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. Bringing more clean and renewable sources of energy to Southern California through investments in solar delivery and battery storage as well as 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 in order 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 on-going 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’s initial implementation of SAP ERP Central Component (ECC) occurred in 2008, and the company has been an SAP customer since, building 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 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 recently discussed the SCE journey with SAP Signavio at the SAP for Utilities, Presented by ASUG conference (Oct. 9–11 in Chicago, IL). “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.
Through SAP Signavio Process Insights, SCE has been able to identify improvement opportunities in its existing SAP footprint. SAP Signavio Process Intelligence, meanwhile, has allowed SCE to executive customized mining on non-SAP systems in its ERP landscape as well. SAP Signavio Process Collaboration Hub enables cross-departmental transparency for the enterprise's published processes, also visualizing their current designs and evaluating how well they’re performing. SAP Signavio Process Explorer has accelerated SCE's ability to get the organization’s business processes framed up at a rapid pace. “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 out 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.”
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 up, SCE will begin its solution analysis phase, where McMullen and his team will go through capturing detailed business requirements, solution mapping, and fit-gap analysis, all 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 S/4 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 by leveraging SAP Signavio to map value target outcomes. And he above all stressed the importance of moving forward one step at a time. “Remember,” he said, “it’s a journey.”