Debt Management

WALKING THE TIGHTROPE BETWEEN PAST AND FUTURE

A large federal utility’s outdated system for managing their $13 billion debt portfolio no longer had the comprehensive analytics to adequately evaluate the portfolio.
This placed them at risk of not being able to produce the necessary input for the revenue requirement (which is agency critical), nor adequately forecast, assess and measure financial scenarios.

The utility came to us for help developing new software that would replicate (at a minimum) their existing debt management and also provide repayment model scenarios. So far, so good.

Then the other shoe dropped.

We discovered that no one at the utility knew how to maintain or support the existing system. In fact, there were only a handful of people in the entire country who knew the programming language. We had to find someone who could translate and rewrite it into a new language that could be supported internally. Not exactly something you find on Google.

That was hurdle #1.

Hurdle #2 was carefully navigating through a variety of issues without generating any hard feelings. As with anything this important, noses had the potential to get seriously out of joint.

Sensitivity and tact: mission critical.

Working our way through a potential minefield of different viewpoints, we documented critical business requirements and identified impacted utility processes. We listened closely and let people express their opinions. Then, we helped them see facts for what they were, and soon people from all sides became active supporters.

Yes, candor and honesty can work wonders.

For the debt management part of the project, we led the evaluation of viable off-the-shelf software providers from a technical, cultural and long-term partnership perspective.
For the repayment model, a custom solution was needed. We found the needle in the haystack – someone who could transform the old program into a new language, and design and build a custom application, including GUI, backend algorithms and various financial calculations. Then we helped test, refine and implement all the new software.

The utility is now using the new software to perform needed functions as well as new tasks that were not possible with their old system. The new system also provides a real-time “what-if” capability to understand the full impact of potential debt management actions.

The key to the project’s success?

Facilitating constant communication with all stakeholders (sharing the good news as well as the bad). Finding the right balance between being a member of the client team and being a candid, independent voice of reason – and keeping people focused on desired outcomes.