Mr. Richard Culhane
Senior Director, Human Resources & Administration
California Power Exchange Corporation
1000 South Freemont Street
Building A9
Alhambra, California 91803 4737
Dear Richard,
Thanks again for your advice. Finding the best and right way to shape a
sustainable value-driven relationship in these times of urgency and change is a
substantial challenge. Your insight regarding the PX's priorities and how Perot
Systems Corporation may best match its experience and talents in meeting these
needs are considered invaluable.
We are excited about the possibility of PSC participating in designing the
processes, which will drive the customer's perception of the PX's service
quality. We possess the talent to deliver the desired results and, look forward
to taking this next step in building our relationship.
Enclosed for your review is a brief overview of our capabilities, including a
description of our approach and profiles of PSC associates we would engage. I
have deliberately kept the attachments to a minimum but, can provide summaries
of completed initiatives and references.
The proposed team combines talents from Jim Champy's business process consulting
group with industry domain experts. These are persons who can lay claim to
possessing the experience of already having done similar work and can thus
ensure [we hit] our hitting the ground running to advise the PX on what must be
done to deliver success. Hemant Lall and Paul Gribik, the industry domain
experts, have had extensive experience in both gas /electricity trading and
market restructuring. Jack Calhoun, aside from his extensive reengineering
expertise, is also one of PSC's lead designers in the creation of concepts
guiding the development of digital trading markets. Susan Howard, in addition to
having spent considerable time working with Swiss Bank and the financial
services markets, was also a lead designer of PSC's concepts and architecture
for our customer management strategic service offerings. This team's combination
of energy and financial services market experience is unique.
I'm faxing this document on to you for your review. I will be in California the
early part of this week and in our Alhambra offices on Wednesday. I'll contact
your offices to check on status and answer any questions you may have regarding
these materials.
We are looking forward to working with you.
Sincerely,
Ed Smith
Perot Systems Business Consulting Engagement Summary
Background The Business Consulting unit of Perot Systems
Corporation (PSC) has been practicing and
implementing the core principles of Business Process
Reengineering since its inception in the early
1990's.
Led by Jim Champy, well-known author of Business
Process Reengineering, Reengineering Management and
Fast Forward and developer of BPR, the group has
developed effective techniques to enable businesses
achieve economic value through rapid business process
redesign. Our view is that a process is a set of
activities that delivers value to customers and that
each business is a collection of processes. We use a
holistic approach to identify areas for dramatic
improvement, target quick hits for immediate
financial payback and deliver results, developed on a
strong customer-focused foundation.
We implement what we call Rapid Reengineering - which
is not synonymous with slash and bum tactics,
downsizing and other negative connotations that the
term reengineering sometimes brings to mind. We
believe that in most companies, the gap between of
what is and the potential business performance is
enormous.
We help our clients achieve breakthrough improvements
in business performance. Through an initial
engagement we use unique, proven techniques to
dramatically improve the pace for:
* building alignment with a focus on service
excellence,
* implementing process, systems and organizational
change,
* creating an environment with much higher levels of
clarity and commitment to achieving business
goals, and
* building more effective collaboration between IT
and business by maximizing utilization of
management, human and technology assets.
Following is a short overview of highlights from a
typical engagement, including the Performance Driven
Redesign Workshop, and staff profiles for the initial
engagement. We welcome the opportunity to meet with
you to discuss more about our approach, share our
references, and develop a plan to successfully enable
you for the customer-focused challenges the Energy
industry is demanding.
The Initial Engagement A fast paced, practical approach is essential to the
success of any project. Moving rapidly to capitalize
on organization momentum, we will create a workable
project plan and template for analysis that will
create lasting value for the California Power
Exchange. We will:
* analyze and evaluate the customer value-driven
processes planned for and within the context of
California Power Exchange's business,
* establish metrics for stretch objectives in
closing the gap between planned processes and
ideal performance, and
* identify and implement quick hits for immediate
payback.
Central to this rapid assessment process is the
development of a "common process" model. This model
represents California Power Exchange from the value
chain perspective and delineates within the model
process families that create value for your
customers. Rather than view your business from a
hierarchical view, using the common process model
approach allows a new perspective on process value
and a point from which the analysis of process value
can begin.
Analysis typically reveals three categories that
enable a focused approach: 1) strategic or
"identity" processes that create competitive
advantage for the company; and, 2) "bad fit
processes where a mismatch between current and
recommended practices will have material impact on
the business.
Performance Driven Analysis of the current processes is only a starting
Redesign Workshop point. PSC's unique Performance Driven Redesign
(PDR) Workshop will create a workable project plan,
a project budget and an aligned team of stakeholders
committed to results.
Following the process analysis step, a workshop is
held for key stakeholders and the appropriate cross
section of the business partners, including
representatives from your [the] customer segments.
Beginning with a "Case For Action" presented by the
sponsor, the carefully-scripted workshop agenda
establishes those areas of the assessment that
require decisions and present the attendees with an
appropriate set of exercises for reaching those
decisions.
These exercises are facilitated by process and
technology consultants and produce the environment
for critical thinking and teamwork necessary to
create innovative and meaningful solutions to
California Power Exchange's most important business
issues.
Participants of the PDR workshop will emerge with:
* an understanding of strategic goals for the short
and medium term,
* an analytical frame for subsequent analysis,
* a preliminary project plan and project budget, and
* an aligned, cross sectional team charged with
ownership for business results.
Summary We believe that a phased approach that builds
momentum with quick wins and understands the value of
business rewards is essential to succeed. Our
approach will focus your company on business results,
set clear ownership guidelines for the subsequent
project phases and establishes clear metrics for
business and systems performance. PSC's Business
Consulting Group helps its clients get closer to
their customers, partner in building new forms of
business, and apply technology strategically. This is
achieved through an integrated services approach that
is aligned to each client's goals. PSC has a strong
implementation and service orientation. We implement
what we recommend and support what we implement. This
approach promotes a commitment to excellence that
advisory services cannot.