Energy companies were some of the first to embrace the SAP R/3 ERP system back in the late 1990s. Since then, a lot has changed, but systems have not. Some companies refreshed their SAP Extended Central Component (ECC) ERP along the way, but the majority ‘enhanced’ their current systems and upgraded the technology without necessarily improving the functionality.
With support for ECC coming to an end, many of these companies are at a crossroads. On the one side, SAP is pushing them to move to the next version of SAP S/4HANA. On the other hand, as organizations remember the pains of initial implementation, the CIOs of these companies are facing the challenge of needing to upgrade without business buy-in, making it harder to justify and to work costs associated with the upgrade into the budget.
Others, though, are embracing the opportunity to go digital by implementing a new foundation and in doing so catalyzing a larger overarching transformation. In these cases, the business has bought in and wants to leverage the change in ERP to drive cultural change across the organization.
One of the core principles these companies have in common is a drive toward standardization. In these environments, ERP is understood as part of business infrastructure, with extremely limited customization. Simply put: The ERP is akin to an email system; it gets installed, and everyone accepts it out of the box.
This drive toward standardization also aligns with the direction SAP is moving in, including through RISE with SAP and its multi-tenant cloud offerings. SAP recommends using its system out of the box as designed; any additional functionality can leverage SAP Business Technology Platform (BTP) and its numerous pre-built partner solutions.
More than ever, energy companies require a solid foundation for rapid decision-making, enhanced understanding and analytics of their data, and timely and accurate reporting. At the same time, these companies must leverage new technologies to grow or transform their business, reduce OPEX, and improve safety. The evolution of companywide transformation, increasingly, is enabled by investment in SAP and its ecosystem partners and by adoption of emerging technology to optimize business operations and spark innovation.
The business benefits magnified when an organization can embrace the principles of harmonization and standardization include:
- Shorter close times or even continued close, which enables real-time business decisions
- Group reporting directly out of the ERP
- Integrated data along the value chain and real-time data for decision-making
- Visibility across operations
- Additional automation (e.g., consolidation, auto reconciliation and auto matching)
- User-friendly features that make interacting with the system easier and faster
- A way to influence the overall culture of the organization and attract new talent
- Lower total cost of ownership (TCO)
Energy companies are not immune to the challenge posed by an aging workforce or the related challenge of attracting fresh, forward-thinking talent. Being able to attract new employees to replace ones reaching retirement enables organizations to infuse new talent into its operations, introduce new ideas, and create a new culture for innovation, enabled by SAP S/4HANA as a foundation to fuel digital innovation outside of the core.
Along these same lines of innovating at the edge of ERP, Infosys Topaz is an AI-first set of services, solutions, and platforms that fully leverage generative AI technologies to develop solutions that help energy companies optimize their operations and grow responsibility while returning value to their employees, shareholders, and the community.
Besides the technology strength, Infosys Consulting has a strong track record of supporting leading organizations with business transformation. As a partner, Infosys brings a unique combination of technology, process improvement, process outsourcing capabilities, and a strong focus on sustainability.
For more information, contact the Infosys team—Michaela Greenan, Zafar Ahmed, Cullan Cotton, and Meng Chung—on LinkedIn.
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