Late last year, ASUG had a con­ver­sa­tion with Michael O’Donnell, Nation­al Vice Pres­i­dent of the Util­i­ties Indus­try for SAP, about how the util­i­ties indus­try is chang­ing. In our con­ver­sa­tion, we touched on the top­ic of sus­tain­abil­i­ty. We sat down with Michael again to focus on sus­tain­abil­i­ty, and to learn how SAP is work­ing with its cus­tomers in all indus­tries to make sus­tain­abil­i­ty a pri­or­i­ty. In the first part of this two-part fea­ture, we dis­cussed the role sus­tain­abil­i­ty plays in SAP strat­e­gy and the basics of its new solu­tion, SAP Sus­tain­abil­i­ty Con­trol Tower. 

This is an edit­ed ver­sion of our conversation.

Q: Why is sus­tain­abil­i­ty such an impor­tant part of SAP strat­e­gy and its portfolio?

A: If you look at our his­to­ry, we have been at the fore­front of sus­tain­abil­i­ty for many, many years. It has been part of our DNA. We’ve rat­ed num­ber one on the Dow Jones sus­tain­abil­i­ty index for the last 15 years. When you think about what we do as a com­pa­ny, help­ing to dri­ve effi­cien­cy is at our core. If you think about what sus­tain­abil­i­ty is and the whole idea of the cir­cu­lar econ­o­my, it is at the core of our busi­ness model.

I would just say that the part for us that’s been inter­est­ing over the last sev­er­al years is that all indus­tries — not just util­i­ties — are now start­ing to focus more on what it means to be sus­tain­able: the types of busi­ness prac­tices that they need to imple­ment to be sus­tain­able, and then how to effec­tive­ly report and mea­sure that sustainability.

To us at SAP, the focus has tran­si­tioned. How do we help in that jour­ney toward becom­ing more sus­tain­able? How do we help our cus­tomers mea­sure and report so they’re improv­ing and mak­ing progress in their sus­tain­abil­i­ty journey?

Q: Can we talk about SAP Sus­tain­abil­i­ty Con­trol Tow­er and how it helps customers?

A: Let me start by say­ing this: the word ​“sus­tain­able” comes up all the time in con­ver­sa­tion, but it can mean dif­fer­ent things. The con­tex­tu­al­iza­tion of the word and how we go about ​“doing sus­tain­abil­i­ty” is inter­est­ing. Because I would say that SAP Sus­tain­abil­i­ty Con­trol Tow­er is real­ly about the gath­er­ing, the mea­sure­ment, and how you report out that data. In the util­i­ties indus­try, there are all sorts of dif­fer­ent gov­ern­ment reg­u­la­tions that need to be met. We’re help­ing orga­ni­za­tions meet the stan­dards of these regulations.

Our entire busi­ness mod­el is shift­ing so we can actu­al­ly oper­ate and run in the cloud. Look at RISE with SAP. That offer­ing is help­ing our cus­tomers evolve into the next iter­a­tion of SAP. That mod­el sets our cus­tomers up to dri­ve the type of results they want from a sus­tain­abil­i­ty per­spec­tive. Think of SAP Sus­tain­abil­i­ty Con­trol Tow­er as the mea­sur­ing and report­ing. And there’s oth­er stuff in there from a finan­cial per­spec­tive, but a lot of it focus­es on that data. Help­ing our cus­tomers move to SAP S/4HANA Cloud via RISE with SAP, and fun­da­men­tal­ly chang­ing the way they deploy, oper­ate, run, and main­tain the solu­tion — in a much more iter­a­tive, quick­er fash­ion than they his­tor­i­cal­ly have with on-premise sys­tems — is excit­ing. That’s the part that’s going to dri­ve the effi­cien­cy, which equals sustainability.

Q: In the 2022 ASUG Pulse of the SAP Cus­tomer study results, sus­tain­abil­i­ty was one of the top five cus­tomer focus points for this year. How is SAP con­tin­u­ing to make sus­tain­abil­i­ty a key focus for all of its cus­tomers mov­ing forward?

A: Essen­tial­ly, what’s hap­pened out there — and this is not unique to util­i­ties — is that orga­ni­za­tions have final­ly made the deci­sion to put a line in the sand. Whether they want to be car­bon zero by 2030, 2040, or 2050, they put that goal out there, and now they need to fig­ure out what needs to hap­pen to reach that goal. I think peo­ple have always want­ed effi­cient work process­es that are sus­tain­able and good for the envi­ron­ment. But I think with every­thing that tran­spired in the last few years around the focus on cli­mate change and then the Paris Agree­ment, orga­ni­za­tions under­stand what the impli­ca­tions are of avoid­ing this issue now.

We have seen some struc­ture set up around sus­tain­abil­i­ty. The work SAP has been doing with our cus­tomers is fig­ur­ing out how to oper­a­tional­ize sus­tain­abil­i­ty goals and get things in place. There are all sorts of inno­va­tions that need to hap­pen in the util­i­ties space regard­ing how elec­tric­i­ty gets gen­er­at­ed, how it’s dis­trib­uted to con­sumers, and all the dif­fer­ent things that go in that val­ue chain and how that gets done.

Fig­ur­ing out how to do things sus­tain­ably adds anoth­er lay­er to an organization’s oper­a­tions that cre­ates a sig­nif­i­cant chal­lenge. In the util­i­ties indus­try, hav­ing a cen­tral­ized gen­er­a­tion facil­i­ty that then sends the trans­mis­sion dis­tri­b­u­tion out to con­sumers prob­a­bly isn’t the most sus­tain­able mod­el. Now, you see this move­ment toward dis­trib­uted ener­gy resources such as wind, solar, and bat­tery pow­er. These are all fac­tors in what the future of their grid will look like. Work­ing with our cus­tomers and help­ing them plan effec­tive­ly on how to deploy, run, and man­age every­thing that needs to be done from an effi­cien­cy per­spec­tive is a real focus. Then, it’s about tak­ing all the data that’s com­ing from all these dif­fer­ent devices and pieces of tech­nol­o­gy, and using it to under­stand the car­bon foot­print. It’s a huge task and focus for us as a company.

Q: When you’re talk­ing with util­i­ties cus­tomers, what are their views on sus­tain­abil­i­ty? What steps are they tak­ing to make their orga­ni­za­tions more sus­tain­able enter­pris­es? What is the mind­set of the cus­tomer base?

A: There’s the long-term strate­gic view. Util­i­ties orga­ni­za­tions do a lot of long-term plan­ning. We’ve already touched on some of those fun­da­men­tal things that they’re work­ing on, such as how to make the gen­er­a­tion end of the equa­tion clean and green.

We’ve also done a lot of work on the sup­ply chain piece of the equa­tion. When you think about SAP Ari­ba and that whole end-to-end process of sourc­ing and con­sum­ing all the mate­ri­als need­ed to help effec­tive­ly run and oper­ate a util­i­ty, there’s a lot of out­put from oper­at­ing a util­i­ty that usu­al­ly pro­duces quite a bit of car­bon. Hav­ing those con­sid­er­a­tions inte­grat­ed into that whole process is vital to dri­ve down your car­bon foot­print and to source nec­es­sary materials.

We’ll be hav­ing more con­ver­sa­tions exact­ly like this one Sep­tem­ber 18 – 20 at the SAP for Util­i­ties con­fer­ence pre­sent­ed by ASUG. Reg­is­ter for either in-per­son or vir­tu­al atten­dance.