IBM Sales and Distribution Energy and Utilities

Meeting the imperatives for smarter energyThe partner of choice for SAP solutions

2 Meeting the imperatives for smarter energy

Many decades have passed since

the electricity infrastructure in

developed countries was seen

as any kind of major impediment to

growth and prosperity. But over the next 25 years,

the US Energy Information Administration expects

global energy consumption to grow by more than

40 percent, with demand doubling in some parts

of the world. To meet these needs, utilities will be

required to navigate a technological, regulatory

and marketing landscape far more dynamic and

complex than any seen in the past. We call this

transformation smarter energy.

With the advent of smart metering and other powerful technologies, utilities are seeing an end to the traditional, one-way flow of power and information to their customers. But the changes hardly end there. The mix of energy sources is only becoming more diverse and more interconnected. And consumers are getting much more engaged in their energy transactions–an increasing number to the point of becoming energy suppliers themselves, complicating utility pricing structures and further adding to the breadth of energy options.

Utilities have much to gain – and lose – in an environment this new and this complex. In fact, so much is in flux in our era of smarter energy that utilities are being compelled to transform themselves, and in three key ways, by:

• Transforming utility networks• Improving generation performance• Transforming customer operations

Within this environment, IBM, with its rich experience with SAP solutions, stands ready to help utilities meet the challenges with a comprehensive suite of smart energy solutions and resources.

Our two companies have worked with hundreds of energy and utility organizations around the world, helping them simplify and streamline complex tasks such as balancing supply, demand, service quality, cost, security, and regulatory and environmental compliance. IBM, together with SAP, has the teams and technologies in place to bring about dramatic transformations not only in processes and services but also in the enterprise-wide systems and software needed to fully integrate operational data with business functions.

Transforming utility networksTo achieve the efficiencies and flexibility that smarter energy systems demand, electric grids must evolve from rigid designs limited to one-way information flows to dynamic, automated, more visible and more reliable networks. By connecting and orchestrating key elements such as smart meters, grid operations, work and asset management solutions, communi-cations and integrated distributed resources, utilities can open the way to proactively analyzing conditions and optimizing the network accordingly.

The IBM Intelligent Utility Network Solution is a compre-hensive suite of solutions from IBM and other leading companies, including SAP, designed to enable utilities to achieve these critical goals by inserting more intelligence throughout the grid, from the power plant to the plug. It uses digital sensors, advanced communications networks and sophisticated analytics to help utilities understand demand in real time, more effectively manage both supply and demand, and enable customers to better manage their energy usage. With these capabilities, utilities can reduce outages and faults, improve their responsiveness, handle current and future demand more effectively, raise efficiencies and better control costs.

Energy and Utilities 3

The IBM Intelligent Utility Network Solution is designed to help utilities smooth their path through every phase of their transformation from strategy development, planning and selection through design, implementation and ongoing operations. And it encompasses a portfolio of solutions that utilities can select, structure and adapt at their own pace. Among the solution areas which include SAP are:

• Smart metering and beyond includes the integration of smart metering initiatives into the utility enterprise and the ensuing on-premise capabilities for the utility and for the rapidly expanding span of participants–most importantly the consumer. This replaces the age-old Meter-to-Cash landscape with the more robust Premise-to-Participant environment (i.e., Smart Metering Systems Integration, Centralized Meter Data Services, Meter Data Analytics, Smart Meter Operations and Metering Innovation)

• Grid operations encompasses remote asset monitoring and management, as well as energy management systems required for improved grid performance and planning, and their integration into the utility environment for process automation, reporting, business and operational intelligence.

• Work and Asset Management offers best practices to help increase efficiency as well as reduce IT integration and deployment issues, both within the enterprise and with supply chain partners.

• Intelligent utility network security provides a complete range of security services from assessment, design, deployment, management and support.

• Communications networks offers utility-wide voice and data communications networks and services to enable information connectivity across all components of a smart grid.

Improving generation performanceToday’s power generation companies face fundamental changes in how they build and operate assets. IBM and SAP can help utilities cohesively address issues ranging from energy security to volatile fuel costs to environmental concerns. With these capabilities utilities can improve plant operations, improve asset and information management, and more effectively plan for supply expansions to meet new demands.

“I am genuinely impressed with the SAP for Gas project led by IBM: it’s a fabulous piece of work, fantastically executed and it puts us in a really exciting place. It marks the evolution of Ecotricity from a green electricity company into a green energy company.”

— Dale Vince, the founder of Ecotricity

4 Meeting the imperatives for smarter energy

It starts by gathering comprehensive data from throughout your plants via digital sensors and advanced communication networks. Sophisticated applications then analyze the data, turning information into insights that are delivered in near real-time to the right people and processes. Utilities enlisting power generation optimization solutions from IBM can:

• Enhance asset utilization and unit availability• Manage new plant information lifecycles• Incorporate high-performance computing and

visualization into operations• Optimize market interactions – in areas such as fuel,

electricity, emissions• Assure regulatory compliance• Improve plant and data security• Manage the new build process• Reduce new employee training and development needs

Thanks to Asset Performance Management from IBM, utilities can gain an all-encompassing, yet easily manageable, view of ongoing equipment, plant and fleet performance. Advanced analytics and business intelligence tools can then provide invaluable new perspectives on asset health, opera- tional efficiency, energy usage, emissions and maintenance needs, for a 3D understanding of generation fleet performance and its operational value. By integrating asset management, predictive analytics and key performance indicator (KPI) visualizations, utilities can make more informed, holistic decisions for unit-based generation load dispatch, maintenance and operations.

A holistic, proactive approach also drives the cyber security solution for energy and utilities from IBM. Designed to evaluate the full span of your systems, it uses a comprehensive, coordinated set of technologies to combat myriad threats while also improving your operational, financial and strategic efficiencies. Among the security measures are active anomaly detection to supplement firewall protections, radio frequency (RF) analysis to search for vulnerabilities, and remote system monitoring and back-up to help ensure the appropriate response and avoid service disruptions.

Transforming customer operations Utilities now have a tremendous opportunity to greatly improve customer satisfaction by giving customers access to individual- ized information and highly targeted products and services that can reduce their energy bills and meet other needs as well. The opportunity is fed by the data constantly flowing through the smart energy grid’s interconnected systems – data that can broaden and strengthen your relationship with customers based on usage, operational and other types of intelligence.

IBM can help utilities capitalize on the new customer information dynamics with its customer operations trans- formation (COT) solution. Combining strategy, processes and technologies based on an all-important “single view” of the customer, this integrated suite of offerings is designed to help utilities address the wide span of cost and service challenges associated with their meter-to-cash processes.

The advantages to be gained include new revenue streams that can result by converting richer customer information into additional product and service offerings from you and business partners. Leveraging your new analytic capabilities, you can more quickly identify and address unmet customer needs. Your customer service costs can drop as you take auto- mation and self-service to new heights, capitalizing on best practices and the better use of technology.

All told, the customer operations transformation solution from IBM will bring new unity and effectiveness to customer management, customer care and customer systems. It can simplify the ever-changing task of keeping your business capabilities aligned with market direction, improving customer relationships and utility revenues alike. Its inherent efficiencies and cohesiveness can reduce the cost of serving customers, enabling you to do more for less. And the job of planning, implementing and managing the customer information applications behind these capabilities can become much easier and more effective.

Energy and Utilities 5

Close collaboration and shared knowledge to streamline transformationThe decades-long relationship between IBM and SAP has produced complementary products and services that have smoothed the way to transformation for companies around the world. Our companies are uniquely equipped to help utilities not just with powerful, stand-alone smarter utility solutions but also on integrating entire “systems of systems” across their enterprises.

The scope and strength of these offerings are such that they can greatly simplify transforming the performance of utility network, generation portfolio and customer operations. This includes services to implement SAP Enterprise Resource Planning (ERP), analytics, mobility and HANA, enabling business processes across the utility’s environment. These solutions give you the ability to:

• Integrate meter data automatically with back-end systems for better customer management support, billing and analysis

• Improve asset efficiency and operations at fossil, nuclear and renewable energy plants

• Increase customer retention rates in a deregulated energy market and deliver superior service with our customer care software solutions

• Run complex billing processes, such as applying premium-rate charges to peak-hour customers, and providing discounts to customers using energy during slack demand periods

• Enhance the customer experience with self-service and other user-friendly features

• Gain deep insight into your customer base and monetize that via new services and business partners

To speed your transformations and maximize the returns, IBM smarter energy utility consultants can help you plan and implement SAP applications. These can range from wholesale implementations of flagship SAP applications such as ERP and Customer Relationship Management (CRM) to extensions of those applications. In addition, IBM is working with SAP to help business leverage SAP applications for analytics and decision support, mobility and alignment with SAP HANA.

“IBM demonstrated recent success from a similar SAP deployment at a UK water utility. IBM Global Business Services was able to show that it would work with us to ensure that we maintained forward momentum and completed the project on time.”

— Myron Hrycyk, Chief Information Officer, Seven Trent Water Limite

6 Meeting the imperatives for smarter energy

IBM Global Business Services® can help you determine the most efficient and effective way to adapt legacy SAP applications and existing infrastructure elements to new demands. For example, working with IBM, utilities can plan how best to streamline customer and vendor management and billing through SAP offerings such as SAP Utilities (IS-U), an application designed to help utilities further automate their business processes and improve productivity and customer satisfaction alike.

The IBM and SAP collaboration has spawned software solutions that enable utilities to bridge the gap between business and operational functions. One example is the Smart Meter to Cash Systems Integration solution, which includes SAP IS-Utilities, AMI and several other SAP applications. It is designed to automate the integration of data produced by advanced metering infrastructures with the many parts of the business needing to make highly productive use of that data, such as billing and customer care. The IBM and SAP parts of the solution come together seamlessly to create a unified, more easily managed whole, with information from across the network merging into SAP Customer Relationship Management and Billing enterprise systems. By helping utilities transform both their meter network and customer operations, the benefits can extend from higher reliability and greater workforce productivity to more satisfied customers and reduced energy demand.

In fact, IBM and SAP have made it a priority to help clients extract maximum value from the enormous volumes of data flowing in from all corners of their enterprises. SAP HANA in-memory analytics can serve as a smart grid hardware-software appliance to enable utilities to take advantage of near real-time operational analytics across complex environments and involving massive amounts of data. What’s more, dedicated IBM services for SAP analytics can help maximize your entire organization’s use of business intelligence, for example, in using analytics to quickly spot opportunities for improving energy efficiency. IBM and SAP are also partnering to provide SAP in the Cloud Services that can bring more flexibility and value to utility IT strategy and operations.

“In the old environment, many servers were running at less than 10 percent utilization. We’re now doing a much better job of utilizing the assets, and reliability is better too. Since going into production with our SAP ERP environment on IBM, we’ve experienced no unplanned outages.”

— Keith Jinright, Data Center manager, Energen

Energy and Utilities 7

A strong foundation of talent and technologySmarter energy means smarter computing in every respect, including the hardware, operating systems, industry plat- forms and specialized talent to keep your applications working reliably, securely and at peak levels of efficiency.

For example, the IBM Solution Architecture for Energy and Utilities Framework (SAFE) can work across your enterprise to eliminate information silos and redundancy as it integrates, manages and optimizes leading edge utility systems from companies such as SAP. The IBM Power SystemsTM hardware platform can help utilities consolidate or even eliminate server resources while bringing new levels of reliability, speed, flexibility and speed to their toughest challenges and greatest opportunities. And as utilities experience exponential increases in data flow within the smarter energy environment, IBM DB2® database software on IBM POWER® can bring utilities its own set of advantages. These include up to 10 times the batch performance, pro- cessing speed exceeding one million transactions per minute, and many others.1

An unmatched human infrastructure, tooIBM and SAP offer comprehensive “infrastructures” of service support, ongoing research and technical advancement. IBM Global Business Services experts include a significant number specializing in SAP solutions for the energy and utilities industry. This team provides worldwide business consulting, solution design, implementation, business process transformation and ongoing support for SAP electric utility customers, as well as utilities offering gas, water and waste management services.

To help speed returns from your SAP implementations, we have developed best-in-class roadmaps and reference architectures that help preconfigure and optimize both your application suite and solution infrastructure. IBM Application Management Services can help your team drive long-term quality and productivity improvements through smarter sourcing, both onshore and offshore.

And IBM Global Financing can provide options to finance your IBM and SAP solutions, customizing payment structures to meet your needs for minimizing cash flow and further accelerating time-to-value.

Building on our strengthsIBM and SAP engineers continue to combine their unmatched expertise and resources to develop even more advanced solutions and supporting infrastructures.

Much of this work is conducted at joint IBM and SAP solution delivery facilities and Centers of Expertise (CoEs). These include our Global Industry Solution Centers in La Gaude, France and Dallas, Texas where our Energy & Utilities team integrates new leading-edge IBM and SAP solutions for the utility industry to further expand the scope and value of smarter energy technologies. Our Global Industry Solution Centers demonstrate these unique capabilities in a rapidly expanding set of customer-focused workshops.

The numbers speak for themselves

•IBMhasaglobalnetworkofmorethan35SAPCompetence andExcellenceCentersincludingtheflagshipIBMSAP InternationalCompetenceCenter(ISICC)nearSAPhead- quartersinWalldorf,Germany.Throughthesecenters, IBMoffersguidance,serviceandsupportaswellasresearch, solutiondevelopmentanddelivery.

•IBMhasearned25PinnacleAwards–themostprized PartnerCommunityawardfromSAP–includingCustomer SatisfactionPartneroftheYearforthreeyearsrunning. IBMwasawardedbothSAPGlobalTechnologyPartnerof theYearandTransformationalAwardforRapidTimetoValue in2012.

For more informationTo learn more about how the IBM can help you make the most of your SAP investment and succeed in a changing world, contact:

ibm-sap.com/energy

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© Copyright IBM Corporation 2012

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Produced in the United States of America April 2012

IBM, the IBM logo, ibm.com, DB2, Global Business Services, POWER, and Power Systems are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml

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1 Metrics are based on comparisons to other leading databases inrepresentative SAP implementations.

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