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SOA generates savings for hydroelectric company in China

A three-year project to integrate legacy systems and provide unified data via a Web portal reduces costs and speeds construction of dams that will provide power for the booming Chinese economy.

For Ertan Hydropower Development Company, Ltd. (EHDC), which builds and operates electric generating dams along the Yalong River in Sichuan Province of China., service-oriented architecture may be a life saver, literally.

 Procurement costs have been reduced by an estimated 10 percent through a better bidding procedure and information sharing on the bids.
 Report on Ertan Hydropower Yalong River project
 Quintel Consulting Group

Before an SOA implementation began providing data for decision making, company managers spent half their time traveling up and down the almost 1,000 mile length of the Yalong River through the mountainous southwest China. These journeys were not only time consuming and expensive, but also dangerous especially during times of the year when the river is in flood.

Harrowing as these trips were, they were the only way managers could check on the status of the construction of 20 hydro electric power plants EHDC is building in a 15-year project to support China's growing economy, explained Charney Hoffman. He is a senior architect for Cordys, a Netherlands-based software provider, which led a three-year SOA implementation for EHDC.

Prior to the SOA implementation, EHDC "had too many interfaces, too little information sharing and no streamlined and clear decision process, thus lacking strategic flexibility," according to a report on the project by the Quintel Consulting Group, an independent consulting firm which Cordy's hired to review its work.

The three-year SOA project included integrating the various legacy systems with an enterprise service bus (ESB) that now provides managers with data on dam performance and even the volume of water flowing in the river, Hoffman said. With only one of 20 planned dams completed, a business process management (BPM) layer provides information on status of construction of new dams so managers and executives can make decisions on procurement of materials.

A Web portal provides a single unified view of data regardless of the originating legacy system. EHDC managers can read the data displayed in Chinese characters on computer screens or PDAs.

Asked if creating user interfaces in Chinese was a problem, Hoffman noted that since Netherlands-based Cordys is a global company doing business throughout Europe and the United States, as well as China, support for native languages is not an unusual requirement.

"Not too many people in the world speak Dutch," he quipped.

In a quote translated from Chinese by Cordys, Qiang Zhou, CIO of EHDC highlighted the decision making capabilities of the SOA implementation: "As an organization, we are now able to make better informed decisions more quickly and improve data analysis as a direct result of the increase in the quality, accuracy, availability and accessibility of information."

The Quintel report provides data on the executive decision making. Something as simple as implementing electronic signatures and authorizations can make a large difference, according to the report.

The CEO, CFO and vice general manager Finance have to make 15-20 decisions per year involving expenditures of between $6 and 12 million per decision, the report states. "Electronic authorization has increased the speed of decision making in some areas by more than 50 percent."

"Electronic signatures have been in use since 2005 for many of the key decision making processes," Quintel reported "The general managers have to sign around 500 documents per year. Before Cordys (SOA implementation) it took three-to-four weeks on average to obtain written signatures, especially when multiple signatures where required. The new system enables this process to be completed within a week."

Overall Quintel reported a 50 percent improvement in the availability, accuracy and presentation of information.

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With the SOA platform in place, the report said: "Procurement costs have been reduced by an estimated 10 percent through a better bidding procedure and information sharing on the bids."

The SOA implementation also received some credit for completion of construction for the first hydro-electric dam nine months ahead of schedule.

Lengthy, expensive and risky travel, which once took an estimated 50 percent of management's time, has also been reduced, according to Quintel.

"Electronic communication and electronic business process workflows that can be handled via video, laptop, PDA or mobile phone reduce the need for traveling and make more frequent interaction possible," the consultant's report said. While no dollar figure was estimated for this, the report noted that the reduction in travel "reduces the risk to employees."

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