SAP Cloud for Utilities

1 2018 SAP SE or an SAP affiliate company. All rights reserved. PUBLIC/19 SAP Cloud for UtilitiesAcceleratedigital transformation with an integrated Cloud platform that lets Utilities pursue new digital business models and achieve sustainable growth. 2018 SAP SE or an SAP affiliate company. All rights are the trends in the Utilities industry?Deliver on strategic priorities to move beyond traditional utilitiesDecentralization, deregulation, decarbonization, and digitalization disrupt established business models for the Utilities industry but they don t show a clear road to the future. We see Utilities redefining their business models and restructuring the value chain. New value comes with smart alignment along four main business operations that reflect the volatile market situation:Omnichannel retail to digitalized consumersConsumers expect reliable and affordable energy supply with maximum convenience.

2 The emergence of prosumers and increasing environmental and energy awareness broaden the scope of customer interactions and increase addressable consumer spend. Smart and efficient distributionDecentralized, renewable energy still needs powerful grids to deliver electricity. Whether transmission and distribution are paid by the energy (KWh) or load (KW), excellence in grid building, operations, and maintenance is key for and supply management servicesThe intermittent character of renewable energy sources generates business opportunities around balancing services in the energy system either by storing cheap and releasing expensive energy, or by influencing the demand side to shift consumption and save energy resource excellenceAt near-zero marginal cost for the generation of renewable energy, commissioning and efficient operations of assets for renewable and conventional power generation are key to maximizing generation business process for the digital energy prosumer.

3 Moving from a meter obsession to customer empathyUtility responds to requests of customerCustomer closes contract for point of deliveryUtility measures consumptionUtility bills the customerUtility delivers energyFromManage assets (solar panels, wall batteries, and so on)Integrate smart home to optimize energy useOffer energy storage as a serviceManage virtual power plant and exchange with energy marketsOperate e-mobility fleetsProsumerToMachine learningBlockchainIoTMobile devicesBigDataPredictive analyticsNew outcomesCurrent modelRate payerLittle to zero marginsLosing market shareHigh churn rateCustomer engagementRevenue from new energy servicesShare of energy wallet Reduced customer churn 2018 SAP SE or an SAP affiliate company. All rights the end-to-end digital Utilities value chainDigital business models influence all areas of an end-to-end Utilities value engagement and commerce: Utilities must drive profitability and customer loyalty by creatinga 360-degree view of the customer and the ability to personalize offers at each moment of the decision point.

4 They also canlisten andengage withcustomersin real time with relevant information,andtranslate individual experiences into satisfying end-to-end customer and operations: Utilities must minimize downtime and optimize asset lifecycle costs with a single, real-time view of operations and business data, from fuel supply optimization and digital asset management to metering. They can manage enterprise assets efficiently by combining powerful analytics and field-force enablement. Support advanced maintenance strategies and collaboration of Utilities with assetmanufacturers and service providers resources: Utilities must find the right talent, develop future leaders, and engage every employee through human resources. Enable growth and sustainability through simplified processes, real-time workforce insight, global experience, and flexible deployment transparency: Utilities must meet the expectations of their stakeholders regardless of the digital business model they adopt.

5 Ensure financialvisibility and compliance for products and services, including billing and revenue excellence: Utilities need to manage global supply risk and protect profitability despite volatile pricing in many supply markets and contribute new innovations to the business in a networked operationsEfficientHRorchestrationCompli antFinancetransparencyResponsiveProcurem entexcellence 2018 SAP SE or an SAP affiliate company. All rights Cloud for UtilitiesThe SAP Cloud for Utilities solution is the next-generation industrybusiness solution that supports next-generation, end-to-end industry processes across all business functions, at scale, in the Cloud , and in real time using leading technology innovations that help utility companies compete in a digital value comes through simplification of the user experience, architecture, and business processes that frees up resources to deliver innovation and accelerate digital blocks of SAP Cloud for business processes with industry best practices for customer centricity, product agility, business-network orchestration, workforce management and financial Digital Boardroom for use in Utilities for integrated analytics such as asset operations, call center performance.

6 And peak load with SAP Cloud Platform to integrate and extend applications and enable an exceptional user experience, using mobile solutions, machine learning, and blockchain capabilities with the Internet of Things (IoT) user experience across the entire solution49%higher operating margin achieved by organizations that leverage the Cloud to rapidly innovate Source: SAP Performance Benchmarking, 2017 OmnichannelCustomerEngagementMarketingDi gital commerceSalesIncentivesLoyaltyUsageand behaviorDigitalAssetand operationsEfficientHRorchestrationCompli antFinancetransparencyResponsiveProcurem entexcellenceDeliveryPlanningConsolidati onLogisticsProcurementMarketplaceSAP Digital BoardroomPredictionAnalyticsDigital InnovationData IntelligenceInternet of ThingsNext PracticesBlockchainBig DataSAP Cloud PlatformMachine LearningModern User InterfacePredictive analyticsAsset networkFuel supplyEnvironmental health and safetyHR and talentTravel and mobilityTrainingContingent laborAccountingPerformance and profitabilityRevenue managementBilling 2018 SAP SE or an SAP affiliate company.

7 All rights Cloud for Utilities : Building blocks End-to-end business processes Multichannel front office to attract, cultivate, and retain customers Insight into asset performance and intelligence for optimal operations Network to orchestrate procurement, logistics, and delivery Workforce management for internal and external staff Back office to enable financial transparency of all business activitiesWatch videoInnovation with SAP Cloud Platform Access to an open, comprehensive environment for Cloud application development Innovative use cases including gas pipeline integrity, waste and recycling logistics, maintenance in dangerous areas, and water leakage management Bring together the powerful capabilities of IoT, machine learning, blockchain, Big Data, analytics, and the Cloud with the SAP Leonardo digital innovation system Accelerate innovation, integration, and scale across your entire organizationDigital boardroom for Utilities Answer ad hoc questions on the fly Monitor performance against critical success factors such as loss ratios Analyze root causes and simulate the impact of decisions Determine the effect on key performance metrics and profitabilityModern user experience with the SAP Fiori UX Deliver the right information at the right time through multifaceted user interfaces Get instant, relevant insight whether using mobile apps or a desktop computer Zero in on your most important tasks, functions, and activities Deliver a consistent UX across the enterprise with a personalized, responsive, and simple experience Watch videoWatch videoWatch video 2018 SAP SE or an SAP affiliate company.

8 All rights end-to-end process for utilitiesTraditional ProcessNext-Generation ProcessDigitalization of the Utilities sales processToday s Utilities customers expect holistic online self-services so they can easily manage their business relationship with their service provider 24x7. At the same time, extensive customer acquisition and service processes are key cost drivers. Most utility companies strive toautomate as many customer interaction processes as possible with digital customer self-services. Easy self-service functions (such as change of master data, and entering of meter data) are state of the art. But many Utilities still struggle with end-to-end automation of the critical customer acquisition process due to missing e-commerce functionality for the typical Utilities customer enrollment process. Hence, most Utilities still rely on costly and time-consuming manual sales processes using phone or other direct interaction channels.

9 The integration of SAP Hybris Commerce Cloud solutions with the SAP S/4 HANA Utilities solution closes this gap and provides Utilities with powerful features to combine their classic energy services with value-adding services and goods in innovative product bundles. Target group identification is based on historic data. Sales rep contacts the identified prospect by rep presents an offering to the prospect. Sales rep sends the individual quotationby mail. Customer signs the quotation and sends it back to the agent creates the master data in the agent creates the sales order for delivery of the loyalty award (iPad). Back-office agent initiates the supply switch receives enrollment confirmation and a welcome of the identified prospects receives an e-mail with a personalized offering and a link to the utility s Web prospect compares various product bundles, choses a gas/electricity bundle with a special promo offer (free iPad), and enrolls online for the service.

10 The SAP solution automatically creates the necessary master data in the back office and triggers all relevant activities to process the customer switch according to the regulatory framework and the delivery of the loyalty award (iPad).The marketing manager identifies the target group for the promotion campaign (electricity/gas bundle) based on real-time social media Hybris Marketing solutionCross-system integration (SAP Hybris Commerce and SAP Cloud for Utilities solution) SAP Hybris Commerce solutionEnablerThe customer receives enrollment confirmation and a welcome message according to their preferred communication channel. 2018 SAP SE or an SAP affiliate company. All rights Cloud for Utilities : Value propositionSAP Cloud for Utilities provides utility companies with a proven framework to adopt industry best practices while attaining operational excellence across customer engagement management, asset lifecycle management, and financial processes.