The age of on-site software systems is coming to an end in many areas of application. Instead, cloud systems are increasingly taking on a more important role: According to KPMG’s Cloud Monitor 2020, 78 percent of companies believe that this technology contributes significantly to digitalization. In the energy sector, the issue is particularly urgent, because many utilities’ old IT systems are nearing the end of their support or are rather unwieldy “IT stacks” – it would be better for companies to dismantle these now so that they can act more quickly in the future. What does the alternative to SAP IS-U, Oracle Utilities and Co. look like?
Anyone who uses an old smartphone whose manufacturer no longer offers updates for its operating system knows the feeling: Uncertainty. Is your own data still safe and for how long can you download new apps? Decision-makers in those utilities whose legacy IT systems have grown over the last 15 to 20 years (mostly on the basis of decentralized in-house developments) and which will soon no longer be supported by the software provider, have a similar situation. There is enormous pressure to act because the systems control many sales functions, for example – and are therefore indispensable for future customer growth and economic success.
So “business as usual” is not an option. It is therefore hardly surprising that utilities are now looking to increase their investment in digitalization, according to the findings of last year’s “Digital@EVU” study by BDEW – German Association of Energy and Water Industries, Kearney and IMP3ROVE. More than 85 percent of the electric utilities surveyed expect their digitalization budgets to increase in the coming years. According to “Digital@EVU”, the focus is on three action areas: the transformation of value creation, greater customer focus, and the creation of a largely digital enterprise.
Finally getting rid of the old IT stack
But precisely how can these goals be achieved and which IT system is the right one? An interesting answer can be found in Accenture’s “Future Systems” study. Among other things, it compares “global pioneers” with German utilities and reaches some impressive conclusions. According to the report, 88 percent of leaders believe that the entire IT stack (i.e., the existing static legacy “stack” of software, hardware, data, telecommunications and data centers) needs to be dismantled – to make way for much more adaptive systems. However, according to Future Systems, only 38 percent of representatives of German utilities agree with this assessment. Consequently, the “global pioneers” are further down the road in adopting sophisticated cloud services: 95 percent of them have already introduced such systems, whereas only 30 percent of the latecomers among companies have done so.
On-site vs. cloud
Incidentally, an old (and long outdated) prejudice appears in the Accenture study when the term “cloud” is mentioned, because for the latecomers, cloud services are primarily “a low-cost data center”. Of course, this is a disastrous mistake from the point of view of the “pioneers” who see cloud computing as an indispensable prerequisite for the successful use of myriad other technologies – from artificial intelligence to data analytics. In addition, the advantages of the cloud over static on-site solutions are obvious: lower investment costs, faster availability and contracts with more flexible durations are just a few of the key factors here. In addition, cloud solutions can be adapted much more quickly and expanded with additional options if, for example, new business models require this or market requirements change.
This flexibility is likely to be an essential prerequisite for electric utilities in particular, because in their markets it is truer than ever: Everything is in flux. Startups as well as large companies from outside the industry are pushing ever faster into the market and creating cut-throat competition. At the same time, new products and services are emerging – the days when utilities only offered electricity and gas are over. Instead, wallboxes, PV systems or cell phone contracts, for example, are also sold via personalized portals using cross- and up-selling.
powercloud meets critical future requirements
What does all this mean for billing systems? In response to this, pwc has defined a whole range of requirements that new systems must fulfil in its market study “ERP Systems in the Energy Industry”. These include the creation of customized products and flexible pricing structures, scalable and automatable IT processes, as well as real-time billing – prerequisites that are all fulfilled by the powercloud. Two examples of this:
- “Automated processes”: The powercloud includes standardized and automated processes as well as fast updates (for example, due to changes in statutory requirements or as part of market partner communications). New requirements are implemented through an agile process and are quickly available for testing and productive use, without customers having to complete complex updating procedures.
- “New products”: With the cloud-based, end-to-end software for the utility market, you only need a few clicks to fully automatically design a billable product and publish it ad hoc on the market! Without the need to involve developers or complex configurations, any non-commodity bundle can be defined that goes far beyond the classic electricity-gas bundle. The powercloud’s open architecture helps in the processing and fulfillment of these contracts. For example, hardware suppliers can be directly linked to the powercloud processes.
Speed up modernization
To conclude, a few words about the implementation and licensing of the cloud-based system – critical issues for users of established systems such as SAP IS-U or Oracle Utilities. In the past, many have experienced that the modernization of their IT solution invariably took a long time. This is where another major difference between the powercloud and legacy systems becomes apparent: The powercloud implementation uses a standardized best-practice process with defined onboarding modules. Depending on the starting point, the end-to-end solution is ready in just a few weeks, can be scaled at any time, and can therefore also be rolled out to new countries, for example. Nevertheless, the solution is in no way diminished. Stability, speed, and cost-efficiency all remain excellent.
The German SaaS solution’s licensing model is equally advantageous. It is based on the number of active end-customer contracts with no hidden costs. All services necessary for operation and all future updates are included. If, in recent years, your legacy system has been generating high costs due to in-house maintenance, updates and system testing, powercloud can help you say goodbye to these spiraling costs! The price for the end-to-end system includes all processes in your “energy industry engine room” – including all future updates.
About the author
Sam Schubert, a native Rhinelander, has been active with powercloud at the foot of the Black Forest since October 2019. The Product Manager is a familiar face in the customer environment of the energy industry, having supported German power supply companies for more than 10 years in integrating various regulatory requirements into the existing SAP IS-U. At powercloud, he continues to expand the functional scope of the cloud solution – both for existing customers and for meter and grid operators. His focus is no longer only on the German-speaking countries. Various European projects are also under his responsibility.