short presentation title · 2017-04-10 · utilities on sap s/4hana – capability and value...

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 1 Public

Transform Utilities with SAP S/4HANA®

S/4HANA


AGENDA

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Utilities on SAP S/4HANA – Capability and Value Proposition Overview

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Customer Engagement, Billing, and Revenue Management Deep-Dive

Operational Excellence for Plants and Grids Deep-Dive

Financial Control Deep-Dive

SAP S/4HANA Solution Portfolio for Utilities

Value Proposition

15 Customer References


Today’s digital economy, there is immense pressure on utilities to do more for less. Utilities are facing new price pressures and competitive threats. New entrants into the marketplace have changed the way utilities deliver services, forcing them to adopt new approaches or face stagnant or declining revenue growth and margins. Digitalization of three fundamental elements – customer engagement, asset management, and financial optimization – is forcing utilities to rethink their business models and focus on how to drive revenue growth without corresponding growth in their employee base – or, in other words, drive nonlinear growth. This new digital reality has a complex impact on utilities. On the one hand, digitalization drives a great deal of transparency and increasingly demystifies service offerings. It also fundamentally lowers the barriers to entry for a new breed of competitors. On the other hand, digitalization provides utilities with the perfect opportunity to leverage the digital energy network and rethink their interactions with customers. It allows them to scale their businesses in ways they could never imagine. It is important to recognize that, at the heart of all the threats, lies opportunities and digitalization is the best way to seize these opportunities, as it will allow utilities to serve their customers better than ever before.

To succeed, firms will need to put in place a coherent digital vision with clearly articulated offensive and defensive strategies. In particular, they will need to address emerging business models, such as driving new energy services, providing utility-as-a-service, and managing distributed energy sources. To execute on this, utilities will not only need to reengineer their business processes, but they will also have to evaluate if they have the right technology platform that can deliver on that vision. This platform requires an IT architecture that provides both stability and long-term reliability for core enterprise processes and where change is happening on a constant basis – we call this a “bi-modal architecture.” The digital core is the foundation for the core processes that need to run consistently and flexibly. It provides uninterrupted, real-time transactions and analytics, the ability to work with Big Data, and connectivity to line-of-business (LoB) extensions that enable supporting processes such as advanced customer engagement and enhanced energy services. SAP S/4HANA® was specifically developed to represent the digital core in this “bi-modal IT architecture.” It provides utilities with a proven framework to adopt industry best practices while attaining operational excellence – specifically across core customer engagement, asset management, and financial processes.

Farys invested in SAP S/4 HANA to turn the complexity of its new multicompany existence into a straightforward way for nontechnical end users to access the information they needed.

Transform your Firm’s Digital Core with SAP S/4HANA®

UTILITIES ON SAP S/4HANA OVERVIEW

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CILE SAP S/4HANA Finance offers CILE greater flexibility with the general ledger, simplicity of controls, support of outcome-based business models, and a correct overview of its inventory at all times.


Customer Engagement, Billing and Revenue Management

Operational Excellence for Plants and Grids

Finance

• Marketing, sales, and service management

• Omnichannel customer interaction

• Meter and grid operations

• Billing of energy and nonenergy services

• Comprehensive credit and collections

• Finance integration and audit support

• Bid and proposal management

• Project management

• Time and expense management

• Resource management

• Collaboration and knowledge management

• Contract to cash

• Accounting and financial close

• Accounts payables and invoice management

• Cash and liquidity management

• Enterprise risk and compliance management

• Real estate and treasury management

• Helping ensure complete data across the general ledger, sub-ledgers, and logistics

SAP S/4HANA Sources of Value The value from SAP S/4HANA comes through simplification of the user experience, architecture, and process. Simplified User Experience: Across all Devices SAP S/4HANA empowers call-center agents and field workers with an end-user centric, consumer-grade experience because, for utilities, it’s the call-center agents that add value to customer engagement and field workers delivering operational excellence. SAP is driving simplification and innovation in how business users work with a role-based, consistent user experience available on any device. Simplified Architecture: No Aggregates, No Redundancies SAP S/4HANA’s simplified data model provides an advanced digital data architecture that provides, in real time, a single source of the truth for both transactions and analytics. This enables extensive flexibility to adapt to changing business models – for example, simulating the impact of business reorganizations in minutes rather than days. Simplified Processes: Key SAP S/4HANA Capabilities for the Utilities Industry


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*This is a subset of the complete industry portfolio shown later in the “SAP S/4HANA Solution Portfolio for Utilities” section.


EXAMPLE: User Experience Simplification SAP S/4HANA enables an anywhere, any-device, mobile-first, role-based user experience that simplifies and enhances employee engagement and productivity, transforming the way customer engagement, billing, and revenue management gets done.

SAP S/4HANA for Use in Customer Engagement, Billing, and Revenue Management

Traditional ERP

• Multiple island solutions for products, marketing, sales, and services

• Lack of granularity for billing, invoicing, and collection process

• Loosely integrated self-service • Reporting built per application

area, not across it

More than smarter and faster – reimagining work

SAP S/4HANA

An intuitive user experience on any device, providing a single consolidated source of truth for all customer-related information at the lowest level of granularity Fully integrated end-customer engagement for all channels Joined invoicing for all products and services Faster and better processing through enhanced capabilities of SAP S/4HANA

Product definition

Marketing

programs

Sales

Sales reporting | Billing

reporting | Cost/revenue

reporting

Cross-product and

cross-service

reporting

One single point of entry Complete business partner transactional details

End-to-end billing, invoicing, and collection

Cross-product and cross-services analytics

Master project


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Self-service

Billing Invoicing Collections Extract to

warehouse

2%–5% increase Customer satisfaction

Significant increase New products and services

50% reduction Self-service complexity


Typical Challenges Traditional ERP SAP S/4HANA Enhancements Benefits

Difficulty in getting customer history

information, which could lead to customer

churn and a subsequent loss of revenue

Inability to consolidate customer information

and ensure accurate, up-to-date customer

data

Provides single, consolidated view of customer

information through integration with the SAP®

Hybris® Marketing solution

Improved customer service

Increased user productivity

Reduced time to propose

Increased detailed understanding of customer

Increased profitability

Increased end-customer satisfaction by providing effective self-service

Multiple, disparate front-end solutions with

incomplete integrations lead to organization,

not meeting its full revenue potential

Using multiple or different transactions and

systems

Provides an anywhere, any-device, mobile-first,

role-based user experience that simplifies and

enhances employee engagement and

productivity

Difficult to capture and utilize detailed

measurement data from devices in the home

or offices of the customer, like thermostats

or other sensors, smart switches, and so on

Inability to process large amounts of time-

series data for real-time business decisions

Relevant data is often distributed over multiple

or different backend solutions.

Ability to store, access, and analyze structured

and unstructured data in real time to drive

decisions on the spot

Limited ability to analyze and understand

which products and services are profitable

and which products and services are not

Difficult to report profitability easily across all

services due to information held in different

reports and/or lack of reporting attributes

Provides easy analysis of all services and

identification of profitable service lines and

customers with flexible reporting attributes

Difficult to provide customers the ability for

self-service with a consistent view of their

information across all channels, including

the call center

communication channel with latencies for data

updates

Only providing a limited number of processes

per channel

Provides one source for all channels, allowing

real-time updates to be visible immediately to

all parties

Provides all end-customer relevant processes

to all channels

CUSTOMER ENGAGEMENT, BILLING, AND REVENUE MANAGEMENT

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Time- and/or condition-based inspection and maintenance Real-time risk of failure and performance not known No optimization of cost, risk, and performance

EXAMPLE: SAP Predictive Maintenance and Service The SAP Predictive Maintenance and Service solution provides real-time health information of assets based on critical values and trends, thus allowing the most efficient asset maintenance strategies for better managing cost, risk, and performance.

SAP S/4HANA and SAP Predictive Maintenance and Service Provide Operational Excellence for Plants and Grids


SAP S/4HANA and SAP Predictive Maintenance and Service

SAP Predictive Maintenance and Service allows for real-time monitoring of asset health and predicting failure before it happens. Maintenance orders are triggered just in time, avoiding unnecessary inspections and decreasing cost and risk of unplanned failure.

Traditional ERP


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Maintenance Inspection triggers maintenance

Inspection Time-based inspection planning

-44% Lower unplanned downtime* -17%

Lower annual service and maintenance costs* +28% Higher return

on assets*

Maintenance schedule based on real-time asset health status and failure prediction

Asset health monitor

Maintenance

*Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP system to enhanced SAP S/4HANA + LoB/cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise.


Typical challenges Traditional ERP SAP S/4HANA Enhancements Benefits*

Lack of real-time view into maintenance

activities, asset performance indicators, and

health and safety information, which hinders

timely decision-making

Multitiered landscape consisting of the SAP

ERP application, additional ERP extensions,

and business-intelligence solution makes it

challenging to obtain real-time view of

maintenance activities as well as health and

safety information

Real-time view for planners into ongoing

maintenance activities with the ability to

reschedule multiple times a day in order to

better plan and schedule maintenance

activities and achieve higher efficiency

Increased return on assets

Decreased unplanned asset downtime or outages

Improvements in operational efficiency

Reduced service and maintenance cost

Increased first-time fix rate

Reduced warranty cost

Reduced EH&S management costs

Reduced accident and incident rate

Increased EH&S compliance

Reduced penalties and fines

Limited ability to analyze data by machines

and sensors

Analysis of asset performance and EH&S information is based on past performance, lagging indicators, which increases the time to identify potential activities that can improve asset performance or reduce health and safety risks

Improved performance of many transactions,

such as scheduling of maintenance plans and

material requirements

Inability to proactively plan maintenance

activities and predict asset failure and spare

parts requirements

Maintenance of assets is scheduled based on

asset conditions captured through asset

inspections

Native integration of incident management and

health and safety management with role-based

intuitive user interface as well as embedded

analytics

Inability to develop proactive safety measures

Sophisticated analytics are disconnected from

real-time operational data, preventing a

proactive maintenance strategy

SAP S/4HANA integrated with the SAP

Predictive Maintenance and Service solution

as well as SAP Asset Intelligence Network

to share and learn best practices on

installation, usage, and performance of

equipment between various stakeholders

Information sharing of asset information is only

possible via direct interfaces, making it difficult

to achieve effective collaboration among the

stakeholders

SAP Predictive Maintenance and Service

enabling understanding of real-time health

status of assets based on critical values and

trends in order to predict upcoming problems,

allowing implementation of the most efficient

maintenance strategies


OPERATIONAL EXCELLENCE FOR PLANTS AND GRIDS

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EXAMPLE: Process Simplification SAP S/4HANA provides reengineered and simplified business processes that can yield significant benefits, transforming the execution from multistep, batch-driven processes with latency in terms of key performance indicators to real-time processes with actionable insights to accelerate invoice processing, increase cash flow, and protect revenue assurance.

SAP S/4HANA Revenue Assurance for Account Payables and Receivables Managers

Traditional ERP

• Multiple batch processes and manual worklist creation


SAP S/4HANA

Analysis available anytime in real time with lowest level of detail

Analyze and prioritize overdue items

and write-offs and create worklists in one

step


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5%–10% increase End-to-end process efficiency

20%–40% increase User productivity

40%–50% reduction Days sales outstanding

Manager initiates report to analyze overdue invoices and write-offs

Create list

Manager prioritizes critical invoices for further processing

Business user processes clarification of invoice

Create manual worklist

Business user processes

clarification of open items


Typical challenges Traditional ERP SAP S/4HANA Enhancements Benefits*

Delayed close activities do not begin until

period end.

Periodic batch processes are required to

provide realized revenue and margin reporting

and not provided at detailed level.

Foundation for soft close – for example, real-

time derivation of profitability characteristics,

single source of the truth, extension ledger

20%–40% reduction in audit cost*

40%–50% reduction in days to close annual books*

20%–40% reduction in general ledger and financial closing costs*

5%–10% reduction in business and operations analysis and reporting costs*

Effort-intensive reconciliations and

eliminations are performed, preventing an

accurate intra-period depiction of the

organization’s performance.

Multiple ledgers and subledgers are utilized that require time- consuming and error-prone reconciliations.

Foundation for soft close – for example, real-

time derivation of profitability characteristics,

single source of the truth, extension ledger

Multiple batch-run dependencies cause

bottlenecks that delay downstream

activities.

Frequent delays in batch processing and post-

close activities create protracted cycle times.

Real-time processes such as revenue

recognition, profitability analysis, cash

allocation, and working capital analysis

Visibility into reporting is delayed as data is stored across multiple ledgers.

Disparate ledgers without integration create

accounting blind spots.

Predefined reports and configurable reporting

tools to leverage general ledger, subledgers,

and consolidation apps – central finance

function that integrates all ledgers and

subledgers into one source of the truth

Accounts payable and receivable managers

need immediate and current overview of

overdue items, write-offs and processing

locks as basis for efficient clearing of critical

items.


have to initiate various batch reports to

prioritize items and to create worklists for the

further processing of critical items. Managers

have to manually monitor the progress of the

created worklists.

Specific SAP Fiori® app that enables real-time

analysis of critical open items and write-offs

and processing locks, which allows immediate

creation of worklists for further processing – a

specific app allows continuous monitoring of

these worklist items in real time

The consequent monitoring of the collection

success requires the consistent analysis of

dunning processes based on most current

data.


lack consolidated overviews of the current

success rate of dunning notes and effective

follow-up tools.

Specific SAP Fiori app that provides an

overview of the collection success (in

percentage) within a certain time frame or

related to a various dunning procedures and

dunning levels

Manual inconsistent processes are used

for billing business solutions comprising

services, products, and projects. High effort

is needed to bring all data into one invoice

Adjustment and correction of invoices require

the cancellation of the legal invoice and

creating another billing run.

Flexibility for adjusting invoice to client

expectations is lacking.

Batch-driven billing processes directly invoice

billable data available at a given time.

Combination of different billable data into one

preinvoice in an automated way


FINANCE

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In addition to customer engagement, asset lifecycle management, and financial control benefits provided by SAP S/4HANA, the digital core also provides native pre-built integration to allow firms to leverage SAP’s complete portfolio of solutions to comprehensively address their needs demanded by today’s digital economy. Processes are designed from the outset to flow end to end across the cloud-based solution extensions, listed in the white bands, and are fully integrated to the SAP S/4HANA Enterprise Management solution and are optionally deployed to address business needs. The solution capabilities in the dark blue band, the digital core, are delivered as part of SAP S/4HANA Enterprise Management. The lighter blue band, also in the digital core, are part of SAP S/4HANA Enterprise Management but added on as needed.

Digital Core

Products

Suite

Products

Suite

Enterprise Management

SAP S/4HANA SOLUTION PORTFOLIO FOR UTILITIES

• Fuel management • Scheduling and load

management • Sustainability

Energy Supply optimization

• Sustainability management

• Mobile asset management • Predictive maintenance and

service • Asset information

collaboration

Operational Efficiency for plants and Grids

• Environment, health, and safety

• Asset operations and maintenance

• Meter lifecycle management

• Meter data management and operations

Metering

• Meter administration and operations

• Energy data management

• Cloud for marketing • Cloud for sales

Customer Engagement

• Meter to cash for energy and water

• Nonenergy billing (SAP Hybris Billing)

• Bill to cash for energy and water

• Bill to cash for energy services • Omnichannel commerce and

subscription billing

Billing and Revenue Management

• Bill to cash

• Accounting and closing operations

• Accounting • Cost management and

profitability analysis

SAP S/4HANA SALES

SAP S/4HANA sales

• Governance, risk, and compliance for finance

• Operational purchasing • Collaborative sourcing and

contract management • Invoice and payables

management • Supplier management • Procurement analytics

SAP S/4HANA sourcing AND procurement

• Supplier collaboration • Business network • Guided end-user buying • External workforce

management

• Time recording

SAP S/4HANA human resources

• Core human resources and payroll

• Talent management • Time and attendance

management • Human capital analytics

• Order and contract management

• Maintenance management

• Financial planning and analysis • Accounting and financial close • Treasury management • Receivables management • Invoice management and

accounts payable

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Utilities need to manage the end-to-end lifecycle of service delivery. Engaging with customers continues to be important and challenging for both regulated and deregulated utilities. The challenge is twofold – requirements change quickly, and it can be difficult to continue matching them to the possibilities provided by IT. E-commerce, social media, and omnichannel are terms that are becoming more and more relevant for utilities.

Time-series or discrete data needed for billing

Product configuration for billing

Billing for all products and services

Contract, financial details, and so on

Flexible, customer-specific credit, payment, and collections processes

Product and services

Billing-relevant data

Commercial data

Billing Invoicing Collection

Convergent invoicing for one invoice to the customer

Sales and Service, Customer Profile, Next-Best Action

Internet of Things (IoT) Enterprise Management

Demand Include External Data

Digital core

Customer Engagement Management

Historic consumption data and real-time view

Develop talent based upon needed skills

Any channel

360-degree view, profile

Leverage 360-degree customer profile for next best action, recommendations, and so on

Call center, interactive voice response, and self-service all access the same data

Integrating IoT data from metering devices and other external sources

All channels supported to view data and transact as appropriate

An End-to-End Solution for Utilities


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Consumption data

Sensor data, and so on


Utilities need to manage the end-to-end asset lifecycle, from building the assets to meeting energy demands, while efficiently and safely operating these assets through end of life. The business capabilities delivered with SAP S/4HANA, along with prebuilt native integration with LoB solutions, help ensure the process runs smoothly and efficiently across the end-to-end, total asset lifecycle management. SAP S/4HANA allows utilities to balance supply and demand, incorporate predictive maintenance analytics and drive sustainable revenue growth while maintaining profitability.

Project and systems management

Analyzing bids and contractor engage-ments

Delivering operational excellence and safety

Starting up and manage the as-built configura-tion

End of life

Plan and design

Procure and build

Commission Operate Maintain Decommission

Real-time IoT predictive maintenance

Business Development Supply Chain Enterprise Management

Build Maintain

Digital core

Operational Excellences for Plants and Grids

Leverage talent networks for planned outage and special skills

Deliver IoT-based predictive analytics

Opportunity and risk insight

Cost management

Track real-time costs vs. budget

Manage opportunity and risks while gaining a 360-degree asset view

Opportunity integrated with bid in SAP S/4HANA Predictive maintenance and service utilities add-on integrated into SAP S/4HANA process

An End-to-End Solution for Utilities


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Third-party labor

Predictive maintenance and service


Strategy Enablement Business Benefits*

• Obtain a 360-degree view of the customer • Accelerate creation of new business models • Enter new energy markets and services • Accelerate M&A synergy • Run live (SAP Digital Boardroom) • Achieve greater speed and agility • Run Simple (master complexity) • Manage risk and help ensure

compliance • Optimize energy consumption

• ROI in the first year through cost avoidance and productivity improvements

• Convergent billing and invoicing unifies billing for any kind of commodities and services

• Up to 10% increased project manager productivity • 25%–50% increase in utility field worker productivity • Single, real-time view of plant and business performance with

real-time analysis of asset performance • 5%–10% reduction in business and operations analysis and

reporting costs • 40%–50% reduction in days to close annual books • 20%–40% reduction in general ledger and financial-closing

costs • 20%–40% reduction in audit costs

Empowered Employees IT Benefits and Total Cost of Ownership

• Establish finance as a partner for strategic decisions instead of just for “collecting numbers”

• Increase in billing and revenue management productivity and faster adoption through user-tailored UIs enabled by SAP Fiori

• Reduced data footprint • Merging of online analytical processing and online transaction

processing • Elimination of many desktop clients • Lower testing costs • Simplified landscapes • Native integration

SAP S/4HANA provides utilities a proven framework to adopt industry best practices while attaining operational excellence across customer engagement management, asset lifecycle management, and financial processes.

Strategy enablement

Business benefits

Empowered employees

IT benefits and total cost of ownership


SAP S/4HANA – UTILITIES VALUE PROPOSITION

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Farys Farys is going through a big digital transformation in its growing and complex water business: SAP Business Suite powered by SAP HANA and SAP S/4HANA Finance are Farys’ new platform and foundation for long-term performance. Farys needed to leverage some of the new capabilities offered by SAP S/4HANA Finance – notably asset accounting and new general ledger capabilities that can be turned on for live postings in real time.

CILE In order to maintain compliance with international quality standards, to respond to the geographic expansion of the company, and to increase and improve the mutual coordination of all the processes it uses, CILE had to thoroughly overhaul its IT environment. A key driver to move to SAP S/4HANA is the need to support new business models and a correct overview of their inventory at all times. SAP S/4HANA Finance offers CILE greater flexibility with the general ledger, simplicity of controls, and support of outcome-based business models.

Company Farys Industry Utilities SAP solutions SAP S/4HANA Finance SAP Fiori UX Customer Web site www.farys.be Click here for the source reference

Company CILE Industry Utilities SAP solutions SAP S/4HANA Finance Customer Web site www.cile.be Click here for the source reference

CUSTOMERS ARE ACHIEVING VALUE FROM SAP S/4HANA

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http://www.farys.be

http://sapevents.be/FID/presentations/2.4 _ FID_CapGemini_Wanda Mertens.pdf

http://www.cile.be

http://www.flexso.be/en/blog/een-geintegreerd-bedrijfsproces-dankzij-sap-s4hana/


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short presentation title · 2017-04-10 · utilities on sap s/4hana – capability and value...

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