

How long were you working on some of these projects?

The risk management and trading systems have probably been as long as investments as we have probably had. [I]n our electric business line, we have completed a customer billing and information system. That was a six-phased re-engineering of a system that we have turned in the last few years back to Duke Power Co. It's been highly successful, and certainly needed, but what was key on that was really to turn out a phased deliverable that was important to that customer every six to nine months. We do not like big-bang conversions, because just too many times, your risk factor goes up. We always prefer the phased implementation, where you can start getting value as quickly as possible, and then like with anything, you continue to enhance it in subsequent and additional phases. That's part of the reason that we, like others, were named to the CIO 100. It was based upon our integration activity, things like our customer billing and information system, things like we were doing with integrating our acquisition of West Coast Energy in Canada, those kind of things. Another aspect of that is that we've changed-starting at the beginning of 2001-we've changed our total IT governance model, and that has worked well for us.

[T]he big change [has been] that we really are operating something called an information technology management team-ITMT. That has either the IT director or IT officer from each major business subsidiary, and we meet monthly, not only to agree upon