BACKGROUND: DTE Energy Company is a family of growth-oriented businesses pre-eminent in providing energy solutions for customers. Detroit Edison is the largest subsidiary and the seventh largest utility in the U.S. with 10,700 megawatts of generating capacity and serving over two million customers in southeastern Michigan. Detroit Edison realized it need to acquire an in-depth understanding of the true nature of our costs and joined with PeopleSoft to test the new Enterprise Performance Management (EPM) product.

PLATFORMS: HP server running HP-UNIX version 10.2 on an Oracle database version 8.03.

PROBLEM SOLVED: Historically, the electric utility industry has not had detailed cost management information to use in making tactical and strategic decisions. Their systems were designed for a regulated environment and did not support activity costs and profitability by product, service and customer. Activity Based Costing, Multidimensional Profitability Analysis and Performance Scorecards are popular analytic applications that will allow utilities to understand their costs, profits and overall organizational performance to increase customer satisfaction, optimize return on investments, effectively manage risk, maximize profitability and reduce organizational costs.

PRODUCT FUNCTIONALITY: Currently, we are utilizing the Activity Based Costing and Multidimensional Profitability modules that were released with version 7.5. The software allows us to:

  • Calculate monthly process costs by generating unit to quantify which processes had the greatest impact on profitability and to identify differences in operating efficiency and costs between similarly designed units.
  • Examine process costs between similar units within a plant and across plants to identify cost improvement opportunities as well as to facilitate best practices through knowledge transfer.
  • Identify the products and services provided by the human resources organization to the operating business units. Quantify usage and costs to support assignment of costs to consuming organizations.
  • Identify major products and services within the transmission and distribution service across service centers including differences between underground and overhead new service installations; differences between design and planning costs in various processes; and cost of line clearance per mile.

STRENGTHS: The strengths of the Enterprise Performance Management software are:

  • Integration with PeopleSoft Financials and Human Resources Management applications;
  • Integration with other OLTP and legacy applications using the Informatica ETL tool;
  • Ledger mapping, model chaining and implicit driver capabilities of the ABM engine; and
  • Enterprise-wide reporting using Actuate, Essbase, Cognos, Crystal Reports and nVision.

WEAKNESSES: Because this is the initial release, PeopleSoft developers need to gain a better understanding of market needs and component integration. As one of the first implementation sites, Detroit Edison is "blazing the trail" for documentation, implementation methodology and understanding of features and functionality.

  • Integration with existing PeopleSoft and legacy data sources.
  • Support for product, service and customer costing; continuous improvement initiatives; shared services costing; and a total enterprise perspective.
  • Enterprise-wide reporting capability.


  • Activity-based cost models for power generation facilities and customer service.
  • Customer, products/service and process profitability reporting delivered enterprise-wide to the desktop.
  • Customer, product/service and process contribution reports.

VENDOR SUPPORT: Support from PeopleSoft, both during the beta testing and GA implementation, has been good. We have an open line of communication to the development team for continued feedback.

DOCUMENTATION: Documentation is very thorough and understandable but is a reference, not a "how to implement" guide. It would not be possible to create and run a model relying solely upon the documentation.

Register or login for access to this item and much more

All Information Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access