SAP For Utilities

INDUSTRY SOLUTIONS – SAP FOR UTILITIES HIGHLIGHTS

Welcome to the lesson on "Industry Solutions – SAP for Utilities Highlights.“ This lesson will help you understand how an SAP solution works for a particular industry, in this case, companies in the utilities industry.

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TABLE OF CONTENTS

Industry Solutions – Utilities Overview……….……............. 6 SAP for Utilities Solution Map………………………….……. 11 SAP for Utilities – Business Processes……………………. 16 SAP for Utilities – Business Benefits…….……….............. 22 SAP for Utilities – Meeting Industry Requirements........... 34 SAP for Utilities – Customers…….…….……….................. 42

© SAP AG 2005, Channel Partner Sales Training

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In the overview lesson on "SAP Industry Solutions" in Learning Map 3, you learned how industry solutions are developed, how well SAP is established in developing industry solutions, and how these solutions deliver value. This lesson will provide you with a highlevel view of the SAP industry solution for utilities and demonstrate how SAP is working to provide solutions within this industry. We will begin with an overview of the utilities industry and the challenges that companies in that industry face. We will then take a tour of the SAP for Utilities Solution Map and after that review the business processes and benefits provided by SAP for Utilities. We will follow that with a discussion about how SAP for Utilities meets the requirements of the utilities industry and conclude with a look at a sample of the many customers who have benefitted from implementing SAP for Utilities.

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LEARNING OBJECTIVES

At the end of this lesson, you will be able to:

Identify the challenges, business processes, and requirements of the utilities industry

Explain how the SAP for Utilities solution delivers benefits for the utilities industry

Describe the SAP for Utilities Solution Map and value chain


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At the end of this lesson, you will be able to: •

Identify the challenges, business processes, and requirements of the utilities industry,

•

Explain how the SAP for Utilities industry solution delivers benefits for the utilities industry, and

•

Describe the SAP Utilities Solution Map and value chain.

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PREREQUISITES

Review these lessons:

"Introduction to mySAP Business Suite"

"SAP NetWeaver Highlights"

"mySAP ERP Highlights"

"SAP Industry Solutions – Overview"


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As a prerequisite to this lesson, please make sure that you have reviewed these lessons in Learning Map 3: •

"Introduction to mySAP Business Suite,"

•

"SAP NetWeaver Highlights,"

•

"mySAP ERP Highlights," and

•

"SAP Industry Solutions – Overview."

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KEY VOCABULARY

CAD – Computer-aided Design

CAM – Computer-aided Manufacturing

ERP – Enterprise Resource Planning

ROI – Return on Investment

SCADA – Supervisory Control and Data Acquisition

SCM – Supply Chain Management

SRM – Supplier Relationship Management


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Key terms used during this lesson include: •

CAD — Computer-aided Design,

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CAM — Computer-aided Manufacturing,

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ERP — Enterprise Resource Planning,

•

ROI — Return on Investment,

•

SCADA — Supervisory Control and Data Acquisition,

•

SCM — Supply Chain Management, and

•

SRM — Supplier Relationship Management.

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INDUSTRY SOLUTIONS – UTILITIES OVERVIEW


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SAP for Utilities is only one example of the many industry solutions provided by SAP. Additional information on this and SAP's other industry solutions can always be found at www.sap.com.

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INDUSTRY SOLUTION TYPES Financial Services

Service Industries

SAP for Banking SAP for Insurance SAP for Financial Service Providers SAP for Professional Services

SAP for Media SAP for Logistics Service Providers SAP for Telecommunications SAP for Utilities SAP for Hospitality Services

Discrete Industries SAP for Aerospace & Defense SAP for Automotive SAP for Engineering, Construction & Operations SAP for High Tech SAP for Industrial Machinery & Components SAP for Railways

Process Industries

Public Services

Consumer Industries

SAP for Healthcare SAP for Higher Education & Research SAP for Public Sector SAP for Postal Services

SAP for Consumer Products SAP for Retail

SAP for Chemicals SAP for Mill Products SAP for Oil & Gas SAP for Mining SAP for Life Sciences

Designed for Industry — Scaled for Business — Ready for the Future


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In the "SAP Industry Solutions–Overview" lesson, you learned that SAP ensures that our industry solutions provide the end-to-end functionality needed to run your customers' enterprises more efficiently. These comprehensive solutions are now available for more than 25 industries, one of which is SAP for Utilities. We'll begin by looking at the challenges that utility companies face today.

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UTILITIES INDUSTRY – A TIME OF CHALLENGE

“This is a time of significant change and challenge for utilities. The best companies will adapt and thrive amidst the new market dynamics and will use information technology as the basis for their success.” - Zarko Sumic, Vice President, META Group, Inc. © SAP AG 2005, Channel Partner Sales Training

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According to Zarko Sumic, Vice President of META Group, Inc., “This is a time of significant change and challenge for utilities. The best companies will adapt and thrive amidst the new market dynamics and will use information technology as the basis for their success.”

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UTILITIES INDUSTRY – A TIME OF CHALLENGE

“This is a time of significant change and challenge for utilities. The best companies will adapt and thrive amidst the new market dynamics and will use information technology as the basis for their success.” - Zarko Sumic, Vice President, META Group, Inc. © SAP AG 2005, Channel Partner Sales Training

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As you have just heard, the utilities industry is facing significant challenges. Today’s utilities face ongoing demands from regulatory bodies, as well as constant pressure to raise productivity and lower costs. As energy markets are undergoing a complex transition from incumbent to competitive and are moving toward increasingly global operations and cooperation, utilities must remain focused on their primary goal: to provide more competitive electricity, gas and water services for residential, commercial and industrial customers. To do this, utilities are looking beyond standard practices to new business strategies that promise results. But what strategies and practices are right for a given company? How can it thrive amid regulatory and public scrutiny? How can it balance reliability of supply, operational excellence, and workforce optimization? And what are the best solutions for facilitating its strategies? To answer these questions, utilities can benefit from strategic insight and practical advice from thought leaders within the utilities industry.

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SAP SOLUTIONS FOR ELECTRICITY, GAS AND WATER UTILITIES

The SAP for Utilities set of solutions is designed to help utilities master business processes along the entire asset- and customer-centric value chain and across all segments—including electricity, gas and water.


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The SAP for Utilities set of solutions is designed to help utilities master business processes along the entire asset- and customer-centric value chain and across all segments—including electricity, gas and water. SAP for Utilities provides a number of tools to help optimize these processes.

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SAP FOR UTILITIES – SOLUTION MAP


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One of these tools is the solution map, which is built using input from customers and industry analysts, and added to the technical expertise SAP has acquired through our own extensive business experience and research. SAP solution maps are multilevel blueprints of processes defined for a particular industry. They help your customers visualize, plan, and implement a coherent, integrated and comprehensive information technology solution. They also show how various business processes are handled, including those processes supported by SAP and our partners. With solution maps, your customers quickly understand business solutions and the business value they can bring. We'll now look at an overview of the Solution Map for the SAP for Utilities solution.

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SAP SOLUTION MAP – UTILITIES Suppliers & Partners

Generation

Transmission & Distribution

Meter Operation

Retail & Services

Customers & Channels

Asset Lifecycle & Resource Management Supply Operations Meter Reading Services

Energy Capital Management Selling of Energy and Services Customer Service Management Billing of Energy and Services Customer Financial Management Collaborative Services & Intercompany Data Exchange Enterprise Management & Support Analytics Strategic Enterprise Management

Financial Analytics

Operations Analytics

Workforce Analytics

Management Accounting

Corporate Governance

Financials Financial Supply Chain Management Talent Management

Travel Management Lifecycle Data Management

Financial Accounting

Human Capital Management Workforce Process HCM Service Delivery Workforce Deployment Management Corporate Services Environment, Health Incentive and Commission Real Estate Management and Safety Management Operations Support Project Portfolio Quality Management Indirect Procurement Global Trade Services Management


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The SAP for Utilities Solution Map shows the industry value chain at the top, which details the different processes and operations within the industry. And for each of these processes, the maps have interactive drill-down functionality.

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Generation


Meter Operation

Retail & Services


Asset Lifecycle & Resource Management Plant Engineering and Construction Plant Maintenance and Operations Decommissioning

Supply Operations Meter Reading Services

Capital Management The Asset Lifecycle andEnergy Resource Management Selling of Energy and Services scenario group supports all processes for the planning, Customer Service Management construction, operation, maintenance and disconnection Billing of Energy and Services of technical installations. Customer Financial Management Collaborative Services & Intercompany Data Exchange Enterprise Management & Support Analytics Strategic Enterprise Management

Financial Analytics

Operations Analytics

Workforce Analytics

Management Accounting

Corporate Governance

Financials Financial Supply Chain Management Talent Management

Financial Accounting

Human Capital Management Workforce Process HCM Service Delivery Management

Workforce Deployment

Corporate Services


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Here you see detail on the Asset Lifecycle and Resource Management scenario group, which supports all processes for the planning, construction, operation, maintenance, and disconnection of technical installations. As we follow the drill-down functionality for the Asset Lifecycle and Resource Management group, you are then presented with the additional functions of: •

Plant Engineering and Construction,

•

Plant Maintenance and Operations, and

•

Decommissioning.

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Generation


Meter Operation

Retail & Services


Asset Lifecycle & Resource Management Plant Engineering and Construction Plant Maintenance and Operations Decommissioning

Business Goals & Objectives Managing Fixed Assets & Resources

Reduce lifecycle costs Optimize capital equipment and asset utilization

Project Execution

Project Planning and Scoping

The plant engineering and construction scenario supports engineering processes and facilitates construction project management tasks.

Document Management


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From that level, you can drill down still further from the Plant Engineering and Construction scenario, which supports engineering processes and facilitates construction project management tasks. You are then presented with the tasks and processes that fall within this area, including Project Execution, Project Planning and Scoping, and Document Management. You are also provided with information on how SAP provides the solution. The complete solution map for the utilities industry is available at www.sap.com/solutions/businessmaps. And for more information on the use of solution maps, please refer to the "SAP Solution Composer and SAP Business Maps—Overview" lesson in Learning Map 2, as well as the lesson on “How to Use Solution Composer” in the Just-in-Time section of Learning Map 2.

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SAP FOR UTILITIES – BUSINESS PROCESSES


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We will now move on to discuss the common business processes within the SAP for Utilities industry solution.

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The SAP for Utilities solution portfolio enables utilities of any size to manage and optimize core business processes. The solution provides the functionality needed to increase operational efficiencies, mitigate and manage risk, and drive innovation throughout the value chain. Additional benefits include enterprise-wide visibility for better decision making and competitive advantage.

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Generation utilities

Transmission and distribution utilities

Retail and services utilities

Water utilities


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And SAP solutions support business processes in specific segments within the utilities industry, addressing the needs of various types of utilities. Generation utilities, for example, handle key engineering activities, perform plant operations and maintenance, and manage decommissioning of generation units or plants.

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Water utilities


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Transmission and distribution utilities operate and maintain the grid infrastructure; perform a comprehensive range of billing procedures; handle reconciliation, settlement, and supplier-switch activities in deregulated markets; and manage complex energy data.

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Water utilities


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Retail and services utilities manage marketing campaigns and multichannel sales processes, increase the service efficiency, perform a comprehensive range of billing procedures, and handle supplier-switch activities in deregulated markets.

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Water utilities


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And water utilities manage the connection and device infrastructure, handle customerservice activities, and take advantage of the functionality for accounts receivable and collections handling.

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SAP FOR UTILITIES – BUSINESS BENEFITS


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So how does the SAP for Utilities Industry Solution deliver business benefits for your customers? Let’s take a look…

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Enhanced responsiveness

Increased efficiency of back-office processes

Improved asset management

More efficient collaborative services

Improved security and safety compliance

Enhanced sales and marketing

Improved customer service for more loyal customers

Simplified workforce processes

Better integration of financial information

Lower Total Cost of Ownership


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SAP for Utilities delivers new efficiencies in business processes, customer relationships, and partnerships, and offers additional business benefits, such as enhanced responsiveness. This enables enterprise-wide visibility for better decision making in key business areas, which leads to increased operational efficiency, reduced risk, and greater innovation throughout your customer's value chain.

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SAP solutions support the mass processing of consumption billing and customer-related financial data, increasing the efficiency of back-office processes. SAP solutions also integrate financial and customer service capabilities, and help your customers comply with compliance requirements, such as those of the Sarbanes-Oxley Act.

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SAP solutions offer your customers' companies improved asset management, as their companies can manage assets throughout their lifecycle, integrating information and processes from financials, procurement, plant and network maintenance, and technical systems.

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SAP solutions enable efficient data exchange with suppliers, contractors, regulators and market participants for more efficient collaborative services.

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The SAP for Utilities solution improves security and safety compliance, through supporting validations of critical work sequences and responsibilities, providing clear audit trails and enabling the analysis of failures and their causes.

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With SAP solutions, utilities gain enhanced sales and marketing capabilities, as they can execute commercial, industrial, chain and clustered-sales contracts. The management of sales order processes for residential clients is also provided.

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SAP solutions improve customer service for residential, chain, commercial and industrial customers. They can assist in delivering fast and personalized services, provide up-tothe-minute account information and manage service-level agreements, which leads to more loyal customers and greater profit. According to a satisfied customer at Energie AG, “The main advantage is that—thanks to total integration with SAP for Utilities and its energy data management capabilities—we were able to improve customer information and billing processes considerably and perform our sales activities much more efficiently.”

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SAP solutions help identify and retain top performers, align employee and organizational goals, and optimize training with human resources. These simplified workforce processes also streamline key processes involving administration, payroll, time management and legal reporting.

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SAP solutions integrate financial data with management processes for effective decision making. Better integration of financial information improves investor communications, streamlines the financial supply chain, and reduces transaction costs.

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And SAP for Utilities enables the leveraging of existing IT investments and integrates with Computer-aided Design (or CAD), Computer-aided Manufacturing (or CAM), plant information, Supervisory Control and Data Acquisition (or SCADA), outage management, portfolio management and automated meter-reading systems, all of which results in lower Total Cost of Ownership.

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SAP FOR UTILITIES – MEETING INDUSTRY REQUIREMENTS


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Here are some examples of how SAP meets the specific requirements of the utilities industry, through functionality that meets the needs of your present and future customer base:

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MEETING INDUSTRY REQUIREMENTS

Increase responsiveness through enterprise-wide visibility

Solidify risk management

Manage regulatory compliance

Improve asset utilization and reliability

Automate core billing and settlement processes

Excel in service management to increase customer loyalty

Acquire new customers with expanded service portfolios


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SAP solutions increase your customers' responsiveness through enterprise-wide visibility for better decision making in critical business areas. This helps increase operational efficiency, mitigates risk, and supports innovation. In addition, SAP for Utilities integrates the entire utilities value chain—from meter reading to invoicing, and from design to decommissioning.

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SAP solutions help your customers solidify risk management through efficient load schedule management, reliable forecasting, and the management of high-volume interval data. And your utilities customers can integrate information and processes from portfolio management, energy trading, and risk management.

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SAP solutions improve corporate governance and help your customers manage regulatory compliance by providing functions that centralize the documentation of internal controls. These functions include online controls for internal and external auditors, as well as the ability to export data to auditing software. This enables detailed insight into audit functions and provides faster, more accurate reporting. And support for whistleblowers helps organizations cost-effectively address the legal requirements of the Sarbanes-Oxley Act and reduce the risk of noncompliance.

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SAP solutions help utilities take a strategic approach to managing assets throughout the equipment lifecycle, and improve asset utilization and reliability. SAP solutions integrate information and processes from financials, investment planning, procurement, plant and network maintenance, and work clearance management and connect project and work management capabilities with best-of-breed solutions for geographic information systems, scheduling, outage management and construction planning.

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SAP solutions automate core billing and settlement processes by meeting the demands for mass processing of billing consumption and customer-related financial data. This integrates the flow of data, such as meter reading, credit processing, and collections, while facilitating compliance with legal requirements. SAP solutions enable efficient and automated data exchange processes with suppliers and contractors, regulators, and market participants, and support the management of high-volume data like billing and settlement processes.

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SAP solutions help utilities excel in customer service management for residential, chain, commercial, and industrial customers to increase customer loyalty and build profitable customer relations. Utilities can deliver fast and personalized services; provide up-to-theminute information on interaction history, technical environment, and account status; and effectively manage service-level agreements.

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And finally, SAP solutions make it easier than ever for your customers to themselves acquire new customers with expanded service portfolios. SAP solutions support commercial, industrial, chain, and clustered sales contracts, and offer closed-loop processes from quotation to service delivery. Utilities can design, coordinate, execute, and evaluate targeted and personalized marketing campaigns by using utility-specific information, such as consumer behavior or technical environment. Sales and marketing are tightly integrated with service, billing, financials, and energy data management, which supports efficient acquisition, service, data exchange, and partner collaboration.

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SAP FOR UTILITIES – CUSTOMERS


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One of the best measures of the success of SAP's solutions is the satisfaction of our customers. Let’s look at the track record for SAP Industry Solutions for Utilities.

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SAMPLE OF CUSTOMERS USING SAP FOR UTILITIES

EDF, France

Entergy, U.S.

Enel, Italy

FirstEnergy, U.S.

EDP, Portugal

City of Tacoma, U.S.

RWE, Germany

Public Service Electric & Gas, U.S.

E.ON, Germany

BC Hydro, Canada

EnBW, Germany

GazMet, Canada

Vattenfall, Nordics/Germany

CLP Power, Hong Kong

Centrica, UK

Kyushu Electric Power, Japan

Yorkshire Water, UK

EnergyAustralia, Australia

Electrabel, Belgium

City of Cape Town, South Africa

NUON, Netherlands

Aguas Argentinas, Argentina

Iberdrola, Spain

Bandeirante Energia, Brazil


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SAP for Utilities solutions are currently used around the world by more than 950 investorowned and public utilities in electricity, gas and water. The companies listed here represent just some of the customers of SAP for Utilities, many of whom have achieved significant benefits. We would like to share with you what some of these customers have to say:

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CUSTOMERS USING SAP FOR UTILITIES

“The main advantage is that thanks to total integration with SAP for Utilities and its energy data management capabilities, we were able to improve customer information and billing processes considerably and perform our sales activities much more efficiently.” - Dr. Stefan L. Grill, Project Lead, Energie AG


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Dr. Stefan L. Grill, Project Lead for Energie AG says “The main advantage is that thanks to total integration with SAP for Utilities and its energy data management capabilities, we were able to improve customer information and billing processes considerably and perform our sales activities much more efficiently.”

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“Thanks to efficient communication through SAP solutions for mobile business, we anticipate that our employees will gain 30 minutes a day in productivity. If you multiply this by 1,500 service employees, the return on investment is impressive.” - Conny Frankenberg, IT Project Executive, Vattenfall Service Company


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And from Conny Frankenberg, IT Project Executive of Vattenfall Service Company: "Thanks to efficient communication through SAP solutions for mobile business, we anticipate that our employees will gain 30 minutes a day in productivity. If you multiply this by 1,500 service employees, the return on investment is impressive.”

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“SAP for Utilities helps us meet our overall strategy to support growth and implement business process efficiencies to continue to deliver value to our customers. SAP delivers a high degree of flexibility and adaptability to support the needs of all customer groups—residential, commercial and industrial.” - Hughes Beaudoin, IT Director, Gaz Métropolitain


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According to Hughes Beaudoin, IT director of Gaz Métropolitain: “SAP for Utilities helps us meet our overall strategy to support growth and implement business process efficiencies to continue to deliver value to our customers. SAP delivers a high degree of flexibility and adaptability to support the needs of all customer groups— residential, commercial and industrial.”

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“SAP for Utilities offers companies great flexibility, increasing their efficiency and their capability to explore new business opportunities.” - J. Guimarães, Director of the ClienteMais Project, Electricidade de Portugal, S.A.


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From J. Guimarães, Director of the ClienteMais Project of Electricidade de Portugal: “SAP for Utilities offers companies great flexibility, increasing their efficiency and their capability to explore new business opportunities.”

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“All tasks [Strategic Enterprise Management, activity-based costing, and balanced scorecard] are linked in real time. Synchronous information has upgraded employees’ operational capability. And the system ensures business transparency throughout the entire asset value chain.” - Woo Bang Lee, Head of the Enterprise ERP Office, Korea Hydro & Nuclear Power Company © SAP AG 2005, Channel Partner Sales Training

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And from Woo Bang Lee, Head of the Enterprise ERP Office of the Korea Hydro & Nuclear Power Company: “All tasks [Strategic Enterprise Management, activity-based costing, and balanced scorecard] are linked in real time. Synchronous information has upgraded employees’ operational capability. And the system ensures business transparency throughout the entire asset value chain.”

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SUMMARY

SAP for Utilities is used by over 950 companies around the world, helping utilities master business processes along the entire value chain.

SAP for Utilities’ Solution Map shows the industry value chain at the top, with interactive drill-down functionality.

SAP for Utilities enables utility companies to optimize core business processes with functionality that includes: z

Increasing operational efficiencies

z

Mitigating and managing risk

z

Driving innovation throughout the value chain


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SAP for Utilities is used by over 950 companies around the world, helping utilities master business processes along the entire value chain. SAP for Utilities’ Solution Map shows the industry value chain at the top, with interactive drill-down functionality. SAP for Utilities enables utility companies to optimize core business processes with functionality that includes: •

Increasing operational efficiencies,

•

Mitigating and managing risk, and

•

Driving innovation throughout the value chain.

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LEARNING OBJECTIVES RECAP

You should now be able to:

Identify the challenges, business processes and requirements of the utilities industry

Explain how the SAP for Utilities industry solution delivers benefits for the utilities industry

Describe the SAP Utilities Solution Map and value chain


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You should now be able to: •

Identify the challenges, business processes, and requirements of the utilities industry,

•

Explain how the SAP for Utilities industry solution delivers benefits for the utilities industry, and

•

Describe the SAP Utilities Solution Map and value chain.

If you feel you need to review any part of this lesson, use the navigation bar on the lefthand side of the screen to jump to a particular section.

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SAP For Utilities

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