Today’s digital economy, there is immense pressure on utilities to do more for less. Utilities are facing new price pressures and competitive threats. New entrants into the marketplace have changed the way utilities deliver services, forcing them to adopt new approaches or face stagnant or declining revenue growth and margins. Digitalization of three fundamental elements –customer engagement, asset management, and financial optimization –is forcing utilities to rethink their business models and focus on how to drive revenue growth without corresponding growth in their employee base –or, in other words, drive nonlinear growth.
This new digital reality has a complex impact on utilities. On the one hand, digitalization drives a great deal of transparency and increasingly demystifies service offerings. It also fundamentally lowers the barriers to entry for a new breed of competitors. On the other hand, digitalization provides utilities with the perfect opportunity to leverage the digital energy network and rethink their interactions with customers. It allows them to scale their businesses in ways they could never imagine. It is important to recognize that, at the heart of all the threats, lies opportunities and digitalization is the best way to seize these opportunities, as it will allow utilities to serve their customers better than ever before.
To succeed, firms will need to put in place a coherent digital vision with clearly articulated offensive and defensive strategies. In particular, they will need to address emerging business models, such as driving new energy services, providing utility-as-a-service, and managing distributed energy sources. To execute on this, utilities will not only need to reengineer their business processes, but they will also have to evaluate if they have the right technology platform that can deliver on that vision.
This platform requires an IT architecture that provides both stability and long-term reliability for core enterprise processes and where change is happening on a constant basis –we call this a “bi-modal architecture.” The digital core is the foundation for the core processes that need to run consistently and flexibly. It provides uninterrupted, real-time transactions and analytics, the ability to work with Big Data, and connectivity to line-of-business (LoB) extensions that enable supporting processes such as advanced customer engagement and enhanced energy services.
SAP S/4HANA was specifically developed to represent the digital core in this “bi-modal IT architecture.” It provides utilities with a proven framework to adopt industry best practices while attaining operational excellence. Together with SAP Leonardo, utilities can realize the intelligent ERP across core customer engagement, asset management, and financial processes.
SAP S/4HANA Sources of Value
The value from SAP S/4HANA comes through simplification of the user experience, architecture, and process.
Simplified User Experience: Across all Devices
SAP S/4HANA empowers call-center agents and field workers with an end-user centric, consumer-grade experience because, for utilities, it’s the call-center agents that add value to customer engagement and field workers delivering operational excellence. SAP is driving simplification and innovation in how business users work with a role-based, consistent user experience available on any device.
Simplified Architecture: No Aggregates, No Redundancies
SAP S/4HANA’s simplified data model provides an advanced digital data architecture that provides, in real time, a single source of the truth for both transactions and analytics. This enables extensive flexibility to adapt to changing business models –for example, simulating the impact of business reorganizations in minutes rather than days.
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