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we know

they know

Severn Trent Water cuts costs with total asset

management solution from SAP and IBM

The Challenge

has also been implemented to deliver

with greater visibility and control,

Severn Trent Water is determined

operational and capital program

enabling Severn Trent Water to deliver

to improve quality and enhance

visibility and extend management

planned infrastructure changes and

services while keeping customers


maintenance at a lower cost, with end-

bills low. To make this possible,

it is running a 2.45 billion asset

to-end asset management that helps

The Benefits

to reduce the total cost of ownership

investment program over five

The combination of the asset

of assets. Ultimately this delivers

years, designed to cut operational

management and human resources

improved services to its customer

expenditure, provide an integrated

capabilities provided by the SAP


view of the business, and reduce

applications allows Severn Trent

support and maintenance costs.

Water to integrate information

The operational efficiencies required

sources. This helps it to predict,

Industry: Utilities

across the business were being

plan and schedule maintenance

Applications: SAP ERP 6.0

constrained by inflexible systems.

and allocate correctly skilled work

components, including financials,

crews with the right spare parts for

controlling, procurement, supply

each specific task. This approach

chain management, asset lifecycle

Severn Trent Water eliminated

increases first-time resolution rates,

management, project management,

more than 120 separate asset

which results in lower operational

planned maintenance, SAP ERP

management applications and

costs and increased service

Human Capital Management, SAP

databases by migrating to SAP

availability. Use of SAP Resource and

Employee Self Service, SAP Manager

ERP solutions, a strategy that

Portfolio Management is estimated

Self Service, SAP NetWeaver Portal,

will ultimately cover all business

to improve capital efficiency by 20

SAP NetWeaver Business Warehouse,

operations. The initial components

percent. On-site updates of asset

SAP Supplier Relationship

include financials, controlling,

condition and work completed

Management, SAP Customer

procurement, asset management,

enables automated replenishment

Relationship Management, SAP

SAP Employee Self Service, SAP

of parts used. Remote working

Resource and Portfolio Management,

Manager Self Service and SAP ERP

allows staff to update hours worked

ClickSoftware ClickScheduler

Human Capital Management, with

and confirm days off, which in turn

Workforce Management

SAP NetWeaver Portal providing

feeds the work planning system,

Services: IBM Global Business

browser-based access from

determining when and to whom the


virtualized and remote desktops. SAP

next jobs are allocated. The large

NetWeaver Business Warehouse

capital program can be managed

The Solution

Key Solution Components

IBM Global Business

Services presented a
clear budget based on
an agreed and
comprehensive business
case, and was able to
bring process
accelerators, the right
kind of people and a
progressive culture that
would drive the

Severn Trent Water Limited provides

we had to redesign our business

high-quality drinking water to 7.4

processes, train our people, and

million people and sewerage services

deploy new technology to enable that

to 8.5 million people in the UK. The

to happen.

company achieved revenues of more

than 1.3 billion and profits of over

Severn Trent Water reviewed key

280 million in 2009, and employed

operational areas in three work

5,624 people.

streams: processes, locations and


Water and sewerage services in the

UK are regulated by Ofwat, which

For example, lessons from the

sets demanding targets for customer

automotive industry showed the

service, prices, quality and many

benefits of creating systems that

other Key Performance Indicators

present complex management

(KPIs). Within the framework set by

information in a graphical manner.

Ofwat, Severn Trent Water realized

Alongside the lean-thinking

Chief Information Officer

that it needed to have a strategy for

techniques and a culture of continuous

Severn Trent Water Limited

business transformation in order

improvement, we saw how we could

to achieve its three business goals

dramatically improve our business

of delivering the lowest charges,

processes. Fresh thinking about

providing great service, and attracting

locations revealed that a new central

and retaining the best people to do

office with increased mobile working

the job.

and collaboration in agile teams

Myron Hrycyk

would create a more responsive

Myron Hrycyk, Chief Information

organization, says Myron Hrycyk.

Officer at Severn Trent Water,

explains: Wrapped around those

For Severn Trent Water, with thousands

three goals we recognized that

of miles of pipe, pumping stations,

treatment works and buildings to
repair, maintain and renew, asset
management is one of the largest cost
centers in the business. This functional
area is the focus of a 2.45 billion, fiveyear project.
Enabling this truly enterprise-wide
approach to asset management would
require suitable infrastructure.
We wanted to standardize onto a
single ERP solution and adopt best
practices, remove more than 100
legacy applications and interfaces,
and subsequently remove the
operational support and maintenance
costs. This meant streamlining the
business processes, simplifying the

architecture, and enabling consistent

To select a systems integrator, Severn

reporting to identify and drive

Trent Water focused on evidence


of capability both in SAP software

deployment and in the water utilities

Moving to centralized ERP


Severn Trent Water considered

purchasing a series of best-of-breed

IBM demonstrated recent success

applications with suitable integration

from a similar SAP deployment at a

middleware, but concluded that

UK water utility. IBM Global Business

this approach would generate

Services was able to show that it

considerable implementation costs,

would work with us to ensure that

and that operational expenses from

we maintained forward momentum

multiple vendors would be hard to

and completed the project on

control. An ERP-based approach

time, says Myron Hrycyk. We

would cure information integration

were very concerned that projects

issues, meet Severn Trent Waters

such as this can drag on and run

standardization objectives, and

into cost overshoots. IBM Global

enable business process optimization.

Business Services presented a

clear budget based on an agreed

Due to the scale and scope of the

and comprehensive business case,

project, Severn Trent Water was legally

and was able to bring process

obliged to request tenders through

accelerators, the right kind of people

the Official Journal of the European

and a progressive culture that would

Union for the ERP applications and the

drive the program.

SAP Resource and

Portfolio Management
will directly assist in
meeting capital
efficiency KPIs, with an
efficiency improvement
of around 20 percent.
Increased speed of
response to customer
calls and faster
infrastructure repairs
will contribute to
reducing customer

Myron Hrycyk
Chief Information Officer
Severn Trent Water Limited

implementation partner and systems

integrator role.

Industry-specific expertise
Working in most cases at the same

Myron Hrycyk comments: Following

locations, IBM applied its Component

the detailed tender process, a

Business Modeling (CBM) technique,

key factor was evidence that SAP

tailored to the UK water industry,

has a track record of successful

to understand and analyze the

deployments into water utilities in

processes and technology being

the UK. For Severn Trent Water,

used in different areas. This unique

SAP offered the best back-office fit,

IBM approach enabled both Severn

covering areas such as procurement,

Trent Water and IBM to identify areas

human resources and finance, as

of improvement, standardize and

well as the key resource planning

streamline operational processes, and

management and asset management

establish self-service techniques and


tools for employees and managers

across the organization.

Additionally, to complete
the workforce planning and

IBM Global Business Services

management component, we

assisted with the blueprinting, detailed

selected ClickScheduler Workforce

design and build of the entire SAP

Management from ClickSoftware,

application solution. This touched

an SAP partner, which is closely

every area of configuration, including

integrated with the SAP applications.

enhancements to meet specific

Software: SAP ERP 6.0 components,
including financials, controlling,
procurement, supply chain
management, asset lifecycle
management, project management,
planned maintenance, SAP Human
Capital Management, SAP Employee
Self Service, SAP Manager Self
Service, SAP NetWeaver Portal, SAP
NetWeaver Business Warehouse, SAP
Supplier Relationship Management,
SAP Customer Relationship
Management, SAP Resource and
Portfolio Management. Microsoft SQL
Server, Microsoft SharePoint.
Users: Full user base 5,800

needs of the UK water industry.

SAP NetWeaver Portal allows staff

In addition, IBM assisted with the

on the move between offices or

training, change management,

on the road to access key SAP

communications, organization and

applications, such as SAP NetWeaver

project management of the program.

Business Warehouse, SAP Supplier

Relationship Management, SAP

The program is still ongoing, but so

Customer Relationship Management,

far it seems to have been a success.

and SAP Resource and Portfolio

Severn Trent Water and IBM Global

Management (SAP RPM).

Business Services worked very

Without the SAP

applications, Severn
Trent Water would not
be able to meet its
business challenges or
meet the demanding
standards set by the

effectively together. We were highly

SAP RPM replaces a raft of small

focused in our drive towards the end

applications that manage our

date to deliver a high quality solution

five-year infrastructure investment

and start enjoying the business

program, says Myron Hyrcyk. The

benefits, says Myron Hrycyk.

applications integration of project

planning, resource management and

Benefit-focused management

cost analysis allows us to drive out

meant that we started to reap

cost efficiency for our capital program

the benefits of SAP even before

essential to meet the targets our

implementation, as we were

business plan and regulator demand.

able to halt investment into

systems that were planned to be

Integrated service management

decommissioned. The step change

To address its asset management

in process improvement, brought

challenge, which is a critical

about through the new technology,

component in meeting its strategic

directly helps us to repair leaks

business objectives, Severn Trent

more quickly, contributing to

Water combines the functionality

an improvement in our leakage

of the SAP asset management and

KPI. SAP Resource and Portfolio

human resources applications

Management will directly assist in

to provide integrated service

meeting capital efficiency KPIs, with


an efficiency improvement of around

20 percent. Increased speed of

For example, the thousands of miles

response to customer calls and faster

of pipe, pumping stations, treatment

infrastructure repairs will contribute

works and buildings all require repair,

to reducing customer complaints.

maintenance and renewal. Work

crews with specific skill sets, tools and

Severn Trent Water implemented a

spare parts must be allocated in the

single central SAP ERP instance. The

most efficient manner possible, both

core applications include financials,

to maximize the utilization of existing

controlling, procurement, supply

assets and to ensure maximum

chain management, asset lifecycle

possible service to customers.

management, project management,

planned maintenance, SAP ERP

In the past, with asset data stored and

Human Capital Management, SAP

managed on more than 100 separate

Employee Self Service and SAP

systems, the maintenance program

Manager Self Service.

was largely responsive, with no overall

Myron Hrycyk
Chief Information Officer
Severn Trent Water Limited

view of asset condition, work planning,

service response for example, fixing

resources or teams required.

leaks and burst mains. Workforces out

on site can be located and re-routed

Using the integrated SAP applications,

to reach urgent tasks more efficiently,

Severn Trent Water is now able

with full visibility of the crew, its

to predict, plan and schedule

equipment and skills to ensure that the

maintenance for all its assets from a

team dispatched will have the ability to

single system, preparing a single task

deal with the issue.

list. With this data, managers allocate

correctly skilled work crews to each

Meeting KPI targets

task, equipped with the right tools and

Severn Trent Water monitors and

spare parts. This integrated approach

reports on its key performance

increases first-time resolution rates,

indicators to Ofwat. Critical factors

with fewer return journeys for missing

include water quality, reducing leaks,

equipment or parts. Asset utilization

service availability, environmental

has risen, and operational costs have

impacts, customer service, and

decreased, with increased service

pricing among others.


Working closely with

IBM Global Business
Services, Severn Trent
Water has deployed an
integrated business
solution that controls
every aspect of
operations, right
through to finance and
human resources, which
helps us to achieve our
business goals and
move onwards to the
next phase of lower cost

Without the SAP applications,

Workers use laptops to access a

Severn Trent Water would not be able

Myron Hrycyk

predictive work list looking forwards

to meet its business challenges or

eight hours, including integrated

meet the demanding standards set

mapping to guide them to the

by the regulator, says Myron Hrycyk.

correct location. Staff can also reach

Working closely with IBM Global

the employee self-service portal,

Business Services, Severn Trent Water

removing the need for trips to the

has deployed an integrated business

office, for example to book time off,

solution that controls every aspect of

update personal details, and confirm

operations, right through to finance

training attendance. This in turn

and human resources, which helps

ensures that the work scheduling

us to achieve our business goals and

system only allocates staff on the days

move onwards to the next phase of

they are actually available, and selects

lower cost operations.

appropriately trained personnel for

each task.
Completing the loop, crews send
on-site updates of asset condition,
parts used and work completed,
and back-office systems enable
automated replenishment of inventory
to avoid stock-outs, again helping to
maximize first time resolution of issues.
The same solution applies to
unplanned maintenance, where
dynamic rescheduling during the day
optimizes workforce efficiency and

Chief Information Officer

Severn Trent Water Limited

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