80-20 helps flow of compliance at Hydro Tasmania

(80-20) Software helps the flow to compliance

2004/06/01 David Crowe – The Australian FINANCIAL REVIEW

When John DeGroot was given the job of managing corporate governance at power utility Hydro Tasmania, there were plenty of business scandals in the press to focus his mind on the problem.

Stories abounded of executives shredding documents and paying lip-service to corporate regulations. Mr DeGroot knew that if he wanted to do his job properly - and protect his own position - he would need a robust system not just to enforce compliance but to monitor it comprehensively.

But to do so, Mr DeGroot would be experimenting with fairly new software that is aimed squarely at compliance, setting it apart from knowledge management, executive information systems and business intelligence applications.

The result is a project to make compliance an essential task for Hydro's top executives. Software is being installed to query each executive about their compliance efforts, track their responses and maintain a database of compliance documents.

The goal is to create a single reference for all compliance information that staff will access with a standard web browser and a simple search function.

"You need to have processes and systems in place that will embed internal controls, that just make it virtually impossible to be non-compliant," Mr DeGroot said.

Because the system is viewed through a web browser, Hydro staff can "surf" to find the regulatory and compliance details they need, such as legislation and compliance manuals.

"If they need to know if a piece of legislation affects them, they can do their own legislative audit," he said. "It's a one-stop shop for compliance. That's something we didn't have before, and it's difficult to set up without a software solution."

But it is not only a matter of checking online documents. Most senior staff have an obligation to track compliance, so the software automatically generates a regular query with a questionnaire for managers.

Mr DeGroot said that could avoid the "tick-and-flick" approach where staff fill out a form without offering any detail.

"Everybody will be touched by it, though the managers will use it more." Of the utility's 860 staff, there are scores who will need access to the system and about 40 who will use it regularly.

Adding urgency to the project is the introduction of regulatory changes at Hydro, which manages more than 50 dams and generates 60per cent of Australia's renewable energy.

Previously a state industry regulator as well as an operator, Hydro has been restructured as a power generator and has a new set of industry and government rules to abide by.

It is also planning to join the national electricity market in May next year, which means setting up an electricity trading desk and trading derivatives to control risk.

That, in turn, means getting a financial services licence and being compliant with Australian standards that cover strategy, operations and maintenance.

"We're now subject to the same rules and regulations as the rest of the business community," Mr DeGroot said. "That's a different mindset from the past."

Hydro chose the new compliance software in February. Mr DeGroot reviewed about six applications and recommended Leaders Online from local developer 80-20 Software. The budget runs to tens of thousands of dollars and the implementation is being paced fairly slowly.

Key features required included the ability for questionnaires to be "self-testing" so executives could send compliance updates easily. Other features listed by Mr DeGroot included internal controls, audit compliance and automatic notification when key regulatory dates were looming.

Another feature was that the software was easy to manage without intervention by programmers to make changes.

Most importantly, Mr DeGroot said, the software was relatively easy to use and made it as fast and simple as possible for executives to report and monitor compliance.

"We'd hope to have it out by the end of the year," Mr DeGroot said. "By the time we go into the national market it'll certainly be something that people are familiar with."

© This article has been reproduced with the permission of the Australian Financial Review.

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See Also :
Hydro Tasmania Strengthens Corporate Governance and Compliance with 80-20 Leaders Online