⚡ Quick Look: Victorian Energy System Backbone - SAP

I have seen a demand for SAP S/4HANA Utilities in the job market. So, I wonder what is happening.

There are five electricity distributors in Victoria: CitiPower, Jemena, Powercor, AusNet Services and United Energy. Energy retailers are different to energy distributors. Energy retailers such as AGL, Origin, EnergyAustralia are in charge of individual energy accounts and power bills. So while an energy distribution network cannot be chosen (unless customers move house), an energy provider can be chosen. [1]

https://www.canstarblue.com.au/electricity/vic-electricity-distribution-companies/

It is not surprising that these companies mentioned above run SAP, 92% of the Forbes Global 2000 run SAP. Likely SAP and major partners have been providing premium services and special attention to them.

We can find, from the Australian Energy Regulator, the business cases for the SAP upgrade, i.e., SAP S/4HANA migration. So, based on public information, here is my quick (and humble) analysis. So, feel free to comment, update, or call out any misunderstanding:

Jemena

• Jemena runs SAP ERP with IS-U (Industry-Specific Solution for Utilities) on MSSQL (Microsoft SQL Server) database.
• The recommendation was to not migrate to SAP S/4HANA yet. However, it should be starting the phase0 soon, to get more clarity on data, integration and experience strategies as well as business processes (and custom code).
• It considered replacing SAP with Oracle.

AusNet

• Although, the recommendation in 2022 was to not migrate to SAP S/4HANA [3], I was able to find an update: AusNet has gone live with S/4HANA for Utilities. [8]
• Before that, focus was on moving the remaining HR capabilities in the SAP HR component from the SAP ERP on-premise (core and payroll) to the SAP cloud solution, SAP SuccessFactors.
• Based on SAP customer stories, AusNet has also expanded the footprint with SAP Concur and SAP Ariba.

United Energy, CitiPower and Powercor

• Ambitious — and I like it!
• CitiPower & Powercor run in the same SAP ERP system — without Industry-Specific Solution for Utilities (IS-U).
• United Energy uses a separate SAP ERP — with IS-U.
• The recommendation is to migrate both to SAP S/4HANA, and consolidate them into a single installation, however, in two different clients.

You can also found the plans for South Australia (SA Power Networks) and New South Wales (AusGrid) below, which seem to have a more enterprise-view and customer-centric approaches.

Overall, companies that have not continuously invested in innovations may have a harder time to get ready for the migration. Also, there might be more opportunities for rationalisation and simplification with SAP’s energy-specific cloud applications.

The investment to move forward? AusGrid (NSW) estimated $149M to migrate to SAP S/4HANA, so Jemena estimated $125M based on AusGrid’s… SA Power Networks estimated around $108M. AusNet’s estimate was up to $65M.

As a customer, this research also helped to understand the responsibilities when there is a power outage, or when we are overcharged [7].

I worked with SAP for more than two decades. I have assured companies that their path is safer and better by reviewing (and also correcting) the strategic direction. If you need a fresh pair of eyes to look at your SAP landscape, transformation and strategy, do not hesitate to contact me.

References

1. Canstarblue — VIC electricity distribution companies
2. Jemena — Investment Plan — ERP Upgrade
3. AusNet — Investment Plan — ERP Upgrade
4. United Energy, CitiPower and Powercor — Investment Plan — ERP Upgrade
5. SA Power Networks — Investment Plan — ERP Upgrade
6. Ausgrid — Investment Plan — ERP Upgrade
7. Statement — AGL appeal of Centrepay decision
8. LinkedIn post about AusNet

SAP #utilities #australia #energy #S4HANA #transformation #cloudERP #liftandshift #HANA #enterprisearchitecture #solutionsarchitecture