One of the largest elec­tric util­i­ties in the Unit­ed States, serv­ing approx­i­mate­ly 15 mil­lion Cal­i­for­nia res­i­dents across a 50,000-square-mile area, South­ern Cal­i­for­nia Edi­son (SCE) is a nation­al leader in mod­ern­iz­ing the elec­tric grid. By bring­ing more clean and renew­able ener­gy sources to South­ern Cal­i­for­nia through invest­ments in solar deliv­ery and bat­tery stor­age and ini­tia­tives relat­ed to green­er trans­port and elec­tric vehi­cles, SCE is com­mit­ted to dri­ving the future of ener­gy forward. 

Inter­nal­ly, the util­i­ty is under­go­ing a dig­i­tal trans­for­ma­tion to SAP S/4HANA to mod­ern­ize its oper­a­tions, improve effi­cien­cies, enhance cus­tomer ser­vice capa­bil­i­ties, and take on oth­er key chal­lenges in the evolv­ing ener­gy landscape. 

As part of that ongo­ing trans­for­ma­tion, SCE is devel­op­ing a foun­da­tion­al set­up for process opti­miza­tion and design, lever­ag­ing data ana­lyt­ics and gov­er­nance with SAP Sig­navio, and build­ing a dis­ci­pline for con­tin­u­ous process improve­ment — all part of an orga­ni­za­tion-wide effort to align strat­e­gy with tech­nol­o­gy and build resilien­cy across operations. 

Reimag­ine, Re-Envi­sion, Redesign

SCE start­ed using SAP ERP Cen­tral Com­po­nent (ECC) in 2008. Since then, the com­pa­ny has built up a two-tier SAP land­scape involv­ing back-office finance, sup­ply chain, human cap­i­tal man­age­ment, asset man­age­ment, cus­tomer man­age­ment, and work man­age­ment. ​“We have pret­ty much all our core busi­ness process­es run­ning through SAP,” said Teri­no McMullen, Prin­ci­pal Man­ag­er – NextGen ERP — Tech­nol­o­gy Inte­gra­tion at SCE.

Today, SCE’s jour­ney involves upgrad­ing its ERP sys­tem to SAP S/4HANA. ​“We see this as an oppor­tu­ni­ty to com­plete a busi­ness trans­for­ma­tion, as opposed to a tech­ni­cal lift and shift,” McMullen said. ​“We haven’t under­tak­en any major busi­ness process engi­neer­ing efforts since our 2008 imple­men­ta­tion, so this is a chance to reimag­ine, re-envi­sion, and redesign, posi­tion­ing the com­pa­ny for our go-for­ward strategy.”

SCE recent­ly com­plet­ed a year-long ​“solu­tion plan­ning” phase of its SAP S/4HANA busi­ness trans­for­ma­tion, accord­ing to McMullen, who dis­cussed the SCE jour­ney with SAP Sig­navio at the SAP for Util­i­ties, Pre­sent­ed by ASUG con­fer­ence in 2024. ​“Our mis­sion was twofold: to find a val­ue case for S/4HANA, and to then deter­mine with­in that if our path was akin to a tech­ni­cal upgrade or a busi­ness trans­for­ma­tion,” he said. 

A Phased Approach

Once SCE con­clud­ed that a process-cen­tric trans­for­ma­tion would accel­er­ate inno­va­tion at the com­pa­ny while dri­ving clear busi­ness out­comes, call­ing this jour­ney ​“its NextGen ERP pro­gram,” the orga­ni­za­tion zeroed in on the need to estab­lish a busi­ness process intel­li­gence suite. SAP Sig­navio was select­ed due to its suite’s ​“robust, end-to-end set of capa­bil­i­ties,” accord­ing to McMullen, as well as its ease of use and the avail­abil­i­ty of its pre-pack­aged con­tent and val­ue accelerators.

• SAP Sig­navio Process Insights has helped SCE iden­ti­fy improve­ment oppor­tu­ni­ties in its exist­ing SAP footprint.
• SAP Sig­navio Process Intel­li­gence has allowed SCE to exe­cute cus­tomized min­ing on non-SAP sys­tems in its ERP landscape. 
• SAP Sig­navio Process Col­lab­o­ra­tion Hub enables cross-depart­men­tal trans­paren­cy for the enter­prise’s pub­lished process­es, visu­al­iz­ing their cur­rent designs, and eval­u­at­ing their performance. 
• SAP Sig­navio Process Explor­er has accel­er­at­ed SCE’s abil­i­ty to frame the organization’s busi­ness process­es rapidly.

“It gives us that sin­gle source of truth, by being able to have a very trans­par­ent, enter­prise-wide view of our core busi­ness process­es,” McMullen said.

Build­ing out busi­ness process­es that would fall with­in the ini­tial scope of busi­ness trans­for­ma­tion was a pri­or­i­ty at SCE, and three days of work­shops allowed the team to build a busi­ness process hier­ar­chy that cov­ered 281 process­es and involved 40 stake­hold­ers from across the company.

“We were able to give peo­ple a demo-based train­ing with SAP Sig­navio in two hours or so,” McMullen recalled. ​“By the end of the first train­ing day, they were work­ing in Sig­navio on all our busi­ness process hier­ar­chy, devel­op­ment, and design work. No Post-Its, no stick­ies, no white­board — it was all in the tool.”

Ini­tial Successes

Estab­lish­ing a busi­ness process hier­ar­chy has been one major suc­cess of SCE’s first year with SAP Sig­navio. McMullen also dis­cussed the impor­tance of iden­ti­fy­ing 65 val­ue tar­get out­comes and map­ping those to spe­cif­ic process­es while achiev­ing an inte­grat­ed view through the tool. 

“The ben­e­fits of being able to break down our oper­at­ing mod­el into a process struc­ture and hier­ar­chies has allowed us to go and real­ly start look­ing at who the process own­ers are, who the right stake­hold­ers are for the trans­for­ma­tion jour­ney, and how we can estab­lish a gov­er­nance struc­ture around that,” he said.

Next, SCE will begin its solu­tion analy­sis phase. McMullen and his team will cap­ture detailed busi­ness require­ments, solu­tion map­ping, and fit-gap analy­sis while refin­ing the val­ue case for SAP S/4HANA and prepar­ing that for a board-lev­el busi­ness case. From there, SCE will progress into the ERP imple­men­ta­tion phase. 

Along the way, McMullen is also look­ing for­ward to lever­ag­ing oth­er SAP Sig­navio capa­bil­i­ties for val­ue jour­ney man­age­ment and process conformance.

Peo­ple, Process, Tech­nol­o­gy, and Data

At SCE, the NextGen ERP pro­gram is mov­ing for­ward with var­i­ous assess­ments that will con­tin­ue to set the stage for its busi­ness trans­for­ma­tion, even as the com­pa­ny seeks to ral­ly oth­ers to its cause. ​“We’re build­ing out a very capa­ble and tal­ent­ed team,” McMullen said. ​“As we look to the ASUG com­mu­ni­ty, we have oppor­tu­ni­ties for tal­ent­ed indi­vid­u­als to join one of the largest ERP mod­ern­iza­tion efforts that will be run­ning over the next few years in the util­i­ties space.”

Reflect­ing on lessons learned through SCE’s jour­ney thus far, McMullen stress­es the impor­tance of defin­ing your SAP S/4HANA ERP trans­for­ma­tion scope and approach. ​“Every­thing at SCE is around a process-dri­ven trans­for­ma­tion,” McMullen said. ​“We see our S/4 busi­ness trans­for­ma­tion as an oppor­tu­ni­ty to not only trans­form via a process-cen­tric approach but to also go in and look at how we oper­ate cross-func­tion­al­ly and how we enable technology.” 

That focus on busi­ness process improve­ment has made SAP Sig­navio invalu­able. ​“We have to mar­ry peo­ple, process, tech­nol­o­gy, and data, and Sig­navio gives us an oppor­tu­ni­ty to make it be a fact-based, data-dri­ven improve­ment effort,” he said. ​“We can go through and pri­or­i­tize oppor­tu­ni­ties based on where the data oper­ates, and where the data demon­strates that there are val­ue or improve­ment oppor­tu­ni­ties. To be able to see how trans­for­ma­tion involves end-to-end busi­ness process­es, and that things have to work both upstream and down­stream for val­ue oppor­tu­ni­ty and real­iza­tion to occur, is major.”

McMullen also rec­om­mend­ed mon­e­tiz­ing and pri­or­i­tiz­ing trans­for­ma­tion oppor­tu­ni­ties, includ­ing lever­ag­ing SAP Sig­navio to map val­ue tar­get out­comes. Above all, he stressed the impor­tance of mov­ing for­ward one step at a time. ​“Remem­ber,” he said, ​“it’s a journey.”