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Digital Innovation Fuels Growth for Utilities from the UK to Brazil

Feature Article | November 9, 2017 by Robin Meyerhoff

“It’s an exciting time to be a utility,” said Tom Pollock, head of Information Management for Northern Gas Network (NGN) in the United Kingdom.

Wait, how’s that again?

But if you talk with Tom and others from cutting-edge utility companies about their strategy for digital transformation and how their industry is innovating with some of the newest technologies, you understand their enthusiasm.

First Step: Tame Your Data

As Tom describes NGNs business evolution, “About two years ago, we thought if we were a startup what would we do. And then we asked: what’s stopping us?”

The answer was data and technology baggage. “We had data debt and took time quantifying the extent of the problem. We found we had 155 systems of record and seven million spreadsheets – so data was everywhere across systems, spreadsheets and processes.”

“We couldn’t leverage the best out of our data because it was too dispersed.”

With the strong support of senior management, they decided the first step in their digital transformation would be to bring this data together so they could identify greenfield opportunities.

An SAP ERP customer since 2006, NGN started working with SAP to use its analytics and later the in-memory database SAP HANA to provide the company with one coherent, real-time picture of the business. Working together, NGN was able to feed this data into SAP Digital Boardroom, a dashboard that provides a real-time picture of their operations. Non-technical users can easily use the tool, which NGN calls a Digital Operations Room, to analyze data and predict the impact of new business models.

Tom says, “The Digital Operations Room is the center of our organization and is there to be used by all colleagues in our business. We can take the gut-check out of the equation and instead base our decisions on data.”

Now the company is implementing the SAP S/4HANA business suite and SAP cloud technologies to act as NGN’s digital foundation. Tom says, “SAP S/4HANA lays the groundwork for sensors, Internet of Things, machine learning. We plan to build additional cloud solutions around it for sourcing, contracts and business travel. With that in place, in a few years’ time we will be in a great strategic position to be doing all the things that everyone is talking about now.”

Common Thread for Utilities

Like many utility companies, NGN is highly regulated and has intense reporting requirements. The move to digital – especially with their focus on analytics and Big Data — helps ensure they meet regulators’ obligations faster and more easily.

NGN faces another common industry challenge: an increasingly connected and demanding customer base set within specific geographic parameters. With a vision to be the most loved business in the UK, a priority for NGN’s digital transformation is to: provide a truly great service to their customers and stakeholders, empower, connect and delight colleagues – while increasing efficiency and cost savings.

This innovation will fuel growth. Tom explains, “We need to create new business models, to address the challenges of climate change and energy security. So we’re looking into new forms of energy which require a responsive and flexible system of innovation and record, and that’s what we’re planning to put in place with SAP S/4HANA.”

NGN Innovation Moving Forward

NGN is excited about the SAP Leonardo digital innovation system, which includes machine learning, Internet of Things (IoT), blockchain, and other technologies.

Tom sees use cases for machine learning to help optimize NGN’s workforce. And IoT can help the company proactively prevent gas leakages, with real time pressure management, improving cost savings.

Brazilian Startup Uses IoT for Digital Asset Management

While NGN uses technology to explore new business opportunities, other utility companies rely on the latest innovation to help them manage assets – whether that be energy or the pipes and power lines it moves through.

With sensors embedded in 8.4 billion “things” worldwide, IoT technology can help track and analyze data about energy pipelines emitted by physical components and meters. Huru Systems is an asset management startup in Brazil that does just that. Using SAP HANA, Huru Systems can analyze IoT data to understand how parts are performing and ensure energy winds up going to paying customers.

This service is invaluable to utility companies. CEO and founder Ian Nazzari explains, “We have two major problems with utilities. First, almost $100 billion is lost each year, in part due to worldwide due to electricity theft. Second, there are millions of dollars of physical assets stolen or lost.”

Using IoT, cloud, and Big Data analytics, Ian says, “We can track those assets to the field and if they go missing we know where it happened and who installed them. We also know if an asset was not installed properly. We have insight into consumption activity, and if people aren’t using assets, we can redeploy them.”

Moreover, Ian has a grander vision for utilities in a digital economy. “Eventually in a digital economy, utilities will become general and free flowing. There is a massive change coming of disassociation from people and brands. It’s analogous to bike exchanges. Imagine exchanging electricity like bikes – freely flowing assets moving between everyone.”

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