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Enron Mail |
Dear Mike,
A lot of the needs listed in Tim's memo will also be needed in NY, but on a smaller scale. I'll put a resource requirement memo together by the end of the week and then we can determine who would fit these requirements and where these people should come from (London/Houston). I think this project would be a great opportunity for some analysts/associates (of course working under experienced personnel). Regards Shona Mike Jordan@ECT 08/14/2000 02:56 AM To: Tim Poullain-Patterson/LON/ECT@ECT cc: Richard Sage/LON/ECT@ECT, Fernley Dyson/LON/ECT@ECT, Andrew Cornfield/LON/ECT@ECT, Shona Wilson/NA/Enron@Enron Subject: Re: MG Integration : Resource Requirements A good tee up - and one we should regularly reassess - here goes some initial feedback which you should push back on :- Valuation review - resource requirement to be defined in detail by Andy in his new role - I think the offer from Eric of finding some Analysts and Associates for the short term assessment may be the immediate answer. Balance Sheet substantiation - at present I assess the power and gas substantiation process as priority - although we should review the resources coming free from Global ( Chris and Rashpal ) as they may not be easily useable by Raewyn - Chris is free at present and Rashpal promised for Thunderball. Whilst I am as concerned as you are we should reassess level of risk because AA would have done ( could do more ? ) some substantive / due diligence on balance sheet The trade accountants at MG had a simplistic entity structure based around an infrastructure where the AS400 did both the DPR and account posting - unlike our own systems - so inherent risk is lower ( excluding inventory ) we must make certain our efforts are aligned to Fin Ops ! Inventory - interesting one this - it should be very accurately controlled already ( it is the business ??? ) yet the problem is that it is not transparent at the consolidation level. I would like you to get David Tregar to assess the level of risk with you ( and discuss with me and Philip Lord the current securitisation of inventory ) before we put an action plan in place for this balance sheet category Integration / Controls - you should continue your efforts to bring the MG priority to the functional stripe leaders' agenda - after Friday's meeting they know the effort required are that recruitment is key SAP - we will look to Michael Heap on this ( but we did identify some key business analysis work for Kevin Rhodes to be done ASAP - we should track this ) Remote offices - continues to be the dog that has not barked ( YET ) - Richard, you and I need to rethink where we are - particularly with South America Overall - we both agree more resources are required but they have to be scoped quite precisely ! Thanks for the note Tim Poullain-Patterson 11/08/2000 18:59 To: Mike Jordan/LON/ECT@ECT cc: Subject: MG Integration : Resource Requirements Mike, As you know we still have a very full issues list and we are spreading the few resources we have on ground pretty thinly, leaving a residue of partially completed tasks that will need to be revisited at some point. Also, though we are leveraging MG staff where we can, we have already made an assessment that their support infrastructure is very lean - this is being stretched to breaking point by the RW acquisition and various Enron integration initiatives, e.g. establishing functional teams. At present we have the following resources on the ground: We are continuing to identify issues that add to our assessment of operational risk. If we are to reduce this risk to an acceptable level we need to commit additional resources to the project. I assess our current resource needs as follows: Valuation Review : the valuation review that Andy and I performed prior to "effective control" date identified a number of complex valuation issues that require further quantitative analysis. Also, there is imbedded optionality in a lot of the physical business transacted throughout MG which should be modelled to determine the correct valuation and accounting treatment (and if there is any extra value to be extracted - Eric Gadd has recently prioritised this!). Requirement - risk manager with developed quantitative/modelling skills. Balance Sheet Substantiation : a comprehensive validation of balances including a review of reconciliation's, evidence of account ownership (detection of "88888"'s accounts etc...) is overdue. Requirement - lead accountant plus two juniors. Inventory : a lot more analysis is required of the global inventory balances - see earlier note to Eric Gadd. Requirement - one/two risk manager(s). General Integration : having now identified the functional leads for MG in London, we are now due to involve the "stripe leaders" in the process of creating the functional groups, including identifying gaps in resourcing. I will not prejudge the outcome beyond saying that each functional group will need extra staff that I am expecting the "stripe leaders" to provide. Requirement - to be determined by "stripe leaders". SAP : ??? Requirement - to be determined by SAP project team. Remote Offices : the above requests relate to the London office only. Having identified Enron Controllers for the offices in the Far East I do not envisage significant issues integrating those offices. However, I have minimal understanding of what our requirements in the US and South America are, and propose deferring that discussion to another time... Regards, Tim
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