S/4 for the energy industry

It is about the digitization of business processes and business models, and the topics of smart meter rollout and smart meter gateway are also being implemented. In addition, there are the data protection requirements and the regular format adjustments.

SAP is additionally expanding the need for planning to include the topic of S/4 Hana. Whereby S/4 Utilities is so far only understood as an announcement of the urgently awaited industry solution of S/4 Hana, which is to replace SAP IS-U.

SAP IS-U currently handles the majority of energy billing in Germany. This raises the pressing question of when and how to migrate the IS-U system to SAP's new Business Suite by 2025.

The Idex component of IS-U, which has not yet been released, as well as the associated uncertainty are complicating current planning projects in the utility environment. According to current knowledge, this uncertainty is to be resolved with the S/4 Hana Release 2018. Idex will then finally be released as well.

With the development of its own market communication platform from the SAP Cloud, SAP is also competing with long-standing industry experts for the first time. The resulting hybrid architecture of the on-premise Business Suite and innovative cloud solutions is already familiar from the combination of SAP HCM and SuccessFactors and will strongly converge on integration with Hybris in the utilities environment.

However, the use of Software as a Service is not a simple question of solution design, but should be answered with strategic depth and in a way that is compatible with compliance. In addition to the challenge of S/4 Utilities, IT must first deal with the topic of Hana.

The maturity of SAP customers' Hana adaptations is still very diverse. Some utilities have already been productive with their first Hana systems for years, while others are only just starting to design them.

Sourcing on the test bench

The change process associated with Hana should not be underestimated. Some companies are taking this as an opportunity to put their sourcing strategy to the test, while others have to address fundamental know-how and infrastructure issues.

The well-known SAP service providers, on the other hand, have usually been Hana-ready for a long time. The decision to convert to S/4 Utilities is not usually made without a corresponding business case.

Current Hana decisions are often supported by positive effects in the replacement of non-SAP database maintenance. The business case for S/4 Hana only emerges with a process-related evaluation of the application.

Compatibility mode

When converting to S/4 Hana, it is imperative to take note of the compatibility mode, which can have an impact on application licensing. With it, SAP offers the option of being able to use discontinued Business Suite functions in S/4 Hana until 2025.

This enables customers to switch to S/4 Hana step by step. The compatibility mode can thus be a significant success guarantee for the acceptance of an S/4 utility. The SAP systems surrounding IS-U are also subject to a need for modernization.

Many customers take the planning pressure as an opportunity to analyze their entire SAP landscape. One of the main topics is often reporting due to the integrated options now available in S/4 Hana.

In addition, SAP CRM in its final form until 2025 is a point of discussion for many utilities. SAP has also announced news in this regard for the upcoming S/4 release.

Commitment to Utilities

SAP's clear commitment to the Utilities industry solution has been evident since the end of 2017. The high level of uncertainty due to a roadmap that was little specified until then is expected to dissipate in the coming months.

Apart from this, it is already worthwhile to carry out an assessment of the change process through Hana or S/4 Hana. Preliminary investigations using SAP tools and the expertise of service providers as well as concrete Hana migration projects can be the first steps on the way to the new SAP Business Suite.

The number of S/4 Hana project references is currently growing visibly in the industry-neutral SAP environment and can be consulted as best practice for many challenges faced by utilities.