An Industry with Staying Power

The utilities industry is adapting to changing trends in energy consumption (photo: SAP)
Utilities: an industry in transit. (photo: SAP)

Flick a switch and the light turns on. Twist a tap and water flows out of the faucet. In this regard, power consumption has not really changed in decades. But many other aspects of the utilities industry – from meter reading to interacting with customers – are evolving to meet new needs and trends. Think smart grids, in-memory analytics, online services, and the growth of sustainable practices.

Enhancements to SAP Business Suite 7 already extended the solution portfolio for utilities to cover many of these areas in December 2010. These innovations are in the ramp-up phase and will soon be generally available, but more innovations are already in development for 2011 and even more are being planned for the future.

In its utilities roadmap, SAP names six key areas of transformation in the industry:

  • smart grids
  • SAP In-Memory Appliance (SAP HANA)and smart grid analytics
  • utilities companies as retailers
  • customer online services
  • power production
  • sustainability

SAP is currently focusing on smart grids and analytics as the main areas of investment for the utilities industry. On the following pages, we’ll give you an overview of the enhancements planned for all six areas of transformation.

Smart meters provide utilities companies with data on energy consumption patterns (photo: Frank Völkel)
Smart meters provide utilities companies with data on energy consumption patterns (photo: Frank Völkel)

Smart grids will transform the industry

In his presentation, “Solutions for an Industry in Transit,” at the 8th SAP Utilities Conference in Mannheim, Germany, Dr. Stefan Engelhardt emphasized the pivotal role of smart grids in the future of the utilities industry. According to Engelhardt, smart grids will affect every part of the value chain in this industry.

The release of Business Suite innovations in December 2010 optimized user interfaces, rolled out smart meters, and integrated Advanced Metering Infrastructure (AMI) 2.0. AMI technology differs from conventional meter reading in that it enables two-way communication between the meter and the utilities company. The main function of AMI 2.0 is to allow companies to measure, collect, and analyze energy consumption, but it also features customer service processes.

Upcoming innovations for smart grids

More innovations for smart grids are expected to be released in Q4 2011. Planned enhancements include integration of Geographic Information Systems, which, for example, could help utilities employees locate underground water pipes, and AMI 3.0, which should feature improved time-of-use billing among other enhancements. SAP is already planning the portfolio for innovations in 2012 and beyond, but no release date has been set yet. Some of these planned enhancements include in-memory analytics for smart grids and SAP Visual Business. The latter technology would allow users to combine SAP back end data with external data sources in a graphical, three-dimensional rendering that makes complex data easy to understand.

A peek at the pilot version of the benchmarking application for utilities companies (screenshot: SAP)
A peek at the pilot version of the benchmarking application for utilities companies (screenshot: SAP)

SAP HANA makes sense of smart grids

While AMI gives companies the data on energy consumption, in-memory analytics helps companies put that data to practical use. Utility companies will be able to take advantage of real-time operational analytics based on the combination of SAP HANA and the 4.0 0 releases of business intelligence (BI) and enterprise information management (EIM) solutions.

The release of smart meter analytics is planned for Q4 2011. With this technology, utilities companies would be able to create and analyze customer segments based on their energy consumption. Companies could also apply the smart meter data to a benchmarking application that uses advanced analytics to identify opportunities for greater energy efficiency. SAP worked with customers in the utilities industry to develop a pilot version and is now in the process of developing the application for general availability.

Smart grids and SAP HANA: core focus for utilities

In the next few years, utilities companies will be able to take advantage of the integration between smart grids and in-memory analytics for other business scenarios. Companies are already able to manage their smart grid operations with the Smart Grid Business Platform from SAP, and in the future, they should be able to run energy efficiency programs, sales analyses, in-memory based forecasting, and other functions from the platform. This area – smart grids and analytics – is the main focus of SAP’s investment in the utilities industry.

Utilities companies acting as retailers

Utilities retail companies – for example, Centrica based in the UK or E.ON AG based in Germany – generate and distribute energy to customers. In order to improve efficiency within their own operations, companies are automating more of their processes and integrating enterprise applications.

Innovations to Business Suite 7 in December 2010 made some enhancements to the retail side of the industry. Companies now have integrated Real-Time Offer Management and have streamlined B2C sales, which aids in selling product bundles, for example. Key enhancements planned for 2011 include onsite billing and management of energy efficiency programs.

Innovations planned for 2012 and beyond should bring even more customer-focused features to Business Suite 7 for utilities. Some of these are an extended Loyalty Management program and a program to analyze the best tariff for a customer based on consumption patterns.

Customer online services 1.0 and 2.0

Energy consumers today are more knowledgeable about prices and services in the utilities industry. Increasingly, they’re willing to switch energy suppliers if they find a better deal or more convenient service. Utilities companies that offer customer online services (COS), such as online bill pay and online meter reading, will prove to be more flexible and competitive in the industry. Therefore, COS is an important point of transformation in the utilities industry.

SAP is planning to release COS 1.0 in 2011. This release is expected to be a pilot version available to a select group of customers. Currently, COS 1.0 is being developed for use on a few preferred channels: mobile, internet, and portal. SAP is planning to extend COS 2.0 to a wider market in the future. The 2.0 version should feature further self-service scenarios, depending on the COS demands that are identified by then.

Power production and sustainability

It is helpful to think of these two areas – power production and sustainability – in conjunction with one another. After all, the demand for energy to power homes, cars, and industry is ever increasing while the supply of fossil fuels is finite.

The Business Suite 7 innovation package released in December 2010 delivered several enhancements for both areas. With Fuel Supply Chain Management, utilities companies are provided with safety and control measures for fuel procurement, transportation management, and inventory management. Meanwhile, Sustainability Performance Management now includes integration with SAP Carbon Impact and customer-defined KPI categories.

SAP is planning further innovations for these areas as well. In 2011, the utilities industry should receive enhancements in the areas of Operational Risk Management, in-memory Maintenance Cost Budgeting, and SAP for Waste & Recycling, to name a few. The next Business Suite innovation package, for 2012 or later, plans to deliver Energy Supply Chain Management and Energy and Emissions Management, among other innovations.

Utilities companies will have to focus more on renewable energy sources (photo: Fotolia)
Utilities companies will have to focus more on renewable energy sources (photo: Fotolia)