National Grid 2010 Annual Report Download - page 15

National Grid Gas plc Annual Report and Accounts 2009/10 13
The vast majority of this relates to the long-term main
replacement programme agreed with the Health and Safety
Executive (HSE).
The increase in other capital expenditure in 2009/10 compared
with 2008/09 is driven by: the spend on the replacement of Gas
Distribution front office systems, work that will continue until
2011/12; completion of a major new pipeline in west London;
and expenditure primarily to maintain the reliability of our gas
networks.
Gas Metering
Capital expenditure invested in new and replacement meters in
2009/10 amounted to £65 million compared with £90 million in
2008/09.
In the UK, we have identified significant capital requirements
over the medium term. These requirements are primarily driven
by the need to replace ageing infrastructure, reinforce the
network to accommodate changing sources of supply and
connect new generation, including renewables.
Becoming more efficient by transforming our
operating model and increasingly aligning our
processes
We aim to work as one company, operating to common core
principles, standards and policies to deliver National Grid’s
vision.
In Transmission, our common operating model project is
developing a plan to prepare us for the challenges and
opportunities between now and 2020. In Gas Distribution, our
front office systems project aims to provide the tools to improve
our performance, making them simpler to use and apply to
improve our service to customers.
Business process outsourcing
National Grid announced on 8 October 2009 that, following an
extensive review, we proposed to outsource some of our UK
shared services activities to an external service provider. The
outsourcing is expected to deliver significant benefits, process
efficiencies and continuous improvement over a five year
period. It will result in a reduction of around 300 agency and
permanent positions and the closure of our Newcastle site. The
phased transfer of activities has begun and is expected to
continue throughout 2010.
Across National Grid operations, there are global functions,
such as information systems and procurement which provide a
common strategy, policy and key processes to drive
consistency, efficiency and effectiveness. Further information
can be found in the National Grid plc Annual Report and
Accounts 2009/10.
Gas Transmission
Much of the focus for Transmission has been on preparing for
the significant increase in capital investment that is expected in
future years, including developing the longer term investment
plan.
We have continued to focus on incremental efficiencies and are
committed to further improving the levels of efficiency in our
operations. This is how we will reduce controllable costs on an
enduring basis contributing to an improved financial
performance.
Gas Distribution
Our objective is to utilise the benefits of common support
services to drive improvements in our operating and financial
performance. In particular, we aim to adopt best practices
across Gas Distribution.
The key initiatives aimed at reducing our controllable operating
costs and improving efficiency are material and process
standardisation, process improvements, consolidation of
workforce and best practice sharing.
We are making good progress on our implementation of a new
front office system for Gas Distribution in the UK. The first
release of the new integrated IT solution is on track for
implementation in the autumn of this year and will cover the
maintenance and an early release of the emergency service
solution. The full deployment of the emergency service solution
will take place in the spring of 2011. We have also started the
designs for the customer, repair and construction processes
and will deploy these parts of the new solution during the
summer and autumn of 2011.
The new enhanced capability will create a much simpler way for
our people to do their work, enabling us to streamline our
processes and standardise the way common functions like
scheduling and dispatch are performed. This will improve
productivity, provide greater assurance and controls on our
performance and significantly improve our customer service.
The functionality of the new systems, which includes global
positioning system (GPS) locations of our field teams and work
locations, will drive improvements in efficiency. We will also
have much greater visibility of work we undertake for customers
and be able to provide improved response to requests to do
work and customer enquiries about work in progress.
Our aim is to maintain the proper level of investment in our
infrastructure to enable related operating cost reductions.
Building trust, transparency and an inclusive and
engaged workforce
To better recruit, retain and develop talented people, we
endeavour to engage our employees and to achieve a more
inclusive workplace and diverse workforce, reflecting the
composition of the communities in which we operate. Our goal
is to be seen as an employer of choice across all communities.
Employee engagement
In February 2010, National Grid conducted its third annual
employee survey. The response rate was the highest so far,
representing 97% of National Grid’s workforce.
Action plans are being developed and will form part of the
management annual objective process for 2010/11 to ensure