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Innovative Solutions for a
Challenging Utility Market
Andrew Strachan
© 2011 SAP AG. All rights reserved. 2
WHAT IF ?
© 2011 SAP AG. All rights reserved. 3
I Offered you : An investment with :
>55% of investment returned after 1 year
Remainder within 6-9 months ?
Thereafter >100% p/a dividend
A rapidly changing world….
……..Requires business transformation
© 2011 SAP AG. All rights reserved. 5
Utilities recognize that change is the only constant
Must rapidly seize technology and adapt to change
Per capita consumption
Renewable sources
Regulatory compliance
Workers’ Comp
Affordable rates
Security
Natural resources
Affordable fuels
Workforce knowledge
Labor pool
Reliable service
Demand Supply
© 2011 SAP AG. All rights reserved. 6
…and need to adapt and seize the opportunity
Growth, sustainability, transformation
Response Savings
Risk
Incidents and fines
Cost of fuel and service
Interruptions and outages
Environmental impact
Smart Technology
Supply in both directions
Failure/incident prevention
Customer intimacy
Knowledge transfer
Productivity
© 2011 SAP AG. All rights reserved. 7
Key trends shaping the utilities industry
Capacity
Aging infrastructure
Shrinking water supplies
Rising fuel costs
Aging workforce
Increasing power
demands
Increasing vulnerability
to weather
Customer choice
Price sensitivity
Quality expectations
Increasing competition
Pressure to reduce
carbon footprint
Theft and increasing
security risks
Technological
Innovation
Deployment of smart
meter systems
Introduction of smart
grid technologies
Integration with green
and renewable energy
systems
Water efficiency and
recycling systems
Social & Economic Political
& Regulatory
Enforcement of market
liberalization
Increasing fines for
service interruptions
Carbon reduction
compliance and
programs
Funding for renewable
systems
© 2011 SAP AG. All rights reserved. 8
The resulting drivers
Infrastructure
Upgrade assets
Prolong asset life
Prevent asset failures
Optimize asset
efficiency
Improve security
Prevent compliance
failures
Promote safety
Improve productivity
Transfer knowledge
Train to support new
technologies
Enable to engage with
Customers
Enable to respond faster
to outages
Customer
Shorten and prevent
outages
Offer new products and
services
Increase touch points
Provide on-line access,
visibility and services
Workforce Management
Timely, reliable and
relevant analytics
Visibility to assets,
workforce & customers
Balance supply and
demand
Increase revenue,
cash flow and ROA
Reduce cost of service
delivery
© 2011 SAP AG. All rights reserved. 9
Ongoing Transformation of African Power Utilities – An
extract
NIGERIA
Unbundled. Deregulation on its way
GHANA Unbundling followed by privatization
ZAMBIA No privatization nor unbundling
Transmission and distribution privatized MALAWI State owned. But restructuring ongoing
GABON Privatized water and electricity
utility companies
CAMEROON
Privatised electricity utilities
TANZANIA State owned but privately managed
KENYA Unbundling since 1998.
UGANDA Fully unbundled. Main generation privatized.
ETHIOPIA
Generation is fully state owned
ZIMBABWE
Fully unbundled. Plans for privatization RWANDA Vertically integrated Electrogaz
Recently concessioned.
SOUTH AFRICA Unbundling followed by privatization
© 2011 SAP AG. All rights reserved. 10
The new Drivers of Change in Utilities
Distributed Generation
In favour of renewable energy resources
Not only Utilities-owned but also Consumer-owned
Smart Grid
Modernizing the Utilities„ delivery infrastructure
Redefinition of the relationship with the customer
E-Mobility
Significant increase of power demand
Built up service infrastructure
Optimize Energy Efficiency
Reduce CO2 Emissions
© 2011 SAP AG. All rights reserved. 11
Never mind the delivery of Potable Water
© 2011 SAP AG. All rights reserved. 12
Non-Integrated Business Processes Hampering
Power Generation Safety and Efficiency
Asset
Management
Equipment
Vendors
Asset
Owners
Production
Management
Fuel Vendors
Transport
Trader
Transmission System
Operator
External
Services
Production
Regulator
Paper-based work, incomplete data
Aging workforces and knowledge drain
Insufficient failure effect analysis
Unsafe and unreliable plant operation Missing control of legal /regulatory requirements
High administration efforts
Liability risks
Disconnected technical and business data
Inconsistent data / monolithic IT systems
Poor performance visibility
Risky business scenario simulations
Volatility of commodity markets
Inefficient business planning
© 2011 SAP AG. All rights reserved. 13
Transmission & Distribution Companies Face Many
Challenges
Transition from Traditional to Smart Meters
Outdated Grid Management
Increasing Regulatory Requirements
Inefficient maintenance
processes
High maintenance costs
Large amount of tied up capital
Low work quality
Aging infrastructure
Rising maintenance costs
Decreasing reliability
High failure costs
Inefficient field force
management
Low percentage of wrench
time
No access to up-to-date
information
Bad data quality and high error
rates
Processes do not cover market
requirements
No fulfillment of legislative directives
Decreasing system performance due
to high data volume
No on-time communication between
market participants
High costs-to-serve through
process complexity
Increasing contractual relationships
due to new market participants
Manual process handling no longer
possible
Lack of flexibility within current
business applications
High costs for change management
Short timeframe for implementation
of new legal requirements
Lack of timely information
Limited information on
consumed and provided energy
Incorrect, imprecise and non-
timely information
Inefficient Process Handling
High manual effort for
operational processes
Regulatory requirement to
introduce smart meters
Need to integrate heterogeneous
AMI systems with existing IT
landscape
Necessity to adapt existing
business processes
© 2011 SAP AG. All rights reserved. 14
Who is SAP ?
40 Years!
61,000+ Employees Worldwide
190,000+ Customers in 120 countries
€12.5 Billion+ In Revenue
© 2011 SAP AG. All rights reserved. 17
SAP Helps the World Run Better
© 2011 SAP AG. All rights reserved. 18
Some SAP milestones over the last 40 years
1979 1999/2000 1972 1992 2011/2012.....
Business Automation Business Change Data processing
R/1 € 0.3 mill.
Revenue
9 Employees
R/2
Mainframe €5.1 mill.
Revenue
60 Employees
50 Customers
in 2 Countries
R/3
Client/Server
€424 mill.
Revenue
3,200 Employees
2,800 Customers
in 35 Countries
SAP.com
One-Step-
Business
€6.3 bill.
Revenue
25,000
Employees
15,000 Customers
in 120 Countries
SAP
Business Suite
SAP NetWeaver
Enterprise
Services
Architecture
€10.6 bill.
Revenue
51,500 Employees
105,000+ Customers
in 130+ Countries
24 Industry Solutions
€ 1.6 bill. In R&D
SAP‟s focus is on Business Applications
© 2011 SAP AG. All rights reserved. 19
1988 1994 1995 1996 1997 2009... 1992 1998 1999
Start RIVA
project
First RIVA
customers
live
2000 2003
SAP has a Long-Term Industry Strategy for Utilities
Launch IS-
U/CCS
Development
Project
Establish
dedicated
IBU
IS-U/CCS FCS
IS-U/CCS GCS
First Int.
Utilities
Conference
2,000+ SAP inst.
550+ IS-U inst.
350 mill+. consumer
contracts
Market Entry RIVA
Industry Solution Utilities /
CCS
SAP for Utilities
• Global SAP utilities practice in 70+ countries
• SAP delivers end-to-end solutions from ERP to CRM &
Billing/Contract Accounting to Device Management
• SAP is the acknowledged trend-setter in the area of
Energy Data Management & Intercompany Data Exchange
SAP Utilities
2.5 Billion utility
bills per year
© 2011 SAP AG. All rights reserved. 20
In Utilities – the Bottom Line: Best Utilities Run SAP
across the entire Value Chain
1300+ Utilities
In 70+ Countries
Use SAP for Utilities
To Power Their Businesses
Generation
Transmission
& Distribution
Retail
© 2011 SAP AG. All rights reserved. 21
And….. SAP in Utilities in Africa
• Johannesburg City Power
• Namibia Power
• Kengen
• KPLC
• CEB (Mauritius)
• Eskom
• City of Cape Town
• Tshwane Metropolitan
• Council (Pretoria)
• City of Johannesburg
• ZESA
• Botswana Power
• Eskom Uganda
• Johannesburg Water
• RandWater
• Department of Water Affairs
• Namibia Water
• WUC (Botswana)
• Capricorn District Council
© 2011 SAP AG. All rights reserved. 22
Asset Lifecycle and Resource Management Plant Engineering and Construction
Plant Maintenance and Operations
Decommissioning
Supply Operations Grid Engineering and Construction
Grid Maintenance and Operation
Connection and Device Management Installation Service
Meter Reading Services Consumption Data Collection
Energy Forecasting
Energy Capital Management Energy Data Management
Portfolio Management Energy Trading
Selling of Energy and Services Campaign Management
IC Marketing
Sales Management for Residential Customers Sales Management for Commercial and Industrial Customers
Account and Contact Management Integrated Sales Planning and Analysis
Customer Service Management
Service Order Management with ERP Billing Service Processes for Utilities
Service Contract and Entitlement Management
Complaints and Returns Management
Electronic Customer Services Account and Contact Management
Billing for Commercial and Industrial Customers Billing of Unmetered Services
Billing of Services
Customer Financial Management
Receivables and Collections
Management
Reconciliation and Closing Auditing
Collaborative Services and Intercompany Data Exchange Supplier Switch
Reconciliation and Settlement Payment Processing
Enterprise Management and Support
Solution Map Utilities Suppliers and Partners
Customers and
Channels Generation Transmission & Distribution Meter Operation Retail and Services
Billing of Energy and Services
Billing for Residential Customers
Processes for construction and
operation of power plants
Processes for construction and
operation of transmission and
distribution grids
MR data entry
Processes for collection, analysis, aggregation, and combination of energy
data and the decision support processes, energy sales processes, and
energy trading processes based on this data
Customer-oriented processes
for the marketing and sale of
energy products and water,
as well as the services
relating to these activities
Customer-oriented service
processes relating to the
fulfillment of terms
of supply contracts
Processes for billing and invoicing supply
contracts for energy products and water
Processes for
contract
accounting
Processes for adherence to energy-related
laws and industry-binding regulations
in the deregulated energy market
EAM
ECM
CRM
and
Billing
© 2011 SAP AG. All rights reserved. 23
Suppliers and
Partners
Customers and
Channels
Generation Transmission & Distribution Meter Operation Retail and Services
Asset Life Cycle and Resource Management
Supply Operations
Meter Reading Services
Energy Capital Management
Selling of Energy and Services
Customer Service Management
Billing of Energy and Services
Customer Financial
Management
Collaborative Services and Intercompany Data Exchange
Analytics
Strategic Enterprise
Management Financial Analytics Operations Analytics Workforce Analytics
Financials
Financial Accounting Management Accounting Financial Supply Chain
Management Corporate Governance
Human Capital Management
Talent Management Workforce Process
Management HCM Service Delivery Workforce Deployment
Corporate Services
Travel Management Environment, Health and Safety Incentive and Commission
Management Real Estate Management
Operations Support
Life-Cycle Data
Management
Program and Project
Management Quality Management Indirect Procurement Global Trade Services
Enterprise Management and Support
Solution Map Utilities
© 2011 SAP AG. All rights reserved. 24
SAP‟s Water Utilities Value Chain Coverage
Source, Capture
& Storage
Management
Transport &
Distribution
Meter Reading & Services
Selling of Water & Services
Customer Service Management
Quality & Compliance
Retail &
Services
Customers
& Partners
Dam & Reservoir Lifecycle Management
Water Network Lifecycle Management
Billing of Water & Services
Customer Financials Management
Technology
Financials
Human Capital Management
Corporate Services
Operations Support
Analytics
Suppliers
& Partners
Resource Management
Co
re B
usin
es
s F
un
cti
on
s
Su
pp
ort
ing
Bu
sin
es
s F
un
cti
on
s
SA
P E
RP
S
AP
fo
r W
AT
ER
Uti
liti
es
© 2011 SAP AG. All rights reserved. 25
Business Intelligence & Analytics
SAP for Utilities: A Modular Business Process Platform
Business Intelligence Reports & Analytics
Meter Operations
Energy Data Management
AMI / Smart Grid Integration
Energy Portfolio Management
Reconciliation & Settlement
Energy Accounting
Selling of Energy & Services
Customer Service
Billing of Energy & Services
Customer Financials
Management
Intercompany Data Exchange
Plant Lifecycle
Management
Network Lifecycle
Management
Resource & Supplier
Management
Energy Capital
Management
Enterprise Asset
Management
Customer
Relationship & Billing
Operations
Support
Corporate
Services
Human Capital
Management
Financial
Accounting
Performance
Management
Enterprise Management & Business Support
© 2011 SAP AG. All rights reserved. 26
Analysts Continuously Rank SAP #1 in Utilities
International Utility
Billing & Customer Info Systems
© 2011 SAP AG. All rights reserved. 27
Rank Company Country ERP CR&B
17 GDF Suez France
27 EDF Group France
43 ENEL Italy
47 RWE Group Germany
82 E.ON Germany
87 Iberdrola Spain
129 National Grid UK/USA
171 Excelon USA
196 KEPCO S.Korea
201 Southern Comp USA
206 Kansai Electric Japan
225 Dominion Res. USA
226 FPL Group USA
236 SSE UK
239 EDP Portugal
258 Chubu Electric Japan
260 EbBW Germany
269 Duke Energy USA
7 of the top 7 utilities in Forbes2000* run SAP ERP and Customer Relationship & Billing.
39 of the top 50 utilities in Forbes2000* run SAP ERP.
*Public listed companies on any publicly accessible stock
exchange http://www.forbes.com/lists/2009/18/global-
09_The-Global-2000_IndName_20.html
SAP for Utilities Facts & Figures - Dx
Rank Company Country ERP CR&B
281 PG&E USA
282 Veolia Env. France
284 American Elec. USA
310 First Energy USA
312 Electrobras Brazil
313 Entergy USA
317 NTPC India
323 Edison Int. USA
333 Union Fenosa Spain
335 PSEG USA
336 CEZ Czech
339 Gas Natural Spain
340 Con. Edison USA
361 Fortum Sweden
409 Sempra Energy USA
415 Tokyo Electric Japan
421 TransCanada Canada
424 Williams Co USA
Rank Company Country ERP CR&B
445 AES USA
449 Kyushu Elec. Japan
458 Progress Ener. USA
479 CLP Holdings China
487 PPL USA
492 Xcel USA
540 Tokyo Gas Japan
549 Huaneng Pow. China
575 Tenaga Malay.
579 Centrica UK
592 Edison Italy
600 NRG Energy USA
617 Tohoku Elec. Japan
626 Saudi Electric Saudi
© 2011 SAP AG. All rights reserved. 28
SAP for Utilities
Facts & Figures Power Generation
10 of the top 15 power
generation utilities in
Platts250* run SAP ERP
*Public listed companies on any publicly accessible stock exchange
http://www.platts.com/Top250Home
Rank Customer Region ERP
18 EDF France
19 ENEL Italy
34 Excelon USA
36 Iberdrola Spain
38 Endesa Spain
41 Vattenfall Sweden
45 E.ON Germany
47 EnBW Germany
49 CEZ Czech.
51 FPL Group USA
52 Electrobras Brazil
55 EDP Portugal
57 Southern Co. USA
62 Fortum Sweden
63 FirstEnergy USA
Rank Customer Region ERP
65 Union Fenosa Spain
66 AEP USA
67 Edison Intl. USA
71 Entergy USA
77 Duke USA
86 CLP Holdings China
91 PPL Corp USA
93 Enersis Chile
96 Acciona Spain
100 Alpiq Holding Switz.
104 CEO Lithuania
105 CEMIG Brazil
108 Progress USA
116 Tokyo Elec. Japan
121 Kyushu Elec. Japan
© 2011 SAP AG. All rights reserved. 29
Why SAP?
Minimize Risk
Over 2,000 utilities worldwide have
deployed the SAP ERP solution
Over 700 utilities in 32 countries are using
our utilities industry solution
Leverage the knowledge of over 20 years of
delivering Utility Industry specific solutions
expertise of over 8,000 developers, and over
$1 billion in annual R&D spend
Enable Business Strategy
Real-time decision support to enable quick
response to regulatory, market,
organizational and customer demands
SAP Utility customers achieve measurable
business value (reductions in integration
costs, working capital, O&M costs, etc.)
Reduce Operating Costs
Reduce IT costs by 30-50% by shifting
responsibility for software development back
to the solution provider
Eliminate 80-90% of interfaces (interfaces
cost on average $35K to develop and $6K/yr
to maintain)
Growth and Profitability
Fortune 500: 10 of the Top 10 utilities run SAP
Continuous process efficiency and profitability
across all segments
© 2011 SAP AG. All rights reserved. 31
How do you
RUN your
INTERNAL
Operations ?
© 2011 SAP AG. All rights reserved. 32
What do you use to run ?
Compliance
Legal
Contracts
Travel Maintenance
Stores /
Warehouse
Purchasing
Reporting
Finance
Loans
Projects
Budgeting
Scheduling
Etc.
© 2011 SAP AG. All rights reserved. 33
Lack of data and process integration
No single view of the data
Lack of data integrity
Multiple Vendors
High Support Cost
Support Availability
Duplicated Efforts
Current Technology Adoption Levels
Upgrade Strategies
Platform Strategies
Scalability
Some key issues :
The Typical IT Landscape:
Multiple Disparate Systems
High TCO
© 2011 SAP AG. All rights reserved. 34
The TOTAL cost
of ownership =
Cost of
external
platforms
Cost of
applications
+
+
Cost of
integrating
applications
and platforms
Co
re A
pp
lic
ati
on
s
The Complete TCO Picture
Some typical applications
Self
Service
Route Reading
Management
Meter
Reading
GIS …. Land
Information
HR Finance
Purchasing
Billing Payroll
.... Asset
Maintenance
Ex
tern
al
Ap
pli
ca
tio
ns
One single end to end integrated solution is needed to minimise the Total Cost of Ownership
It is clear that these applications need to be
integrated: BUT HOW ?
© 2011 SAP AG. All rights reserved. 35
© SAP 2011 – SAP @ WAPIC
What is ERP ?
Enterprise resource planning (ERP) is the planning of how business
resources (materials, employees, customers etc.) are acquired and
moved from one state to another.
An ERP system supports the business system that maintains in a
single system the data needed for a variety of business functions such
as Manufacturing, Supply Chain Management, Financials, Projects,
Human Resources and Customer Relationship Management.
An ERP system is based on a common database and a modular
software design. The common database can allow every department
of a business to store and retrieve information in real-time.
The ERP modular software design should mean a business can select
the modules they need, to improve business performance.
Source : Wikipedia
© 2011 SAP AG. All rights reserved. 36
ERP aligns organisations around core business
processes
© SAP 2008 / Page 36
Order Processing
Stores and Procurement
Customer Services
Financial Reporting
Most legacy
IT systems
were aligned
by function
and by
department
ERP works
across these
traditional
barriers...
ERP is a single, integrated business solution that works across
your entire organisation
Company X
HR Purchasing Operations Billing Maintenance Finance
Lack of data and process integration
No single view of the organisation
Lack of data integrity
Cost of supporting multiple systems
Duplicated Efforts
... and aligns your internal processes
... and uses common data
© 2011 SAP AG. All rights reserved. 37
Comprehensive ERP Functional Scope
SAP SCM
SAP PLM
SAP
SRM
SAP
CRM
SAP
ERP
SAP NetWeaver
SAP ERP provides comprehensive ERP functionality
allowing the achievement of business strategies in an
integrated but open and extendable architecture
End-User Service Delivery
Analytics Strategic Enterprise
Management Financial Analytics Operations Analytics Workforce Analytics
Financials Financial Supply Chain
Management Financial Accounting
Management
Accounting Corporate Governance
Human Capital
Management Talent Management Workforce Process Management Workforce Deployment
Procurement and
Logistics Execution Procurement
Supplier
Collaboration
Inventory and
Warehouse
Management
Inbound and
Outbound Logistics
Transportation
Management
Product
Development and
Manufacturing
Production
Planning
Manufacturing
Execution
Enterprise Asset
Management
Product
Development
Life-Cycle Data
Management
Sales and Service Sales Order
Management
Aftermarket Sales
and Service
Professional-
Service Delivery
Foreign-Trade
Management
Incentive and
Commission
Management
Corporate Services Real Estate
Management
Project Portfolio
Management
Travel
Management
Environment,
Health and Safety
Quality
Management
SAP NetWeaver People Integration Information Integration Process Integration Application Platform
© 2011 SAP AG. All rights reserved. 38
A Teaser… Wouldn‟t you like this view ?
© 2011 SAP AG. All rights reserved. 40
What about
your revenue
stream ?
© 2011 SAP AG. All rights reserved. 41
Evaluations confirm revenue creation and revenue
assurance challenge
Utilities streamline their billing process and look for new ways in collections
management to reduce DSO (Days Sales Outstanding) and avoid bad debt
losses.
Scaling of mass activities
billing/invoicing and bill print High DSO blocks
working capital
Example:
1 bn revenue and financing costs of 7 %
Reducing DSO by 1 day saves ~ $US 200.000
The probability
to get paid decreases
with the age of the debt 1000
2000
3000
4000
Billing Invoicing Bill Print
Runtime of mass
Activity [sec]
Example:
Runtime of Billing, Invoicing and Bill Print process
decreases with parallelization (e.g. 60 Jobs running on 12
application servers)1
© 2011 SAP AG. All rights reserved. 42
What does this mean for your business?
Top executive issues
How do I streamline the consumption to billing
process to speed revenue realization?
How do I reduce call center costs and improve
customer service by ensuring billing clarity and
accuracy?
How do I enhance my receivables management
with complete and accurate accounting?
How do I reduce DSO and avoid bad debt
losses?
© 2011 SAP AG. All rights reserved. 43
Fragmented billing and receivables handling impair
revenue realization
Utilities have no streamlined and comprehensive process chain to handle billing, accounting and
collections in an effective and sophisticated way
Time critical due to high data volume
Complicated billing rules cause incorrect
invoices and unsatisfied customers
High operating costs in case of manual
intervention
Complex billing process
and high volume data
No consideration of customers‟ credit risk and
thus treatment of all in the same way
Slow, fixed and non-transparent processes
Legacy systems and thinking limit improvement
opportunities
Reactive collections instead of
pro-active consideration
Poor Collections
Inaccurate accounting, controlling, and reporting,
associated with difficult reconciliation
No Utilities specific expertise in accounting
processes
Complex and high-volume payment handling and
unclear payment allocation associated with
expensive manual work
Lack of comprehensive
sub-ledger accounting
External Collection
Agencies
Banks /
Payment Points
Public
Authorities External Credit
Bureaus
Court
Billing
Meter
Reading
Invoicing
Front
Office
Back
Office
Other
Services
© 2011 SAP AG. All rights reserved. 44
Financial front office
Financial back office
Consumption billing
Collection success
evaluation
Accurate and
timely billing
process
Bill to Cash is an end-to-end,
cross-functional process
Bill to Cash connects processes across departments to enable a timely revenue realization
Accounting engine
Receivables Management
& Payment Handling
Credit & Collections
Management
Billing of Energy and
Services Chief Financial Officer
Collections Accounting Billing CFO
Customer self services
Multi-channel
bill
presentment
Payment handling
Credit risk based
collections
© 2011 SAP AG. All rights reserved. 45
Billing within the value chain
Work
Management
Connection
Request
Meter
Reading
Payment
Collection
Device
Management
Disconnection Move In
Move Out
- Customer Services
- Billing and Invoicing
- Revenue & Credit Control
- Device Management
- Human Resources
- Financials
- Logistics
- Other Systems
GIS
Mobile
Devices Print
Shop
Legal
CRM
Billing
and
Invoicing Enquiries /
Complaints
Device
Installation
Customer Service
Management
Human
Resources
ERP
Financials
AMI /
Prepaid
EBPP
SAP Utility Billing
© 2011 SAP AG. All rights reserved. 46
Financial front office
Financial back office
Consumption billing
Collection success
evaluation
Accurate and
timely billing
process
Bill to Cash is an end-to-end,
cross-functional process
Bill to Cash connects processes across departments to enable a timely revenue realization
Accounting engine
Receivables Management
& Payment Handling
Credit & Collections
Management
Billing of Energy and
Services Chief Financial Officer
Collections Accounting Billing CFO
Customer self services
Multi-channel
bill
presentment
Payment handling
Credit risk based
collections
© 2011 SAP AG. All rights reserved. 47
Customer Service moving to Customer Cooperation
Communication Channel
Walk in, writing eliminating
Call Center decreasing
IVR – Interactive Voice Response continuing
Internet increasing
AMI & HAN* new
Customer Role
Consumer continuing
Co-Generator increasing
Trader new
Products/Services sold
Commodity continuing
Energy Efficiency Services strongly increasing
Energy efficient Appliances increasing
Micro-Generation, Co-Generation increasing
© 2011 SAP AG. All rights reserved. 48
Financial Customer Care
Preferred channels to access bills and account information
Preferred payment methods
Preferred payment day
Offer flexible payment condition due to financial situation
One bill for all businesses incl. non energy
Other valuable information on the bill e.g. green energy
Easy access to utility with short reaction time
Via self-services or Call center
Reliable and expert knowledge contact persons, who has a 360 view
Utility Customer
© 2011 SAP AG. All rights reserved. 49
Dispute Management
Customer
disagrees with
invoice
Agent creates a dispute
Customer contacts Agent in Interaction Center
Investigation of Dispute
Dispute is routed to responsible person
Calculate adjustment
Result is communicated to the customer
6
7
Agent reviews customer account status and invoice
1
4
5
Dispute
Manager
Dispute
Manager
8
3
2
© 2011 SAP AG. All rights reserved. 50
Case Management
Contains Related Information
In One Place
All Bundled Together
Enabling Collaboration
Managed within a Timeframe
The Case
© 2011 SAP AG. All rights reserved. 51
Timely and correct execution of processes
from Bill to Cash
Seamless integration of receivables management with general ledger and profitability accounting
including drill-down capabilities
Following accurate accounting principles, respecting legal requirements
Reliable interaction with banks, clearing houses, external cash points
Clearing strategies for automated payment assignment
Compliant and transparent
receivables management
Seamless Bill to Cash will orchestrate and accelerate all billing, accounting and revenue related activities
Run bill/invoice process on time
Link accurate rate for bill / invoice to
customer
Customer can view bill via internet self-
service / e-mail or mail
Optimizing the billing /
invoicing process
External Collection
Agencies
Banks /
Payment Points
Public
Authorities External Credit
Bureaus
Court
Billing
Meter
Reading
Invoicing
Front
Office
Back
Office
Risk based customer segmentation controls the business and
collections process starting already at sales
Broad variety of functions enables 360 degree approach
Continuous improvement of collections processes due to easy
configuration of sophisticated collections strategies
Automatic responsibility determination and optimized
resources allocation
Monitoring collections success
Successful collections
Other
Services
© 2011 SAP AG. All rights reserved. 52
Timely and correct execution of processes from Bill to
Cash
Faster payment and dunning runs performance grew from 12 hours to 25 min. for each of these runs
Overall reduction of manual A/R work by 50%
Reduction of manual clearing and payment allocation work by 40% - 80%
Compliant and transparent receivables management
Seamless Bill to Cash will orchestrate and accelerate all billing, accounting and revenue related activities
Reduction of overall billing rate to less than
.001%
Effort for complex billing -50%
Customer can view bill via internet self-
service / e-mail or mail
Bill-payment ratios rose from 85% to 98%,
increasing revenues
Cash reserves increased to US$115 m,
avoiding need for US$50 m loan
Optimizing the billing /
invoicing process
External Collection
Agencies
Banks /
Payment Points
Public
Authorities External Credit
Bureaus
Court
Billing
Meter
Reading
Invoicing
Front
Office
Back
Office
Reduction of outstanding receivables by 20% in a three-year
period (from 20.4% of revenue to 16.3%) Cash flow
increase of € 80 m for a revenue of € 2 billion
Increase in collection efficiency by 50% - 80 % previously
uncollectible debt can now be collected because of payment
agreements, external collection agencies, better information of
customers and collection agents
Improved speed of collections
Reduced time to manage past-due accounts
Successful collections
Other
Services
© 2011 SAP AG. All rights reserved. 53
Lets See it in Action !
© SAP
2008 /
Page
53
© 2011 SAP AG. All rights reserved. 56
Evolving to Preventive and Reliability Centered Maintenance
© 2011 SAP AG. All rights reserved. 57
Enterprise Asset Management
© 2011 SAP AG. All rights reserved. 58
SAP Linear Asset Management
Need to manage linear assets as a
continuous asset with dynamic
segmentation
Supporting ways to identify location
information:
E.g. describe pipelines (Water, Gas, etc.)
by Mile/km Point, GIS Locations for
access, transmission towers, markers etc.
Linear aspects considered for :
Data modeling
Inspections processing
Condition monitoring
Maintenance and Repair
© 2011 SAP AG. All rights reserved. 59
Linear Data - Offsets
Offsets are used to define an exact location
4,75m
2,15m
4,62m
4,60 km
0,80 km
© 2011 SAP AG. All rights reserved. 60
Three Levels of Integration Between GIS and SAP
SAP application
Composite
GIS
SAP GIS Data synchronization
SAP functionalities GIS functionalities
Composite business
processes and services
© 2011 SAP AG. All rights reserved. 61
Lets See it in Action !
© SAP
2008 /
Page
61
ENERGY DATA
MANAGEMENT
IN UTILITIES
© 2011 SAP AG. All rights reserved. 64
Lifecycle of Energy Data Management
Profile Data Management
1
3
5 4
6
Formula Calculation &
Synthetic Profiling
7 2
Upload and Store into
Energy Data Repository
Plausibility Checking
& Value Substitution
Processing Energy Data
(Complex Billing, Settlement)
Archive Energy Data
Creation of
Master Data (e.g. Profile Header)
Enabling
Trading
Settlement
Complex Billing
Complex forecasting
Real Time Pricing
Etc
© 2011 SAP AG. All rights reserved. 65
Real Time Pricing – Spot Pricing
Forecast Profile
Consumption Profile
Normal Price
Spot Price Applies
Time
Qu
antity
© 2011 SAP AG. All rights reserved. 66
Getting SMART !
© 2011 SAP AG. All rights reserved. 67
SAP’s AMI Solution Helps Realize the
Maximum Value of AMI Investment
© 2011 SAP AG. All rights reserved. 68
AMI
Headend
System
AMI
Headend
System
C
C
C
C
Outage
Management
Realtime Applications
Demand Response,
Dynamic Pricing,
Distributed Generation
Grid
Management / Optimization
AMI@SAP
Energy
Retailers
3rd Party
Applications on
Energy Capital Mgmt
SAP
Customer Relationship
& Billing
SAP IDE
Intercompany
Data Exchange
SA
P E
DM
SAP
Applications on
Energy Capital Mgmt
SAP
Enterprise Asset
Management
MDUS Meter Data
Unification &
Synchronization
SAP AMI Integration for Utilities
© 2011 SAP AG. All rights reserved. 69
SAP for Utilities is the first solution providing a fully
integrated Energy Portfolio Mgmt
Defining and managing sales portfolios
Calculation of pricing curves
Data exchange with external information
sources (forecast data, stock market
prices etc.)
Provision of base prices and quotation
prices for sales processes
Integration with SAP ERP and SAP CRM
Calculation of short-term schedules within
nomination processes
Reduction of risks arising from
mismatch between demand
planning, purchase and actual
sales portfolio
Increasing quality and
accuracy of nominations saves
costs for regulation energy
Compliance with regulatory
requirements
Key benefits Energy Capital Management
Matching of sales and
procurement
Short-term scheduling based
on actual supply contracts
and forecast profiles
Energy Portfolio
Management
Standardized platform for all Sales Portfolio Management processes
Reduction in number of interface related errors
Significantly less work thanks to process automation
Data storage comply with auditing requirements
More transparency and minimized risks
Customer examples
© 2011 SAP AG. All rights reserved. 71
What about all
of the Data ?
72
Facing the Data Tsunami
Example: Utility with 1.2M Customers
1000 Byte per reading
1 reading per
customer/year
---------------------------------
---------
= ~ 1 GB raw data per
year
Classic Meter
15-min (96 values) per
customer/day
5760 Byte per customer/day
------------------------------------------
= 6.44 GB raw data per day 2.3
TB per year
= ~ 750 GB per year compressed
Smart Meter
© 2011 SAP AG. All rights reserved. 73
Breakthrough innovation : analyzing
data at the speed of thought (HANA)
The In-memory Revolution:
Business Insight
3600x Faster
reporting
speed
460B Data records
analyzed in
less than a
second
SAP HANA
HANA
KEY MESSAGE
The breakthrough innovation of SAP “In-Memory Technology”
460 B data records analyzed in < 1s : 3600x faster
© 2011 SAP AG. All rights reserved. 76
Getting to the
Field
© 2011 SAP AG. All rights reserved. 77
Mobile solutions virtualize business
connect to enterprise data
collaborate with partners
conduct business
Mobile enables you to anytime, anywhere
Analytics
Personal Productivity
& Safety
Partner Collaboration
Core Business Processes
Customer Engagement
Perform safety checks
Manage certifications
Receive/respond to alerts
Receive training
Elect renewable sources
Shop for products/services
Monitor/reduce consumption
Track/prepare for storms
Manage network performance
Conduct operator rounds
Maintain assets
Make sales/service calls
Manage job assignments
Respond to outages
Receive training
Analyze performance
© 2011 SAP AG. All rights reserved. 78
…and accelerate decision making…
Maintenance & Operations
Service & Support
Engineering & Construction
Sales & Marketing
Logistics & Admin
Connected
Disconnected
Real-Time
Build plants and
add network capacity faster
Bring renewable sources and
green tech on line faster
Shorten billing/collection cycles
Shorten permit times
More easily recruit, and train
Provision new customers /
services faster
Integrate new partners /
suppliers faster
Speed up parts orders / delivery
Respond instantly to changing
demand/supply conditions
Get ahead of outages,
incidents and failures
Real-time continuous customer visibility
Adopt new regulatory
requirements faster Executives
Launch new products/services faster
Report outages faster
SAP mobile solutions
for utility companies
Demo:
© 2011 SAP AG. All rights reserved. 80
How do you
bring this into
YOUR
Organisation?
© 2011 SAP AG. All rights reserved. 81
Experience of SAP Implementation !
© 2011 SAP AG. All rights reserved. 83
WHAT IF ?
Getting Back to my Question :
© 2011 SAP AG. All rights reserved. 84
I Offered you : An investment with :
>55% of investment returned after 1 year
Remainder within 6-9 months ?
Thereafter >100% p/a dividend
What if ?
© 2011 SAP AG. All rights reserved. 85
Nirvesh Sooful – CIO City of Cape Town Public Sector IT Solutions Conference - Sandton
The Benefits US$ 1 = R8
© SAP 2011 / Cell October
2011
“It is not the strongest of the
species that survives, nor
the most intelligent, but the
one that is most responsive
to change”
Charles Darwin
“Insanity is doing the
same thing over and
over again
and expecting different
results…”
Albert Einstein
Andrew Strachan INDUSTRY PRINCIPAL: UTILITIES
SAP Africa
SAP Africa
T +27-11 319 7439
F +27-11 235 6201
M +27-83-235-0152
Thank you
Questions
