Business Intelligence
Sunoco Success Story
BUSINESS CHALLENGE
Sunoco's retail marketing business unit faced fraud losses in the tens of millions of dollars each year. Much of this fraud was conducted through credit card usage including dishonest card members, stolen credit cards, and counterfeit credit cards.- Data was stored in flat files on a mainframe with difficult terminal access only
- With no business intelligence or data warehouse solution, primary data was unstructured, difficult to manipulate and almost impossible to share
- Not only were Sunoco executives and management unable to see clear reports of fraud, but they also could not audit credit card distributors' data
- Data and information scarcity made it difficult to pinpoint sources of fraud and prevented Sunoco from framing an adequate response
ROLE OF US-ANALYTICS
Sunoco needed a business partner that could help restructure data and develop reporting to track the specific indicators of fraud. US-Analytics' solution gave Sunoco the ability to produce ad-hoc reporting to identify stores, departments, activities and trends with higher rates of fraud. With user-friendly interfaces and dashboard reporting tools, the solution was both nimble and secure, making it easier for Sunoco to analyze data. To address Sunoco's needs, US-Analytics:- Established ETL protocols to maintain data integrity
- Processed data from a wide variety of sources
- Created multi-dimensional analyses of data
- Developed and deployed reports with simplified access for Sunoco management
- Mentored Sunoco personnel to ensure both understanding and an ability to generate reports from additional sources as necessary
BENEFITS
- Improved data accessibility
- Detailed reporting that is easily navigated
- Increased understanding of additional metrics from credit card processors
- Improved efficiency with streamlined data management
- Secure detection system leading toward an attainable goal of 10 percent annual fraud reduction
- Ability to leverage incident-specific data against credit card processors or under-performing store owners
US-Analytics' seasoned professional consultants resolved a wide range of strategic, tactical and technology issues to deliver a value-added solution and give Sunoco a focused, competitive advantage.
Rate Case Success Story
THE CLIENT
One of America's largest natural gas distributors, with operations in 12 states from the Rockies to the Blue Ridge Mountains, including Texas.
THE REGULATORY ENVIRONMENT
Through its Gas Utilities and LP-Gas Divisions, the Texas Railroad Commission oversees 222 private natural gas utilities and 364 natural gas pipelines. The commission oversees safety and has appellate jurisdiction over rates set by 84 public and municipally owned gas utilities.
THE RATE CASE
While the regulatory situation varies state by state, all U.S. states have jurisdictional reporting and filing requirements. One of the primary regulatory functions across all states is the approval of gas rates paid by customers - corporate, industrial, commercial, or consumer.
The rates for gas usage volumes follow an approval process and utilities are required to present rate cases to utility commissions in each state of operation. Certain costs are considered allowable and others and not. Rate cases are subject to negotiation and the utilities need the ability to make adjustments to their cost data from any line item such as property, plant and equipment (PP&E), or to specific expense line items.
THE REQUIREMENT
The ability to make cost adjustments in any period of time, to any relevant cost, and re-process the model in a timely manner, with all the necessary levels of details, is invaluable to a utility during rate case submittal and negotiation.
STANDARD APPROACH NOT EFFECTIVE
Before US-Analytics engaged with this utility, the standard method for rate case development was through a large collection of linked and unlinked Excel models. A full view of the rate case was impractical as the assumptions, calculations, and details for a rate case are extensive.
The process of "walking forward" a rate case included actual costs from the company's Oracle G/L, followed by the application of a large number of complex allocations, then a wide range of recurring and one-time adjustments and projections.
The level of detail and the number of exceptions in rate cases can vary across regulating state commissions, in addition to varying across organization levels, periods of time, and rate application methodology.
OLD DESIGN = PERFORMANCE PROBLEMS
Before US-Analytics engaged with this utility, the Essbase model provided only general ledger actual costs. Any revisions to rate case data (adjustments) were managed separately, in Excel. The solution was designed using a dated and incomplete method. A lack of advanced Essbase expertise in design, tuning and optimization prevented the original implementation from delivering the full set of project requirements.
Any cost data modification of the old Essbase model required 36 hours to process and recalculate. This meant that the solution was incapable of satisfying the business requirements, requiring the utility to adhere to the limitations of their spreadsheet-based manual data entry "exercises" every time a rate case filing was due. Such exercises were maintenance-intensive, error-prone, insecure, and time-consuming.
THE NEW PARADIGM
An entirely new approach was need for the utility to accurately and rapidly:- Prepare rate cases for filing and jurisdictional reporting
- Perform monthly or periodic forecast revisions
- Produce annual budgets
- Perform better business analysis
US-Analytics' unique combination of broad business knowledge and seasoned Oracle|Hyperion expertise delivered a unique solution to a common challenge in regulated industries. This groundbreaking solution delivers value and performance to the business while easing maintenance requirements.
No longer limited to just an actuals-only reporting system, the utility has a full walk-forward multiple-scenario, rate case solution. The company can now make all of the necessary allocations, recurring and non-recurring adjustments, and the projections needed to rapidly prepare rate cases.
The model accommodates all of the disparate filing and costly requirements across a dozen jurisdictions. The model accommodates multiple cost-averaging methodologies, since different states sometimes require different methods. And the model accommodates "what if" cost and revenue scenarios.
By dynamically calculating revisions for a rate case in seconds or minutes, in contrast to the 36 hours required to simply recalculate the previous actuals-only solution, this utility has improved its operational performance and reporting capabilities allowing it to quickly and efficiently respond to changing market and regulatory demands.
SUMMARY
- Rate case development is crucial for every regulated utility
- Rate case development requires flexibility and speed in making a wide range
- of adjustments The traditional methods of solving rate case development will not perform
- satisfactorily and will constrain functionality (levels of detail, "what if" scenarios, multiple methods of calculation, jurisdictional differences) Solving complex modeling problems like rate case scenarios demands a sophisticated understanding of the utility business and an advanced understanding of the proper technology