S/4 for the Energy Sector
Blog SOH and S/4

S/4 for the Energy Sector

The energy companies are waiting excitedly. Starting in 2018, SAP also wants to service the energy sector using S/4. An energy supplier’s IT tasks are extremely diverse now. They are about digitizing business processes and business models. Smart-meter roll-out and smart-meter gateway are also being put into effect.

The data-protection requirements and the regular format adaptations are added to this. SAP is further extending the need for planning, to include S/4 Hana. In this context, S/4 Utilities has up to now been understood solely as an announcement of S/4’s urgently awaited industry-specific solution. This is intended to take over from SAP IS-U. At present in Germany, SAP IS-U is used to take care of most energy-services invoicing. Related to this, there is the urgent question of when and how users convert their IS-U system to SAP’s new Business Suite by the year 2025.

The Idex components of the IS-U, not yet approved, and also the related uncertainty, make current planning projects more difficult in the energy supplier environment. According to the latest information, the S/4 Hana Release 2018 is going to end this uncertainty. The aim is for Idex to also be approved then. With the development of a market-communication platform of its own from the SAP Cloud, SAP is also competing with long-standing experts from the industry, for the first time. The resulting hybrid architecture consisting of the on-premise Business Suite and innovative cloud solutions is familiar, from the combination of SAP HCM and SuccessFactors.

In the Utilities environment, this is likely to result in an integration with Hybris. Yet the use of software as a service is not a simple question of the solution design. It should instead be answered with strategic depth and in a compliance-compatible way. In addition to the S/4 Utilities challenge, IT must initially concern itself with Hana. SAP customersꞌ Hana adaptions continue to have widely-varying levels of maturity. Some energy suppliers have been productive for years with first Hana systems, yet others are now only just starting with the conceptual work.

Sourcing is under scrutiny

The process of change associated with Hana should not be underestimated. This prompts some firms to put their sourcing strategy under scrutiny, others have to address basic questions regarding expertise and infrastructure. By contrast, the familiar SAP service providers have usually been Hana-ready for some time. The decision to switch to S/4 Utilities is typically not taken without a relevant business case. Decisions made now, favoring Hana, find themselves reinforced by positive effects regarding replacement of maintenance of non-SAP databases. The business case for S/4 Hana only emerges with a process-based assessment of the application.

Compatibilty mode

Users switching to S/4 Hana urgently need to take into account the compatibility mode. This can influence the application licensing. With this, SAP offers the chance to carry on using discontinued Business Suite functions up to 2025, also in S/4 Hana. This enables customers to switch to S/4 Hana in a step-by-step way. So the compatibility mode can take on the role of guaranteeing success for the acceptance of S/4 Utilities. Likewise, the SAP systems that surround the IS-U must also be modernized.

Many customers are prompted by this planning pressure to analyze their whole SAP landscape. One of the topics frequently emphasized in this is the reporting, because of the integrated possibilities now available in S/4 Hana. Beyond this, for many energy companies the SAP CRM is a discussion point regarding the final form that it takes between now and 2025. In this regard, SAP has likewise announced new developments for the forthcoming S/4 release.

Statement of commitment to Utilities

A clear SAP statement of commitment to the industry solution, Utilities, is very much in evidence since the end of 2017. The high level of uncertainty, because up to now the roadmap has not been specified sufficiently, can be expected to disappear over the next few months. Aside from this, it is already worthwhile to assess the change process that Hana or respectively S/4 Hana entail. Preliminary studies, with the aid of SAP tools and the expertise of service providers, in addition to specific Hana migration projects, can be the first steps on the path towards the new SAP Business Suite. The number of S/4-Hana project references is now visibly growing in the non-industry-specific  SAP environment. For many challenges that energy suppliers face, these references can be taken as a basis for best practice.

E-3 Magazine (German) February 2018

About the author

Michael Seifert, GISA

Michael Seifert is the head of Architecture Management & Business Transformation at GISA, an IT service provider from Germany.

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