In today’s dig­i­tal econ­o­my, util­i­ties must con­tend with shift­ing con­sumer demands, grow­ing ener­gy needs, and increas­ing reg­u­la­to­ry and com­pli­ance stan­dards. In the midst of these changes, many SAP util­i­ties cus­tomers are on the path to adopt­ing next gen­er­a­tion tech­nolo­gies, imple­ment­ing SAP S/4HANA, and migrat­ing to the cloud. 

Ahead of the SAP for Util­i­ties, Pre­sent­ed by ASUG con­fer­ence, ASUG sat down with Daniela Haldy-Sell­mann, Glob­al Vice Pres­i­dent and Head of the Ener­gy and Util­i­ties Indus­try Busi­ness Unit (IBU) at SAP, to dis­cuss the evo­lu­tion of mod­ern utilities. 

In con­ver­sa­tion, Haldy-Sell­mann reflect­ed on how she’s seen the util­i­ties sec­tor evolve in recent years, what util­i­ty-spe­cif­ic use cas­es she sees ahead for SAP’s gen­er­a­tive arti­fi­cial intel­li­gence (AI) embrace, and how SAP is help­ing its cus­tomers over­come indus­try-spe­cif­ic challenges. 

This inter­view has been edit­ed and condensed.

As you look specif­i­cal­ly at North Amer­i­can SAP cus­tomers, how has the util­i­ties indus­try changed in recent years? 

The util­i­ties indus­try in North Amer­i­ca has under­gone sig­nif­i­cant changes in recent years. One of the major chal­lenges is the increas­ing demand for renew­ables, as well as dis­trib­uted ener­gy resources (DERs), and the invest­ments required to con­nect these new gen­er­a­tional sources to the trans­mis­sion and dis­tri­b­u­tion net­works. This need for grid capac­i­ty exten­sions com­bined with the need to accom­mo­date small­er con­sumer-grade DERs with bi-direc­tion impacts is a major change area for the indus­try in North Amer­i­ca. The U.S. gov­ern­ment is rec­og­niz­ing these changes and sup­port­ing the ener­gy tran­si­tion through ini­tia­tives like the U.S. Infla­tion Reduc­tion Act and Fed­er­al Ener­gy Reg­u­la­to­ry Com­mis­sion (FERC) Order 898.

In com­mon with the glob­al indus­try, North Amer­i­can util­i­ties also still need to become more oper­a­tional­ly effi­cient while still improv­ing the cus­tomer expe­ri­ence. SAP is here to sup­port the utility’s deliv­ery of reli­able, safe and effi­cient ener­gy through our plat­forms and tighter inte­gra­tion to oper­a­tional systems.

One issue that we have seen across the globe — that didn’t hit the North Amer­i­can mar­ket as bad­ly — involves heavy price infla­tions and fluc­tu­a­tions, specif­i­cal­ly in dereg­u­lat­ed mar­kets. These have become a huge prob­lem for retail­ers. And we see that, from a mar­gin per­spec­tive, sell­ing ener­gy only is not attrac­tive any­more. There­fore, retail­ers are much more focused on cus­tomer expe­ri­ence and this we can see in inte­grat­ed mar­kets as well. Com­ply­ing with reg­u­la­tions is key to util­i­ties and manda­to­ry to par­tic­i­pate in the market.

Sim­i­lar to oth­er indus­tries, we also see miss­ing young tal­ent and a lack of qual­i­fied resources in util­i­ties; our RISE offer­ing address­es this issue as well, to allow util­i­ties to focus on their core business. 

As you speak to SAP util­i­ties cus­tomers across the globe, what are some chal­lenges that are top of mind for them?

One of the most press­ing chal­lenges they face is the inte­gra­tion of DERs. This is a recur­ring issue glob­al­ly, not just in B2B sce­nar­ios but also in B2C sit­u­a­tions where cus­tomers are feed­ing into the grid with their own ener­gy sources, such as solar panels. 

In addi­tion, there is a grow­ing need to update out­dat­ed grid envi­ron­ments and increase sus­tain­able renew­able ener­gy capac­i­ty. The demand for new cus­tomer con­nec­tions and ser­vice con­nec­tions to the grid is also a sig­nif­i­cant con­cern for util­i­ty com­pa­nies, par­tic­u­lar­ly in North Amer­i­ca, as they strug­gle to accom­mo­date these DER addi­tions with­out a sol­id tech­nol­o­gy foun­da­tion in place.

Think about incor­po­rat­ing assets on the grid that the util­i­ty doesn’t own, but pos­si­bly could lever­age in resource plans and fore­cast mod­el­ing with cus­tomer pro­grams. The one-way grid quick­ly becom­ing mul­ti-direc­tion­al is rapid­ly chang­ing the demands of utilities.

How is SAP work­ing with its util­i­ties cus­tomers to address the spe­cif­ic hur­dles and demands that they’re see­ing? How do you see cus­tomers using SAP soft­ware to address and man­age these challenges? 

SAP works close­ly with its util­i­ties cus­tomers to address their spe­cif­ic chal­lenges and demands. As a glob­al soft­ware provider, SAP offers indus­try-agnos­tic solu­tions and then cus­tomizes them to meet the spe­cif­ic needs of the ener­gy and util­i­ty indus­tries. We focus on adding indus­try ver­ti­cal­iza­tion where required to make the soft­ware rel­e­vant to our customers. 

For exam­ple, look­ing at cus­tomer expe­ri­ence (CX), SAP is invest­ing in the end-to end cus­tomer jour­ney for util­i­ties end cus­tomers by pro­vid­ing util­i­ties-spe­cif­ic add-ons for SAP Ser­vice Cloud, SAP Emarsys, or the SAP Com­merce Cloud to bet­ter serve our util­i­ty cus­tomers. But now CX is blend­ing into oper­a­tions with DERs and the mul­ti-direc­tion­al grid. CX is no longer just at the end of the com­mod­i­ty but must be embed­ded through­out numer­ous core busi­ness process­es includ­ing asset man­age­ment and field service.

Also, for field ser­vice man­age­ment (FSM), half of our cus­tomer base are util­i­ty com­pa­nies. We are ensur­ing the right resources are sent to the right loca­tions and jobs with the right equip­ment, tools, and parts so the grid oper­ates most effi­cient­ly. All using lead­ing-edge tech­nol­o­gy with AI embed­ded. Add into that, we are fur­ther devel­op­ing our indus­try-spe­cif­ic AI cas­es. Next to already exist­ing com­pu­ta­tion­al AI cas­es like out­sort­ed billing doc­u­ments or implau­si­ble meter read­ing checks, we are invest­ing into gen­er­a­tive AI cas­es like the con­ver­sa­tion­al self-ser­vice agent. We are plan­ning to deliv­er two fur­ther indus­try-spe­cif­ic cas­es for Joule in the first quar­ter of 2025, like busi­ness process excep­tion man­age­ment for util­i­ties, sup­port­ing the billing expert with guid­ance and expla­na­tions to resolve inci­dents quick­er, and a util­i­ties cus­tomer data envi­ron­ment assis­tant that helps to com­prise and receive a sum­ma­ry of each cus­tomer via Joule, to make faster and bet­ter deci­sions to increase cus­tomer satisfaction. 

Obvi­ous­ly, SAP has made a con­cert­ed effort to migrate its cus­tomer base to the cloud. As you look at the util­i­ties indus­try, what are some of the ben­e­fits that util­i­ties cus­tomers would specif­i­cal­ly see when migrat­ing to the cloud? 

There are sev­er­al ben­e­fits that util­i­ties cus­tomers can expe­ri­ence when migrat­ing to the cloud. These ben­e­fits vary for each cus­tomer depend­ing on the indi­vid­ual sit­u­a­tion/set-up. Some cus­tomers may strug­gle with a lack of resources or exper­tise to man­age their IT land­scape and data cen­ters, and with inef­fi­cient, out­dat­ed, or lengthy process­es that do not allow them to con­sume new innovations. 

In the past, our on-premis­es envi­ron­ments pro­vid­ed great flex­i­bil­i­ty, allow­ing for the exe­cu­tion and han­dling of com­plex process­es. How­ev­er, this flex­i­bil­i­ty has also led to inef­fi­cien­cies, such as the accu­mu­la­tion of unnec­es­sary cus­tom cod­ing and user exits. Changes of process­es, to accom­mo­date tech­nol­o­gy, dis­rup­tion, inno­va­tion, and the chang­ing indus­try, is now where val­ue-add is gen­er­at­ed. Mov­ing to the cloud allows us to revis­it process­es and fol­low a clean-core approach, thus deliv­er­ing inno­va­tion more effec­tive­ly to our customers.

At SAP, our focus is on enabling our cus­tomers to con­stant­ly con­sume inno­va­tion with­out the restric­tions of time-con­sum­ing enhance­ment packs or upgrades. Mov­ing to the cloud and redesign­ing core busi­ness process­es allows them to do just that. Fit-to-stan­dard is a very pop­u­lar top­ic right now; as the indus­try changes, tech­nol­o­gy must keep up while min­i­miz­ing risks.

Addi­tion­al­ly, we have observed low adop­tion of com­pu­ta­tion­al AI cas­es among our exist­ing util­i­ties cus­tomers, due to indi­vid­ual set-up of sys­tems and data silos. By migrat­ing to cloud ERP, cus­tomers can bet­ter uti­lize AI and lever­age their data across the plat­form, instead of oper­at­ing in iso­lat­ed silos. The increased speed and agili­ty are an impor­tant rea­son for us to encour­age the tran­si­tion to the cloud for our cus­tomers in the util­i­ties industry.

Let’s talk a lit­tle bit about reg­u­la­tions and manda­to­ry report­ing. How is SAP help­ing its cus­tomers with those processes? 

SAP has always pri­or­i­tized com­pli­ance with util­i­ty reg­u­la­tions, specif­i­cal­ly in Ger­many and the Unit­ed States as our biggest mar­kets, mak­ing sig­nif­i­cant invest­ments to ensure adher­ence. In the leg­is­la­tion of most coun­tries, inter-com­pa­ny data exchange process­es between the var­i­ous mar­ket part­ners in dereg­u­lat­ed ener­gy mar­kets have to com­ply to a strict­ly stan­dard­ized reg­u­la­to­ry frame­work. This means that all util­i­ties are oblig­ed to imple­ment the respec­tive mar­ket process­es and data exchange formats.

In Ger­many, we offer a com­pre­hen­sive pub­lic cloud solu­tion to man­age the mar­ket com­mu­ni­ca­tion cov­er­ing reg­u­la­to­ry requirements. 

In the U.S., a key mar­ket for SAP, we close­ly con­sid­er reg­u­la­to­ry require­ments like those set forth by FERC and have incor­po­rat­ed spe­cif­ic report­ing fields in our ERP sys­tem to ful­fill these oblig­a­tions for many decades. Our plat­form also fea­tures an open API con­cept, allow­ing for fur­ther cus­tomiza­tion and devel­op­ment by exter­nal par­ties. Specif­i­cal­ly to FERC and the changes slat­ed for Jan 2025 required by Order 898, we at SAP are work­ing hard to sup­port these changes and con­tin­ue our North Amer­i­ca focus.

In cas­es where indus­try-spe­cif­ic require­ments fall out­side of our glob­al gov­er­nance, we active­ly encour­age part­ners to con­tribute and build solu­tions that address these needs and fill in white spaces in the end-to-end process.

SAP has focused on embed­ding gen­er­a­tive AI solu­tions across its cloud suite. What util­i­ty-spe­cif­ic use cas­es and AI func­tions are you excit­ed about? 

I am excit­ed about sev­er­al util­i­ty-spe­cif­ic use cas­es and AI func­tions already in exis­tence, as men­tioned before, but there are more func­tions avail­able to util­i­ties cus­tomers, such as intel­li­gent col­lec­tions, match­ing of incom­ing pay­ments, goods received, and invoice match­ing. These are stan­dard bill-to-cash finance areas, but they remain rel­e­vant to our customers.

In the asset space, many use-cas­es we cur­rent­ly deliv­er and are adding to soon includ­ing asset health pre­dic­tion, main­te­nance opti­miza­tion, and dis­patch. Our solu­tions pro­vide ear­ly alerts about asset per­for­mance, enabling reli­a­bil­i­ty-cen­tered and proac­tive main­te­nance sched­ul­ing plans, as well as opti­miz­ing dis­patch and plan­ning for field ser­vice tech­ni­cians. We are also focus­ing on meter­ing and mar­kets, par­tic­u­lar­ly in the val­i­da­tion of impos­si­ble meter read­ing results and, in the future, with enhanced DERs. Also rel­e­vant is the top­ic of reg­is­ter­ing and man­ag­ing those DERs, as well as ener­gy forecasting.

At the Inter­na­tion­al Ener­gy and Util­i­ties Con­fer­ence in Seville this year, we intro­duced a next-gen­er­a­tion cus­tomer inter­ac­tion with a con­ver­sa­tion-dri­ven self-ser­vice agent for util­i­ties. Also, in the CX space, we offer intel­li­gent prod­uct rec­om­men­da­tions, the 360-pro­file sum­ma­ry, and a sched­ul­ing assis­tant for nat­ur­al-lan­guage mar­ket­ing analytics.

I am very pleased with the progress I am see­ing. As an SAP end user myself, I am eager to see these advance­ments in our systems.

SAP has unveiled a very promis­ing suite of sus­tain­abil­i­ty solu­tions. How are you see­ing util­i­ties cus­tomers lever­age those solutions? 

There is sig­nif­i­cant inter­est in SAP’s sus­tain­abil­i­ty solu­tions, with util­i­ties cus­tomers lever­ag­ing them in var­i­ous ways. For exam­ple, com­pa­nies across the E.U. and glob­al­ly are focus­ing on Envi­ron­men­tal, Social, and Gov­er­nance (ESG) report­ing, and we are see­ing an increas­ing num­ber of cus­tomers adopt­ing these measures. 

As an exam­ple, Pow­er­link Queens­land, which just pre­sent­ed at our event in Seville, Spain, recent­ly imple­ment­ed the SAP Sus­tain­abil­i­ty Con­trol Tow­er. Addi­tion­al­ly, OGE, a Ger­man gas sup­pli­er, is uti­liz­ing SAP solu­tions such as Green Token to track and trade ​“green mol­e­cules,” via blockchain tech­nol­o­gy. This allows them to track pro­duc­tion and capac­i­ties across Ger­many and their pipelines. A cru­cial aspect for cus­tomers like OGE is under­stand­ing the quan­ti­ty of green mol­e­cules through­out their jour­ney for accu­rate finan­cial fore­cast­ing and control.

The release of SAP Green Ledger is expect­ed to gen­er­ate even more inter­est in sus­tain­abil­i­ty solu­tions. This new offer­ing will rev­o­lu­tion­ize the inte­gra­tion of sus­tain­abil­i­ty and finan­cial report­ing by assign­ing car­bon emis­sions to prod­ucts and process­es. This shift in per­spec­tive will be a game-changer.

As you look at the util­i­ties sec­tor over­all, what are you most excit­ed about? 

The util­i­ties and ener­gy sec­tor is cur­rent­ly under­go­ing a sig­nif­i­cant shift, mak­ing it an oppor­tune time to be involved. The ener­gy tran­si­tion is becom­ing a wide­spread real­i­ty, and I am par­tic­u­lar­ly intrigued by the increased com­pe­ti­tion and its impact on improv­ing ser­vices for con­sumers. With the ener­gy tran­si­tion, con­sumers now can gen­er­ate their own ener­gy and con­tribute to the grid, while also ful­fill­ing their own ener­gy needs. We are an active part of the ener­gy transition. 

I am par­tic­u­lar­ly impressed with the devel­op­ments in mar­kets such as Aus­tralia, the UK and Japan, where ener­gy com­mu­ni­ties and dereg­u­la­tion are chang­ing the indus­try. It is also inter­est­ing to observe the chal­lenges posed by aging grid infra­struc­ture, which must be main­tained and adapt­ed to accom­mo­date new ener­gy sources.

The neces­si­ty for col­lab­o­ra­tion among gov­ern­ments, across the indus­try, and soft­ware ven­dors is evi­dent, and I find it com­pelling to see the indus­try come togeth­er to dri­ve inno­va­tion. The col­lab­o­ra­tive nature of the util­i­ties sec­tor is espe­cial­ly intrigu­ing to me, and I find it inspir­ing how much col­lab­o­ra­tion we see in the market. 

For more util­i­ty insights from SAP lead­ers, check out insights spe­cif­ic to your indus­try. To hear more from SAP for Util­i­ties, Pre­sent­ed by ASUG read our recap of the conference’s top­ics.