Gain insights from Jeff Briner, a Prin­ci­pal with Price­wa­ter­house­C­oop­ers (PwC), in its SAP prac­tice; he is the Dig­i­tal Sup­ply Chain Capa­bil­i­ty leader.

Dig­i­tal trans­for­ma­tion will bring util­i­ties into the future, enabling providers of our world’s most essen­tial ser­vices to improve busi­ness process­es and har­ness clean ener­gy while reduc­ing dis­rup­tion, respond­ing to mar­ket trends, and com­ply­ing with evolv­ing reg­u­la­to­ry requirements.

For today’s North Amer­i­can util­i­ties, com­plet­ing the clean-ener­gy tran­si­tion will require more than indus­try-stan­dard main­te­nance. Indeed, mod­ern­iz­ing exist­ing infra­struc­ture by shift­ing to SAP S/4HANA Cloud while inte­grat­ing renew­able ener­gy sources will require sig­nif­i­cant busi­ness shifts. 

The race is on for util­i­ties to trans­form their oper­a­tions while main­tain­ing peak per­for­mance. And by and large, those who pull ahead in this race can do so by invest­ing in three key areas: data, process, and peo­ple.

1. Data

Data gov­er­nance should be a pri­or­i­ty for util­i­ties approach­ing dig­i­tal trans­for­ma­tion. Even beyond the tech­ni­cal val­ue of data cleans­ing and val­i­da­tion before migrat­ing from lega­cy sys­tems to cloud ERP sys­tems, util­i­ties should also con­sid­er the oper­a­tional, safe­ty, and reg­u­la­to­ry impacts of clean data. 

The clean­er data is when it first comes across, the more quick­ly orga­ni­za­tions can unlock val­ue from cloud ERP, the more effec­tive­ly they can improve busi­ness oper­a­tions, and the more con­fi­dent­ly they can guar­an­tee the safe­ty of their employ­ees. Rather than ded­i­cat­ing time and resources to con­tin­u­ous­ly address­ing accu­ra­cy and qual­i­ty issues in lega­cy data, util­i­ties that invest in data gov­er­nance ahead of migra­tion will be able to more effec­tive­ly lever­age ana­lyt­i­cal deci­sion-mak­ing capa­bil­i­ties that will prove impact­ful to the bottom-line.

Clean data will also sup­port the suc­cess of shifts in orga­ni­za­tions’ tech­nol­o­gy land­scapes brought on by merg­ers and acqui­si­tions (M&A); com­pa­nies that have a clean data mod­el in the new SAP S/4HANA envi­ron­ment will find the clar­i­ty, guid­ance, and struc­ture pro­vid­ed by this mod­el to be a game-chang­er. For util­i­ties, these SAP S/4HANA clean data mod­els can enable unprece­dent­ed trans­paren­cy, allow­ing util­i­ties to see from the meter all the way to the elec­tron, along with all the aspects in between. With­in SAP S/4HANA Cloud land­scapes, the advanced dash­board­ing capa­bil­i­ties offered by SAP Ana­lyt­ics Cloud can addi­tion­al­ly help orga­ni­za­tions with clean data mod­els to help uti­lize the pre­dic­tive ana­lyt­ics they need to make future deci­sions more accurately.

2. Process­es

Process­es gen­er­ate large vol­umes of data from a vari­ety of sources, and har­ness­ing that data from oper­a­tional activ­i­ties in addi­tion to main­tain­ing mas­ter data is one hall­mark of the mod­ern intel­li­gent enterprise. 

Lever­ag­ing ana­lyt­ics to ana­lyze that data and iden­ti­fy inef­fi­cien­cies can allow busi­ness­es to make data-dri­ven improve­ments, such as stream­lin­ing work­flows. Across the entire project life­cy­cle of devel­op­ing a util­i­ty-scale solar farm, for exam­ple — ini­tial assess­ment, design and engi­neer­ing, reg­u­la­to­ry require­ments, financ­ing and pro­cure­ment, con­struc­tion and instal­la­tion, and oper­a­tion and main­te­nance — hun­dreds of process­es can dri­ve data about them­selves to allow the larg­er orga­ni­za­tion to assess their adher­ence to indus­try-lead­ing busi­ness processes. 

Build­ing resilien­cy into these process­es can also bring out new forms of report­ing that can help util­i­ties to proac­tive­ly respond to emerg­ing reg­u­la­to­ry stan­dards and dif­fer­ent ways of working. 

3. Peo­ple

Bring­ing process­es and data togeth­er, of course, requires peo­ple. Invest­ing in the health and pro­fes­sion­al devel­op­ment of one’s work­force is anoth­er essen­tial char­ac­ter­is­tic of the mod­ern enter­prise: teach­ing peo­ple how to work with­in cloud ERP, arrang­ing skillsets and pro­fes­sion­al-devel­op­ment paths to align with that busi­ness shift, is what trans­for­ma­tion is all about. 

The State of the Race

For most util­i­ties, mov­ing to the cloud will like­ly be a more expen­sive process than many might have orig­i­nal­ly thought; it will also like­ly take longer to go live than pre­vi­ous­ly esti­mat­ed, accord­ing to recent research. The rea­sons for this are mul­ti-lay­ered, rang­ing from a lack of inter­nal skills to sup­port trans­for­ma­tion to exten­sive cus­tomiza­tion in com­pa­nies’ lega­cy ERP sys­tems, but it’s clear that the ulti­mate lead­ers in this race will be deter­mined by cer­tain com­pet­i­tive advantages.

Util­i­ties that are effi­cient and effec­tive in how they shift to SAP S/4HANA, adher­ing to a clean-core method­ol­o­gy that allows them to ben­e­fit from indus­try-lead­ing prac­tices and run the sys­tem out-of-the-box as much as pos­si­ble, can avoid the obsta­cles that threat­en to block those util­i­ties run­ning high­ly cus­tomized core SAP sys­tems, who’ll take longer and less effec­tive­ly lever­age the increased busi­ness func­tion­al­i­ty of SAP S/4HANA.

In the clean-ener­gy tran­si­tion, as well, there will be those who lead and those who can learn. Though util­i­ties across the board have made sweep­ing com­mit­ments to invest in renew­able sources, there’s no guar­an­tee — with­out addi­tion­al invest­ment in data, process, and peo­ple — that those invest­ments will be used effi­cient­ly, and this emerg­ing mar­ket is still in ear­ly-enough days that con­fig­ur­ing and con­sum­ing those invest­ments prop­er­ly for orga­ni­za­tions is far from a cer­tain­ty. Embrac­ing clean ener­gy will require sig­nif­i­cant busi­ness buy-in, as well as an aware­ness that util­i­ties will like­ly make mis­takes on the road to elec­tri­fi­ca­tion; the lead­ers in this race will be those who learn from those mis­takes and keep mov­ing forward. 

Beyond that, those util­i­ties lead­ing the clean-ener­gy tran­si­tion will have suc­cess­ful­ly stayed on SAP’s stan­dard ERP func­tion­al­i­ty with­in their SAP S/4HANA trans­for­ma­tions, keep­ing their cores clean so as to enable a fit-to-stan­dard approach in SAP S/4HANA Cloud imple­men­ta­tion that can allow their busi­ness to ben­e­fit from indus­try-lead­ing prac­tices. Of course, util­i­ties will require some lev­el of cus­tomiza­tion and local­iza­tion — but at the mobile lev­el or with­in SAP Fiori, rather than with­in the core of their ERP systems. 

Those util­i­ties tak­ing a green­field approach to this trans­for­ma­tion, migrat­ing from SAP ECC to SAP S/4HANA in a new envi­ron­ment, design­ing sys­tems and work­flows from scratch with­out car­ry­ing over out­dat­ed SAP ECC cus­tomiza­tions, are par­tic­u­lar­ly set up for suc­cess in the clean-ener­gy tran­si­tion. That’s because enabling car­bon account­ing, new busi­ness mod­els, and intel­li­gent asset man­age­ment will require of util­i­ties a shift in mind­set as well as technology. 

In mov­ing toward cloud ERP sys­tems to sup­port mod­ern sus­tain­ment process­es, enable a more resilient set of oper­a­tions, and meet the future of their busi­ness head-on, the most com­pet­i­tive util­i­ties in the mar­ket today are those approach­ing SAP S/4HANA migra­tion as not a tech­ni­cal lift-and-shift but a wider-reach­ing busi­ness trans­for­ma­tion, with wider-reach­ing results.

Jeff Briner is a Prin­ci­pal with Price­wa­ter­house­C­oop­ers (PwC), in its SAP prac­tice; he is the Dig­i­tal Sup­ply Chain Capa­bil­i­ty leader.