Customers get annoyed when they’re constantly referred from one department to another with their query. And this applies to power supply companies just like any other business. There are often several contact persons dealing with different areas of business, which means that customers may receive a number of different quotes and have to respond separately to each one. And the work is often carried out by different offices, at different times and using different contractors.
Energieversorgung Offenbach AG is sparing its customers from situations like this with the aid of transparent business processes. At the same time, it’s also improving customer service and cutting costs. Since the beginning of 2002, the regional power supply company has been using an end-to-end process based on SAP R/3 which facilitates communication and cooperation between its different departments.
Don’t separate things that belong together
EVO used a heterogeneous system landscape until 1998, when it began to handle some of its major business processes using SAP R/3. These included internal and external charging for domestic connections and services and cost controlling for internal projects and investments. The company uses SAP functionalities for Controlling (CO), Finances (FI), Materials Management (MM) and Sales (SD).
However, for the domestic connections process, the power supply company continued to use various different subsystems. These were mainly Office applications, but also included some maintenance-intensive in-house developments. Additionally, work for multi-purpose domestic connections – where all the supply connections which a customer requires for gas, water, electricity, district heating, etc., are bundled together in one trench with one entry point to the house – was carried out by different departments. Each of the departments used different in-house systems, which were highly complex and release-dependent, and no shared database was available. As a result, customers wanting multi-purpose domestic connections sometimes had to deal with separate orders and bills from the various departments involved.
Putting the customer center-stage
In order to streamline its structures and business processes in this area, EVO decided in 2001 to set up a central domestic connections team to handle its multi-purpose domestic connections activities. The primary purpose of this was to improve customer focus in external invoicing operations, i.e. billing of customers and third parties, so that customers would receive one quote covering all the work required, and then one combined bill.
There were also other requirements to be fulfilled. The company wanted the system to be able to provide a simple display of all sales transactions and show the status of orders at any time. It also wanted the new process to incorporate its purchasing and warehouse departments and to facilitate simple costing and running target-performance comparisons. It needed a convenient way of passing on costs to associated companies and the means to charge on the basis of the work actually done as well as on a flat-rate basis. Finally, EVO also hoped that the new process would improve communication between its different departments and reduce paper flows.
The answer: SAP standard
EVO wanted to meet these objectives with the aid of standard SAP functions, thereby reducing the amount of redundant data stored in its various subsystems. A transparent, easy-to-follow process needed to be defined on the basis of the SAP standard. This had to be sufficiently flexible to allow additional departments with external billing operations – for example those handling external services, maintenance or claims processing – to be switched over at any time with minimum adjustments. During the restructuring period, the old business processes needed to operate in parallel to ensure that operations would run smoothly.
The company managed to fulfil this complex task by working in close cooperation with its SAP partner Plaut Consulting. The project began in August 2001 with a workshop, where a team made up of staff from applications support, the technical department, the consultants and the project managers defined the process requirements and discussed possible ways of fulfilling them.
The proposal which was chosen and implemented is based on familiar processes from the SAP R/3 core system and can be integrated into the processes of the specialist mySAP Utilities component or launched from there at any time. mySAP Utilities supports the power supply company’s billing procedures for total consumption of everything from waste water through to district heating.
SAP sales functionality sets the pace
A central starting point in the new process at EVO is the sales functionality (SD) of SAP R/3. The system initiates and guides all the subsequent steps using the sales voucher, i.e. the quote or order. The sales voucher can be expanded to include additional data such as startup costs, construction cost supplements and extra-long lines. The user decides whether the connections count as investments, for example to maintain or extend fixed assets, or whether they are a transaction in an associated business area.
In parallel to the costing procedure in the sales voucher, the system also creates a list for each connection or service. This contains all the materials and the in-house and third-party services required to carry out the work for the particular item. The list of materials is also made available as necessary to the purchasing department, the warehouse, the construction manager and the fitters, and a construction order is generated for the civil engineers.
Once all the order processing work is complete and the charges accrued have been checked, the actual costs are set out in a combined bill. Billing can be on a flat-rate basis or can be based on the work done. This allows the costs incurred and revenues received to be monitored directly and compared with the budgeted costs at any time.
The workflow helps the users
In order to simplify business processes for individual users, a workflow for all the relevant sub-processes involved in domestic connection and service processing was created for EVO. It includes quote preparation, costing, order processing and billing. The system uses the workflow to automatically distribute all the work that needs to be carried out for the domestic connections process to the relevant staff. It also takes account of the arrangements for staff absence.
Re-submission functions assist the domestic connections team in contacting customers at set intervals during the quote phase. The progress of all work can also be monitored at any time. This allows any possible deadline problems to be recognized at an early stage and put right.
The result: savings of more than 30 percent
The new SAP R/3 4.6 B business process went live in January 2002, and has since been upgraded to release 4.6C. By fiscal year 2004, all departments of EVO should be using the integrated process.
One year after the new process went live, the power supply company looks very positively on its performance to date. “We’ve managed to fully achieve the goals we’d set ourselves”, says engineer Michael Kaluza, project manager for multi-purpose domestic connections at EVO. That success can now be quantified too. After complete roll-out, the company already expects to make savings of over 30%. Considerable savings were achieved through organizational adjustments to master data management and the integration of functions from earlier subsystems into SAP R/3. This also means that EVO no longer needs to perform time-consuming maintenance work on its own in-house developments. Since purchasing, warehousing and invoice approval are incorporated into the process, all the data required by all the departments involved is available at any time.