Innovative Solutions for a

Challenging Utility Market

Andrew Strachan

WHAT IF ?

© 2011 SAP AG. All rights reserved.

2

I Offered you :
An investment with :

>55% of investment returned after 1 year
Remainder within 6-9 months ?
Thereafter >100% p/a dividend

© 2011 SAP AG. All rights reserved.

3

A rapidly changing world….
……..Requires business transformation

Utilities recognize that change is the only constant Demand Supply Per capita consumption Renewable sources Regulatory compliance Natural resources Workers’ Comp Affordable fuels Affordable rates Workforce knowledge Security Labor pool Reliable service Must rapidly seize technology and adapt to change © 2011 SAP AG. 5 . All rights reserved.

All rights reserved. sustainability. transformation © 2011 SAP AG. 6 .…and need to adapt and seize the opportunity Response Savings Smart Technology Supply in both directions Failure/incident prevention Customer intimacy Knowledge transfer Productivity Risk Incidents and fines Cost of fuel and service Interruptions and outages Environmental impact Growth.

All rights reserved. Technological Innovation Political & Regulatory  Deployment of smart meter systems  Enforcement of market liberalization  Introduction of smart grid technologies  Increasing fines for service interruptions  Integration with green and renewable energy systems  Carbon reduction compliance and programs  Water efficiency and recycling systems  Funding for renewable systems 7 .Key trends shaping the utilities industry Capacity Social & Economic  Aging infrastructure  Customer choice  Shrinking water supplies  Price sensitivity  Rising fuel costs  Quality expectations  Aging workforce  Increasing competition  Increasing power demands  Pressure to reduce carbon footprint  Increasing vulnerability to weather  Theft and increasing security risks © 2011 SAP AG.

workforce & customers  Increase touch points  Balance supply and demand  Provide on-line access.The resulting drivers Infrastructure Workforce  Upgrade assets  Promote safety  Prolong asset life  Improve productivity  Prevent asset failures  Transfer knowledge  Optimize asset efficiency  Train to support new technologies  Improve security  Enable to engage with Customers  Prevent compliance failures © 2011 SAP AG. visibility and services  Increase revenue.  Enable to respond faster to outages Customer Management  Shorten and prevent outages  Timely. All rights reserved. reliable and relevant analytics  Offer new products and services  Visibility to assets. cash flow and ROA  Reduce cost of service delivery 8 .

Ongoing Transformation of African Power Utilities – An extract NIGERIA ETHIOPIA Unbundled. All rights reserved. SOUTH AFRICA Unbundling followed by privatization © 2011 SAP AG. 9 . Deregulation on its way Generation is fully state owned UGANDA GHANA Fully unbundled. GABON TANZANIA Privatized water and electricity utility companies State owned but privately managed ZAMBIA MALAWI No privatization nor unbundling Transmission and distribution privatized State owned. Plans for privatization Vertically integrated Electrogaz Recently concessioned. But restructuring ongoing ZIMBABWE RWANDA Fully unbundled. Main generation privatized. Unbundling followed by privatization CAMEROON KENYA Privatised electricity utilities Unbundling since 1998.

10 . All rights reserved.The new Drivers of Change in Utilities Distributed Generation In favour of renewable energy resources Not only Utilities-owned but also Consumerowned Smart Grid the Utilities„ delivery infrastructure Redefinition of the relationship with the customer Modernizing E-Mobility Significant increase of power demand Built up service infrastructure Optimize Energy Efficiency Reduce CO2 Emissions © 2011 SAP AG.

Never mind the delivery of Potable Water © 2011 SAP AG. All rights reserved. 11 .

12 . All rights reserved.Non-Integrated Business Processes Hampering Power Generation Safety and Efficiency Liability risks Unsafe and unreliable plant operation  Missing control of legal /regulatory requirements  High administration efforts  Paper-based work. incomplete data  Aging workforces and knowledge drain  Insufficient failure effect analysis Asset Owners Equipment Vendors Asset Management Fuel Vendors Transport Production Management External Services Regulator Transmission System Operator Production Trader Inefficient business planning  Risky business scenario simulations  Volatility of commodity markets Poor performance visibility  Disconnected technical and business data  Inconsistent data / monolithic IT systems © 2011 SAP AG.

Transmission & Distribution Companies Face Many Challenges Outdated Grid Management Inefficient maintenance processes  High maintenance costs  Large amount of tied up capital  Low work quality Aging infrastructure  Rising maintenance costs  Decreasing reliability  High failure costs Inefficient field force management  Low percentage of wrench time  No access to up-to-date information  Bad data quality and high error rates © 2011 SAP AG. imprecise and nontimely information High costs-to-serve through process complexity  Increasing contractual relationships due to new market participants  Manual process handling no longer possible Inefficient Process Handling  High manual effort for operational processes Lack of flexibility within current business applications  High costs for change management  Short timeframe for implementation of new legal requirements 13 . Transition from Traditional to Smart Meters Increasing Regulatory Requirements Regulatory requirement to introduce smart meters  Need to integrate heterogeneous AMI systems with existing IT landscape  Necessity to adapt existing business processes Processes do not cover market requirements  No fulfillment of legislative directives  Decreasing system performance due to high data volume  No on-time communication between market participants Lack of timely information  Limited information on consumed and provided energy  Incorrect. All rights reserved.

All rights reserved. 14 .Who is SAP ? © 2011 SAP AG.

40 Years in 40 Seconds .

40 Years! 61.5 Billion+ In Revenue .000+ Employees Worldwide 190.000+ Customers in 120 countries €12.

All rights reserved. 17 .SAP Helps the World Run Better © 2011 SAP AG.

000 Employees  15.500 Employees  105.800 Customers in 35 Countries 1992 Enterprise Services Architecture  €10.1 mill. Revenue  60 Employees  50 Customers in 2 Countries 1979 © 2011 SAP AG. Revenue  9 Employees 1972 Mainframe  €5... In R&D 2011/2012.com R/3 R/2 R/1  € 0.  €6.Some SAP milestones over the last 40 years Data processing Business Automation Business Change SAP Business Suite SAP‟s focus is on Business Applications SAP..6 bill..200 Employees  2. All rights reserved.  €424 mill.000 Customers in 120 Countries 1999/2000 Revenue  51. Revenue SAP NetWeaver Revenue  25.3 bill.000+ Customers in 130+ Countries  24 Industry Solutions  € 1. One-StepBusiness Client/Server  3.6 bill.3 mill. 18 .

Launch ISU/CCS Development Project 1995 1996 Establish dedicated IBU 1997 1998 1999 SAP for Utilities 2.. 550+ IS-U inst. 19 .5 Billion utility bills per year SAP Utilities IS-U/CCS FCS IS-U/CCS GCS Market Entry RIVA Start RIVA project 1988 1992 First RIVA customers live 1994 © 2011 SAP AG. consumer contracts 2000 2003 2009. All rights reserved.SAP has a Long-Term Industry Strategy for Utilities • • • Global SAP utilities practice in 70+ countries SAP delivers end-to-end solutions from ERP to CRM & Billing/Contract Accounting to Device Management SAP is the acknowledged trend-setter in the area of Energy Data Management & Intercompany Data Exchange First Int.. 350 mill+.000+ SAP inst. Utilities Conference Industry Solution Utilities / CCS 2.

In Utilities – the Bottom Line: Best Utilities Run SAP across the entire Value Chain 1300+ Utilities In 70+ Countries Use SAP for Utilities To Power Their Businesses © 2011 SAP AG. All rights reserved. Generation Transmission & Distribution Retail 20 .

All rights reserved.And…. 21 .. SAP in Utilities in Africa • • • • • • • • • • • • • Johannesburg City Power Namibia Power • Johannesburg Water • RandWater Kengen • Department of Water KPLC Affairs CEB (Mauritius) • Namibia Water Eskom • WUC (Botswana) City of Cape Town • Capricorn District Tshwane Metropolitan Council Council (Pretoria) City of Johannesburg ZESA Botswana Power Eskom Uganda © 2011 SAP AG.

Solution Map Utilities Suppliers and Partners Generation Transmission & Distribution Meter Operation Retail and Services Customers and Channels Asset Lifecycle and Resource Management Plant Engineering and Construction Processes for construction and Plant Maintenance and Operations operation of power plants Decommissioning EAM Supply Operations Processes for construction and Grid Engineering and Construction Grid Maintenance and Operation operation of transmission and Connection and Device Management distribution grids Installation Service Meter Reading Services MR data entry Consumption Data Collection Energy Capital Management Processes for collection. and combination of energy Energy Data Management Energy Forecasting data and the decision support processes. analysis. energy sales processes. Sales Management for Commercial and Industrial Customers asAccount well and asContact the Management services Integrated Sales Planning and Analysis relating to these activities Customer Service Management Service Order Management with service ERP Billing Customer-oriented Service Processes for Utilities processes relating to the Service Contract and Entitlement Management fulfillment of Management terms Complaints and Returns Electronic Customer Services of supply contracts Account and Contact Management Billing of Energy and Services Billing for Residential Processes for billing andCustomers invoicing supply Billing for Commercial and Industrial Customers contracts forBilling energy products and water of Unmetered Services CRM and Billing Billing of Services Customer Financial Management Processes for Receivables and Collections Management contract Reconciliation and Closing accounting Auditing Collaborative Services and Intercompany Data Exchange Processes for adherence to energy-related Supplier Switch laws and industry-binding regulations Reconciliation and Settlement in the deregulated energy market Payment Processing © 2011 SAP AG. All rights reserved. and Portfolio Management energy trading processes Energy Tradingbased on this data ECM Selling of Energy and Services Customer-oriented processes Campaign Management for the marketing IC Marketing and sale of Sales Management for Residential energy products andCustomers water. Enterprise Management and Support 22 . aggregation.

All rights reserved.Solution Map Utilities Suppliers and Partners Generation Transmission & Distribution Meter Operation Retail and Services Customers and Channels Asset Life Cycle and Resource Management Supply Operations Meter Reading Services Energy Capital Management Selling of Energy and Services Customer Service Management Billing of Energy and Services Customer Financial Management Collaborative Services and Intercompany Data Exchange Enterprise Management and Support Analytics Strategic Enterprise Management Financial Analytics Operations Analytics Workforce Analytics Financials Financial Supply Chain Financial Accounting Management Accounting Corporate Governance Management Human Capital Management Workforce Process Talent Management HCM Service Delivery Workforce Deployment Management Corporate Services Incentive and Commission Travel Management Environment. 23 . Health and Safety Real Estate Management Management Operations Support Life-Cycle Data Program and Project Quality Management Indirect Procurement Global Trade Services Management Management © 2011 SAP AG.

Suppliers
& Partners

Core Business Functions

SAP for WATER Utilities

SAP‟s Water Utilities Value Chain Coverage
Source, Capture
& Storage
Management

Retail &
Services

Transport &
Distribution

Customers
& Partners

Quality & Compliance
Dam & Reservoir Lifecycle Management
Water Network Lifecycle Management
Resource Management
Meter Reading & Services
Selling of Water & Services
Customer Service Management
Billing of Water & Services

Supporting
Business Functions

SAP ERP

Customer Financials Management

© 2011 SAP AG. All rights reserved.

Analytics
Financials
Human Capital Management
Corporate Services

Operations Support
Technology

24

SAP for Utilities: A Modular Business Process Platform
Enterprise
Asset
Customer
Business
Intelligence
Reports
& Analytics Energy Capital
Management
Relationship & BillingManagement
Selling of Energy & Services

Plant Lifecycle
Management

Meter Operations
Energy Data Management

Customer Service
AMI / Smart Grid Integration
Network Lifecycle
Management

Billing of Energy & Services
Energy Portfolio Management

Resource & Supplier
Management

Customer Financials
Management

Reconciliation & Settlement

Intercompany Data Exchange

Energy Accounting

Business Intelligence & Analytics
Enterprise Management & Business Support
Performance
Management
© 2011 SAP AG. All rights reserved.

Financial
Accounting

Human Capital
Management

Corporate
Services

Operations
Support
25

Analysts Continuously Rank SAP #1 in Utilities
International Utility
Billing & Customer Info Systems

© 2011 SAP AG. All rights reserved.

26

SAP for Utilities
Facts & Figures - Dx

Rank

Company

Country

ERP

CR&B

Rank

Company

Country

ERP

17

GDF Suez

France

281

PG&E

USA

27

EDF Group

France

282

Veolia Env.

France

43

ENEL

Italy

284

American Elec.

USA

47

RWE Group

Germany

310

First Energy

USA

82

E.ON

Germany

312

Electrobras

Brazil

87

Iberdrola

Spain

313

Entergy

USA

129

National Grid

UK/USA

317

NTPC

India

171

Excelon

USA

323

Edison Int.

196

KEPCO

S.Korea

333

201

Southern Comp

USA

206

Kansai Electric

Japan

225

Dominion Res.

226

Rank

Company

Country

ERP

CR&B

445

AES

USA

449

Kyushu Elec.

Japan

458

Progress Ener.

USA

479

CLP Holdings

China

487

PPL

USA

492

Xcel

USA

540

Tokyo Gas

Japan

USA

549

Huaneng Pow.

China

Union Fenosa

Spain

575

Tenaga

Malay.

335

PSEG

USA

579

Centrica

UK

336

CEZ

Czech

592

Edison

Italy

USA

339

Gas Natural

Spain

600

NRG Energy

USA

FPL Group

USA

340

Con. Edison

USA

617

Tohoku Elec.

Japan

236

SSE

UK

361

Fortum

Sweden

626

Saudi Electric

Saudi

239

EDP

Portugal

409

Sempra Energy

USA

258

Chubu Electric

Japan

415

Tokyo Electric

Japan

260

EbBW

Germany

421

TransCanada

Canada

269

Duke Energy

USA

424

Williams Co

USA

CR&B


*Public listed companies on any publicly accessible stock
exchange http://www.forbes.com/lists/2009/18/global09_The-Global-2000_IndName_20.html

7 of the top 7 utilities in Forbes2000* run SAP ERP and Customer Relationship & Billing.
39 of the top 50 utilities in Forbes2000* run SAP ERP.
© 2011 SAP AG. All rights reserved.

27

96 Acciona Spain 51 FPL Group USA  100 Alpiq Holding Switz. 28 . USA   71 Entergy USA  Spain  77 Duke USA Vattenfall Sweden  86 CLP Holdings China 45 E. Japan 63 FirstEnergy USA 121 Kyushu Elec.platts. USA 108 Progress USA  62 Fortum Sweden 116 Tokyo Elec.com/Top250Home * © 2011 SAP AG. Japan   ERP 10 of the top 15 power generation utilities in Platts250* run SAP ERP     Public listed companies on any publicly accessible stock exchange http://www.ON Germany  91 PPL Corp USA 47 EnBW Germany  93 Enersis Chile 49 CEZ Czech.SAP for Utilities Facts & Figures Power Generation Rank Customer Region 18 EDF France 19 ENEL Italy 34 Excelon USA 36 Iberdrola Spain 38 Endesa 41 ERP Rank Customer Region 65 Union Fenosa Spain 66 AEP USA 67 Edison Intl. 52 Electrobras Brazil  104 CEO Lithuania 55 EDP Portugal  105 CEMIG Brazil  57 Southern Co. All rights reserved.

organizational and customer demands  Fortune 500: 10 of the Top 10 utilities run SAP  Continuous process efficiency and profitability across all segments  SAP Utility customers achieve measurable business value (reductions in integration costs.Why SAP? Enable Business Strategy Growth and Profitability  Real-time decision support to enable quick response to regulatory.  Eliminate 80-90% of interfaces (interfaces cost on average $35K to develop and $6K/yr to maintain) 29 .) Minimize Risk Reduce Operating Costs  Over 2.000 utilities worldwide have deployed the SAP ERP solution  Reduce IT costs by 30-50% by shifting responsibility for software development back to the solution provider  Over 700 utilities in 32 countries are using our utilities industry solution  Leverage the knowledge of over 20 years of delivering Utility Industry specific solutions expertise of over 8. market. and over $1 billion in annual R&D spend © 2011 SAP AG.000 developers. O&M costs. working capital. etc. All rights reserved.

© 2011 SAP AG. All rights reserved. 30 .

31 . All rights reserved.How do you RUN your INTERNAL Operations ? © 2011 SAP AG.

© 2011 SAP AG. All rights reserved.What do you use to run ? Contracts Finance Compliance Loans Stores / Warehouse Legal Budgeting Reporting Travel Scheduling Maintenance Purchasing Projects Etc. 32 .

All rights reserved.The Typical IT Landscape: Multiple Disparate Systems Some key issues : Lack of data and process integration No single view of the data Lack of data integrity Multiple Vendors High Support Cost Support Availability Duplicated Efforts Current Technology Adoption Levels Upgrade Strategies Platform Strategies High TCO Scalability © 2011 SAP AG. 33 .

..External Applications The Complete TCO Picture Some typical applications Self Service Route Reading Management Meter Reading Core Applications One single end to end …. 34 . Land GIS Information integrated solution is needed Billing Finance to minimise the HR Payroll Total Cost Asset of Ownership Purchasing Maintenance .. The TOTAL cost of ownership = Cost of external platforms + Cost of integrating applications and platforms + Cost of applications It is clear that these applications need to be integrated: BUT HOW ? © 2011 SAP AG. All rights reserved.

to improve business performance. Human Resources and Customer Relationship Management. Projects. employees. Financials. An ERP system supports the business system that maintains in a single system the data needed for a variety of business functions such as Manufacturing. © SAP 2011 – SAP @ WAPIC © 2011 SAP AG. Supply Chain Management.What is ERP ? Enterprise resource planning (ERP) is the planning of how business resources (materials. customers etc. All rights reserved.) are acquired and moved from one state to another. Source : Wikipedia 35 . The ERP modular software design should mean a business can select the modules they need. An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in real-time.

Purchasing Operations Billing Maintenance Finance .. integrated business solution that works across your entire organisation © 2011 SAP AG.ERP aligns organisations around core business processes Company X HR Most legacy IT systems were aligned by function and by department ERP works across these traditional barriers.. and common Nouses single view ofdata the organisation Lack of data integrity Cost of supporting multiple systems Duplicated Efforts Order Processing Stores and Procurement Customer Services Financial Reporting ERP is a single. © SAP 2008 / Page 36 36 .. All rights reserved. and aligns your internal processes Lack of data and process integration ....

Health and Safety Quality Management SAP NetWeaver People Integration Procurement and Logistics Execution © 2011 SAP AG.Comprehensive ERP Functional Scope SAP PLM SAP SRM SAP ERP SAP CRM SAP ERP provides comprehensive ERP functionality allowing the achievement of business strategies in an integrated but open and extendable architecture SAP SCM SAP NetWeaver End-User Service Delivery Analytics Strategic Enterprise Management Financial Analytics Operations Analytics Workforce Analytics Financials Financial Supply Chain Management Financial Accounting Management Accounting Corporate Governance Human Capital Management Talent Management Workforce Process Management Workforce Deployment Procurement Supplier Collaboration Inventory and Warehouse Management Inbound and Outbound Logistics Transportation Management Product Development and Manufacturing Production Planning Manufacturing Execution Enterprise Asset Management Product Development Life-Cycle Data Management Sales and Service Sales Order Management Aftermarket Sales and Service ProfessionalService Delivery Foreign-Trade Management Incentive and Commission Management Corporate Services Real Estate Management Project Portfolio Management Travel Management Environment. All rights reserved. Information Integration Process Integration Application Platform 37 .

All rights reserved. 38 .A Teaser… Wouldn‟t you like this view ? © 2011 SAP AG.

All rights reserved. 39 .© 2011 SAP AG.

All rights reserved. 40 .What about your revenue stream ? © 2011 SAP AG.

60 Jobs running on 12 application servers)1 Runtime of mass High DSO blocks working capital Example: 1 bn revenue and financing costs of 7 %  Reducing DSO by 1 day saves ~ $US 200.g. Invoicing Bill Print 41 .000 Activity [sec] 4000 3000  The probability  to get paid decreases  with the age of the debt 2000 1000 Billing © 2011 SAP AG. All rights reserved. Invoicing and Bill Print process decreases with parallelization (e.Evaluations confirm revenue creation and revenue assurance challenge Utilities streamline their billing process and look for new ways in collections management to reduce DSO (Days Sales Outstanding) and avoid bad debt losses. Scaling of mass activities billing/invoicing and bill print Example: Runtime of Billing.

 How do I streamline the consumption to billing process to speed revenue realization?  How do I reduce call center costs and improve customer service by ensuring billing clarity and accuracy?  How do I enhance my receivables management with complete and accurate accounting?  How do I reduce DSO and avoid bad debt losses? 42 .What does this mean for your business? Top executive issues © 2011 SAP AG. All rights reserved.

associated with difficult reconciliation  No Utilities specific expertise in accounting processes  Complex and high-volume payment handling and unclear payment allocation associated with expensive manual work 43 . controlling. and reporting. Public Authorities Front Office External Credit Bureaus Lack of comprehensive sub-ledger accounting  Inaccurate accounting. All rights reserved. accounting and collections in an effective and sophisticated way Poor Collections  No consideration of customers‟ credit risk and thus treatment of all in the same way Banks / Payment Points  Slow.Fragmented billing and receivables handling impair revenue realization Utilities have no streamlined and comprehensive process chain to handle billing. fixed and non-transparent processes  Legacy systems and thinking limit improvement opportunities External Collection Agencies Court Other Services  Reactive collections instead of pro-active consideration Billing Invoicing Back Office Meter Reading Complex billing process and high volume data  Time critical due to high data volume  Complicated billing rules cause incorrect invoices and unsatisfied customers  High operating costs in case of manual intervention © 2011 SAP AG.

cross-functional process Bill to Cash connects processes across departments to enable a timely revenue realization CFO Billing Accounting Collections Chief Financial Officer Billing of Energy and Services Receivables Management & Payment Handling Credit & Collections Management Consumption billing Accurate and timely billing process Collection success evaluation Accounting engine Financial back office Financial front office Multi-channel bill presentment Payment handling Credit risk based collections Customer self services © 2011 SAP AG. All rights reserved. 44 .Bill to Cash is an end-to-end.

Revenue & Credit Control .Financials .Customer Services . Enquiries / Complaints Billing and Invoicing EBPP CRM Print Shop AMI / Prepaid Mobile Devices 45 .Billing and Invoicing .Human Resources .Billing within the value chain Human Resources Connection Request Legal SAP Utility Billing GIS Work Management Device Management Device Installation Disconnection Move In Customer Service Management Move Out Meter Reading ERP Financials Payment Collection . All rights reserved.Logistics .Other Systems © 2011 SAP AG.Device Management .

46 .Bill to Cash is an end-to-end. All rights reserved. cross-functional process Bill to Cash connects processes across departments to enable a timely revenue realization CFO Billing Accounting Collections Chief Financial Officer Billing of Energy and Services Receivables Management & Payment Handling Credit & Collections Management Consumption billing Accurate and timely billing process Collection success evaluation Accounting engine Financial back office Financial front office Multi-channel bill presentment Payment handling Credit risk based collections Customer self services © 2011 SAP AG.

Co-Generation © 2011 SAP AG. writing Call Center IVR – Interactive Voice Response Internet AMI & HAN*  eliminating  decreasing  continuing  increasing  new Customer Role  Consumer  Co-Generator  Trader  continuing  increasing  new Products/Services sold     Commodity Energy Efficiency Services Energy efficient Appliances Micro-Generation. All rights reserved.Customer Service moving to Customer Cooperation Communication Channel      Walk in.  continuing  strongly increasing  increasing  increasing 47 .

who has a 360 view © 2011 SAP AG. All rights reserved. 48 .Financial Customer Care Preferred channels to access bills and account information Preferred payment methods Preferred payment day Offer flexible payment condition due to financial situation Utility One bill for all businesses incl. non energy Other valuable information on the bill e.g. green energy Customer Easy access to utility with short reaction time Via self-services or Call center Reliable and expert knowledge contact persons.

Dispute Management Customer disagrees with invoice1 Agent reviews customer account status and invoice 2 3 Customer contacts Agent in Interaction Center 8 Result is communicated to the customer Agent creates a dispute 4 Calculate adjustment 7 Dispute Manager Investigation of Dispute 6 © 2011 SAP AG. Dispute Manager 5 Dispute is routed to responsible person 49 . All rights reserved.

All rights reserved. 50 .Case Management Contains Related Information In One Place All Bundled Together Enabling Collaboration Managed within a Timeframe The Case © 2011 SAP AG.

clearing houses. respecting legal requirements  Reliable interaction with banks. external cash points  Clearing strategies for automated payment assignment © 2011 SAP AG.Timely and correct execution of processes from Bill to Cash Seamless Bill to Cash will orchestrate and accelerate all billing. accounting and revenue related activities Successful collections  Risk based customer segmentation controls the business and collections process starting already at sales  Broad variety of functions enables 360 degree approach  Continuous improvement of collections processes due to easy configuration of sophisticated collections strategies  Automatic responsibility determination and optimized resources allocation Banks / Payment Points External Collection Agencies Court Other Services  Monitoring collections success Billing Invoicing Back Office Meter Reading Optimizing the billing / invoicing process  Run bill/invoice process on time  Link accurate rate for bill / invoice to customer  Customer can view bill via internet selfservice / e-mail or mail Public Authorities Front Office External Credit Bureaus Compliant and transparent receivables management  Seamless integration of receivables management with general ledger and profitability accounting including drill-down capabilities  Following accurate accounting principles. 51 . All rights reserved.

001% Public Authorities Front Office External Credit Bureaus  Effort for complex billing -50% Compliant and transparent receivables management  Customer can view bill via internet selfservice / e-mail or mail Faster payment and dunning runs  performance grew from 12 hours to 25 min.80%  Cash reserves increased to US$115 m. increasing revenues Reduction of manual clearing and payment allocation work by 40% .4% of revenue to 16. for each of these runs  Bill-payment ratios rose from 85% to 98%. accounting and revenue related activities Successful collections Reduction of outstanding receivables by 20% in a three-year period (from 20. better information of customers and collection agents Improved speed of collections Other Reduced time to manage past-due accounts Banks / Payment Points External Collection Agencies Court Services Billing Invoicing Back Office Meter Reading Optimizing the billing / invoicing process  Reduction of overall billing rate to less than . avoiding need for US$50 m loan © 2011 SAP AG.Timely and correct execution of processes from Bill to Cash Seamless Bill to Cash will orchestrate and accelerate all billing. Overall reduction of manual A/R work by 50% 52 .3%)  Cash flow increase of € 80 m for a revenue of € 2 billion Increase in collection efficiency by 50% . All rights reserved.80 %  previously uncollectible debt can now be collected because of payment agreements. external collection agencies.

53 .Lets See it in Action ! © 2011 SAP AG. All rights reserved.

© 2011 SAP AG. All rights reserved. 54 .

55 .Managing Your Assets ! © 2011 SAP AG. All rights reserved.

All rights reserved. 56 .Evolving to Preventive and Reliability Centered Maintenance © 2011 SAP AG.

Enterprise Asset Management © 2011 SAP AG. 57 . All rights reserved.

Linear aspects considered for :  Data modeling  Inspections processing  Condition monitoring  Maintenance and Repair © 2011 SAP AG. Gas. markers etc.SAP Linear Asset Management Need to manage linear assets as a continuous asset with dynamic segmentation Supporting ways to identify location information:  E. etc. All rights reserved. describe pipelines (Water.) by Mile/km Point. GIS Locations for access.g. transmission towers. 58 .

62m 0.15m 4.75m 2. 59 .80 km 4.60 km © 2011 SAP AG. All rights reserved.Linear Data .Offsets Offsets are used to define an exact location 4.

Three Levels of Integration Between GIS and SAP SAP application Composite GIS Composite business processes and services SAP functionalities SAP © 2011 SAP AG. GIS functionalities Data synchronization GIS 60 . All rights reserved.

61 . All rights reserved.Lets See it in Action ! © 2011 SAP AG.

62 . All rights reserved.© 2011 SAP AG.

ENERGY DATA MANAGEMENT IN UTILITIES .

Profile Header) 1 Archive Energy Data 7 6 Processing Energy Data (Complex Billing. All rights reserved. Settlement) Upload and Store into Energy Data Repository Trading Settlement Complex Billing Complex forecasting Real Time Pricing Etc 5 Formula Calculation & Synthetic Profiling © 2011 SAP AG.g.Lifecycle of Energy Data Management Creation of Master Data (e. 2 Enabling 3 Plausibility Checking & Value Substitution 4 Profile Data Management 64 .

All rights reserved. 65 .Real Time Pricing – Spot Pricing Forecast Profile Quantity Spot Price Applies Consumption Profile Normal Price Time © 2011 SAP AG.

66 . All rights reserved.Getting SMART ! © 2011 SAP AG.

SAP’s AMI Solution Helps Realize the Maximum Value of AMI Investment © 2011 SAP AG. All rights reserved. 67 .

All rights reserved. SAP EDM MDUS SAP Customer Relationship & Billing SAP Applications on Energy Capital Mgmt 3rd Party Applications on Energy Capital Mgmt SAP Enterprise Asset Management 68 .SAP AMI Integration for Utilities Realtime Applications Demand Response. Dynamic Pricing. Distributed Generation AMI@SAP C Grid Management / Optimization AMI Headend System Outage Management C Meter Data Unification & Synchronization C AMI Headend System SAP IDE Intercompany Data Exchange C Energy Retailers © 2011 SAP AG.

purchase and actual sales portfolio  Data exchange with external information sources (forecast data. All rights reserved.)  Provision of base prices and quotation prices for sales processes  Increasing quality and accuracy of nominations saves costs for regulation energy  Compliance with regulatory requirements  Integration with SAP ERP and SAP CRM  Calculation of short-term schedules within nomination processes Customer examples  Standardized platform for all Sales Portfolio Management processes  Reduction in number of interface related errors  Significantly less work thanks to process automation  Data storage comply with auditing requirements  More transparency and minimized risks © 2011 SAP AG. stock market prices etc.SAP for Utilities is the first solution providing a fully integrated Energy Portfolio Mgmt Energy Portfolio Management Energy Capital Management Key benefits  Matching of sales and procurement  Defining and managing sales portfolios  Short-term scheduling based on actual supply contracts and forecast profiles  Calculation of pricing curves  Reduction of risks arising from mismatch between demand planning. 69 .

All rights reserved. 70 .© 2011 SAP AG.

What about all of the Data ? © 2011 SAP AG. All rights reserved. 71 .

Facing the Data Tsunami Classic Meter Smart Meter Example: Utility with 1.2M Customers 1000 Byte per reading 1 reading per customer/year ----------------------------------------= ~ 1 GB raw data per year 15-min (96 values) per customer/day 5760 Byte per customer/day -----------------------------------------= 6.44 GB raw data per day  2.3 TB per year = ~ 750 GB per year compressed 72 .

All rights reserved. 73 .Breakthrough innovation : analyzing data at the speed of thought (HANA) HANA KEY MESSAGE  The breakthrough innovation of SAP “In-Memory Technology”  460 B data records analyzed in < 1s : 3600x faster 3600x Faster reporting speed 460B Data records analyzed in less than a second SAP HANA The In-memory Revolution: Business Insight © 2011 SAP AG.

SAP Smart Grid Analytics LET’S SEE IT IN ACTION 74 .

© 2011 SAP AG. All rights reserved. 75 .

76 . All rights reserved.Getting to the Field © 2011 SAP AG.

anywhere  Perform safety checks  Manage certifications  Receive/respond to alerts  Receive training Analytics  Manage job assignments  Respond to outages  Receive training  Analyze performance © 2011 SAP AG. All rights reserved.Mobile solutions virtualize business Mobile enables you to  Manage network performance  Conduct operator rounds  Maintain assets connect to enterprise data collaborate with partners conduct business Core Business Processes Personal Productivity & Safety  Make sales/service calls anytime.  Elect renewable sources Partner Collaboration Customer Engagement  Shop for products/services  Monitor/reduce consumption  Track/prepare for storms 77 .

…and accelerate decision making… Respond instantly to changing demand/supply conditions Real-time continuous customer visibility Launch new products/services faster Adopt new regulatory requirements faster Executives Get ahead of outages. More easily recruit. incidents and failures Maintenance & Operations Sales & Marketing Connected Disconnected Real-Time Provision new customers / services faster Service & Support Shorten permit times Build plants and add network capacity faster Shorten billing/collection cycles Report outages faster Integrate new partners / suppliers faster Engineering & Construction Logistics & Admin Speed up parts orders / delivery Bring renewable sources and green tech on line faster © 2011 SAP AG. All rights reserved. and train 78 .

SAP mobile solutions for utility companies Demo: .

How do you bring this into YOUR Organisation? © 2011 SAP AG. 80 . All rights reserved.

Experience of SAP Implementation ! © 2011 SAP AG. All rights reserved. 81 .

Getting back to my Question ! © 2011 SAP AG. 82 . All rights reserved.

Getting Back to my Question : WHAT IF ? © 2011 SAP AG. All rights reserved. 83 .

What if ? I Offered you : An investment with : >55% of investment returned after 1 year Remainder within 6-9 months ? Thereafter >100% p/a dividend © 2011 SAP AG. All rights reserved. 84 .

The Benefits US$ 1 = R8 Nirvesh Sooful – CIO City of Cape Town Public Sector IT Solutions Conference . All rights reserved.Sandton © 2011 SAP AG. 85 .

This City Runs SAP ! © 2011 SAP AG. All rights reserved. 86 .

but the one that is most responsive to change” Charles Darwin “Insanity is doing the same thing over and over again and expecting different results…” Albert Einstein .“It is not the strongest of the species that survives. nor the most intelligent.

IN CONCLUSION SAP IS THE NATURAL CHOICE ! .

Thank you Andrew Strachan INDUSTRY PRINCIPAL: UTILITIES SAP Africa SAP Africa T +27-11 319 7439 F +27-11 235 6201 M +27-83-235-0152 E andrew.com Questions .strachan@sap.