Disruptive changes are shaping the Utilities industry today, leading to a complete business transformation. Consumers are expecting to move from being traditional consumers to having a more active role as a prosumer or flexumer. They're seeking for more individual and innovative offerings from Utilities companies.
In this scenario, Utilities need to think how to introduce new business models in short time-to-market with enough flexibility, agility, and resiliency, without compromising to deliver operational and customer excellence.
In this blog post, I’ll explore how SAP’s Industry Cloud solutions can support Utilities to innovate and improve their business while navigating the transformation process that the industry is facing
The Innovation Challenge in the Utilities Industry
With a rapid change in traditional industries, demanding new capabilities, business continuity needs to be ensured while staying competitive, and the Utilities industry isn’t immune to these challenges.
The current energy crisis is accelerating the complex and deep transformation processes for Utilities. The need to limit the global temperature puts forward the necessity for decarbonisation. Customers are generating their own energy and becoming energy “Prosumers”, who feed back to the grid. As a result, the decentralised energy resources (DER) like Solar PV, Battery Storage Systems and EV's are growing massively. Also, customers demand more sustainable energy supply (electricity consumption) from renewable sources, and sustainable production of the same. Moreover, they expect offerings from Utilities that go beyond pure electricity or water commodity services (like PV, wall box, heat pumps).
This scenario compels Utilities to transform the business model and reinvent themselves, thus upgrade from pure selling of energy and water to provide full-service and advise the customers.
Utilities must manage contradictive business goals: stabilize and secure the commodity business (provide energy, gas, water) to deliver better service at the lower possible cost. Along with innovation, increasing revenues, growth into new business models, reinvention, and faster responses to customer requirements (less time-to-market).
SAP Utilities Strategy
Industry transformation demands new capabilities, to ensure business continuity while staying competitive. A deep understanding of the industry and customer business needs differentiates SAP and drives competitive advantage.
SAP invests in intelligent enterprise solutions to cover the necessary business capabilities to provide an end-to-end value proposition. The Intelligent Suite provides Utilities with an already proven stable and reliable business foundation to run core end-to-end processes (like Meter-to-Cash, Enterprise Asset Management and Customer Experience among others) as effectively and efficiently as possible.
The Industry Cloud for Utilities is an agile and flexible marketplace comprising SAP and Partner built on-demand modular applications. These quickly deployable solutions are integrative with existing SAP solutions, complement capabilities, and fill whitespaces of the core Intelligent Suite. Therefore, enabling Utilities to innovate quickly, differentiate and gain competitive advantage.
SAP Business Technology Platform is at the heart of SAP’s Intelligent Enterprise strategy. It's significant, as it places Industry Cloud solutions along with SAP applications, which facilitate integration and further extension of SAP’s existing Utilities Portfolio.
Why Industry Cloud for Utilities?
Utilities way forward offers vast opportunities for digital transformation to address the urgency of striking a balance between stabilising commodity business and simultaneously innovating and adapting new business models.
The technological progress of Industry Cloud as a technology disruptor or a business disruptor will further facilitate Utilities with the new capabilities and agility needed to build the future business models. With a potential to innovate across the value chain, some of the significant benefits that Industry Cloud can offer are:
Embrace innovation: Access to vertical solutions across the industry with modular and cloud-based solutions, built by SAP and Partners, quickly deployable and integrative with existing SAP solutions, to introduce new business models with a short time-to-market.
Reduce IT complexity and TCO: Add or complement with individual modules or services as required, in a low code/no code environment, and a fast integration through the SAP Business Technology Platform
Achieve regulatory compliance and security: Meet existing and future reporting requirements and adhere to regulatory standards in the markets.
Drive operational & customer excellence: Enable and run Utilities end-to-end core processes with efficiency to deliver an outstanding service and always understand customer energy usage and requirements.
Several Utilities have successfully implemented Industry Cloud solutions, as Farys a major multiutility in Belgium that offers municipalities across Flanders a broad range of services, including water supply and management. With SAP S/4HANA and SAP Cloud for Energy, Farys benefits from speed and agility in operations. Besides, the extension capabilities supporting future innovation and development around the Smart Water platform, comprehends their entire data and analytical capabilities. (Read: FARYS live with SAP Cloud for Energy).
Currently we count with around 60 Industry Cloud solutions for Utilities in our portfolio, from which around seventy percent of them are partner-build solutions. This points out the relevance that our partner ecosystem has in the Industry Cloud’s strategy. We are continuously pursuing partner interest in utilities co-innovation use cases for Industry Cloud with programs like SPRINT1. (Read: SPRINT1 for Utilities Industry Cloud)
I wish to highlight another interesting example, which illustrates the power of partner-build solutions. The Southern California Gas Company or SoCalGas, the U.S. largest natural gas distribution utility, were looking to redefine the energy saving experience for both the residential and commercial customers. They selected SAP Self-Service Accelerator for Utilities by SEW, a platform that enables digital self-service and uses gamification tools to improve customer interactions. This has resulted in higher platform adoption and improved energy efficiency outreach by the utility. (Read: Making Energy Savings Easier for Millions of People with a Digital Customer Experience Platform)
SAP’s Industry Cloud enables Utilities to lead the way with an innovative, modular business model, providing a stable core with decades of industry knowledge, expertise, and a large partner ecosystem. Utilities can design their new business on demand and at their own pace, adding or complementing with individual modules or services as required, to improve financial health and process efficiency.
In the upcoming blogs, I’ll deep-dive into the different solutions that are part of the Industry Cloud portfolio for Utilities. Additionally, take a peek into how I'm shining light on our Utilities community with the “Espresso Sessions”, where you can discover the value provided by SAP Industry Cloud partner offerings.