The changes in Germany’s liberalized energy market are one of the best examples of how the formation of a united Europe is shifting structures in the economy. Open competition for business and private customers, new business realms such as energy trading, cost pressure, and the need for streamlining while meeting increased customer demands – all these factors characterize the context of the energy business.
GEW Köln AG recognized an opportunity in this time of change – and took advantage of it. Together with other energy providers in the region and its partner RWE, the company founded GEW RheinEnergie AG. The new group has provided its services in the greater Cologne area since the summer of 2002.
Looking toward the creation of this new company, GEW Köln AG had projected the introduction of SAP R/3 Human Resources with all its functions in early 2001. The venture was ambitious – a total of 15 companies were to be transitioned to the new solution, most of them from the IPAS host application. At the same time, planners sought to deal with the merger of Rechtsrheinische Gas- und Wasserversorgung AG (RGW) and GEW Köln AG to form the new GEW RheinEnergie AG.
The technical integration of the systems applied not only to the affiliated companies’ payroll system, but also to applications belonging to customers for whom GEW Köln AG acted as an IT service provider, such as Kölner Verkehrs-Betriebe AG. The objective for the new solution was to remedy all the problems of the host platforms and to enable more convenience, greater flexibility, optimized processes, and a reduced error rate.
The ability to integrate was the name of the game
Because GEW Köln AG was already using SAP R/3 4.6B with application components for Financials (FI), Controlling (CO), Materials Management (MM), Plant Maintenance (PM), and SAP for Utilities (formerly SAP Industry Solution Utilities), it made sense to choose the corresponding SAP component for the personnel information system as well. The most important argument for the choice, however, was the SAP solution’s ability to integrate. As far as possible, managers sought to establish identical structures for all participating companies, which display heterogeneous organization, departments, and pay scales. The new structures, in turn, needed to be flexible enough to integrate additional firms in the future. The company hoped that such a uniform system environment would translate into reduced support costs in its computer center operations. Moreover, GEW subsidiary Belkaw Bergische Licht-, Kraft- und Wasserwerke GmbH had already achieved positive results using SAP R/3. The company had introduced the software as an in-house project with support from GEW’s IT service.
The kick-off of the project – divided into personnel administration, time management, payroll, and processes subprojects – occurred in the summer of 2001. Planners hoped to go live on June 1, 2002 at GEW Köln AG, with a subsequent transition to GEW RheinEnergie AG on July 1, 2002. The other group and customer companies would be working with the new solution as of January 2003. The objective was to map all requirements in the SAP standard. Throughout the implementation, the project team – comprised of 35 external consultants and 45 internal employees from user departments and IT – used the SAP procedural model, ValueSAP.
A multitude of pay scales under one roof
A major challenge of the project was mapping the numerous different pay scales that apply to the affiliated companies into a uniform structure within the system. This involved allowing for classics such as BAT, BAT/BMT-G, the metal workers’ collective agreement, new items such as TV-N, and special cases such as the funicular workers’ collective agreement. This wage agreement regulates snow and avalanche bonuses — somewhat unusual for Cologne with its mild climate, but theoretically relevant for employees of the Seilbahngesellschaft, who transport tourists across the Rhein via a cable railway.
Another unusual feature resulted from the new TV-V wage agreement that applies to utilities. GEW Köln AG hoped to go live with SAP R/3 HR concurrent with the deadline for the introduction of TV-V – at the latest. The plan meant that, as part of the transition to GEW RheinEnergie AG, the company had to formulate wage agreement details and complete uniform new company agreements. Previously, TV-V was not available in a standard form within SAP HR, and, as with the company agreements, it had to be mapped during implementation.
Industry competency required
In this area, planners relied on the know-how of the consultants from Schmücker & Partner Informationssysteme GmbH, the implementation partner for the TV-V subproject. One of the tasks they faced was implementing a schema for the calculation of average payments. The schema had to consider inconstant income such as overtime and bonuses. While SAP R/3 provides a starting point for this kind of formula, it leaves its final form open. However, because development of the calculation schema affects the results, the process required profound SAP know-how and industry expertise to develop an adequate solution.
The consultant team for the TV-V subproject created a comprehensive business blueprint that encompassed the requirements of the system’s technical implementation, regulatory requirements, and the timeframe of the planned merger of two corporate groups and individual subsidiaries. To keep the amount of historical and wage account data to a minimum, the consultants chose the change of year for the cutover date.
Reusable tools prove worthwhile
In developing the procedural model for the technical component of the migration, the project team chose the Legacy Systems Migration Workbench (LSMW) from SAP. Complementing the LSMW, the team developed its own tools to accomplish data synchronization as well as unification and adaptation to HR structures. The team took great care to design the tools so they could be reusable. This approach quickly proved to be a good decision, because as new companies became affiliated, only the planning of smaller details required adaptation. The procedural model as a whole remained unchanged.
Planners chose a two-stage approach because the technical and legal aspects of the merger with RGW AG had not yet been completed before the time of the system’s technical conversion of personnel data from GEW Köln AG into the new HR application. The migration from BAT/BMT-G to TV-V was performed first, and a month later, both companies and TV-V were migrated into the new personnel area of GEW RheinEnergie AG.
With the conclusion of this complex project, the company has realized numerous benefits. SAP R/3 HR provides a flexible, customer and market-oriented human resources information system. In addition, the company has a new collective agreement that functions from a system and technical standpoint. User support is also ensured: first-level support is provided in each department and second-level support at the GEW SAP Customer Competence Center. To integrate additional companies into the group’s IT system in the future, a procedural model that can be reused at any time is also available.
Overall, GEW Rheinenergie AG has had a positive experience with the SAP application. Because it is an especially powerful system, however, it requires a carefully planned organizational structure. Once the core processes of personnel master data administration and payroll have been mapped, additional components can be deployed. Given the numerous possibilities opened up by SAP R/3 HR, the company decided to place its initial emphasis on payroll, time management, organizational management, travel cost accounting, and recruitment. Building upon this foundation, additional HR topics are already being developed, such as personnel cost planning and employee self service scenarios (ESS scenarios).