Inside Sap

Issue 27 | Spring 2014

CASE STUDIESHYDRO TASMANIA, SPOTLIGHT, AND MORE

YOUR NEXT PARTNERSAP LEADERS PROFILED

www.insidesap.com.au

RITCHIE TAKES LEAD AT SAUG

B1 GETS A BOOST: SMES BACK IN THE MARKET

2015YEARBOOK

The independent magazine for SAP professionals

TODAYS CIO, TOMORROWS CEO? Making the jump to the top job

INSIDE THE C-SUITECxOs name their medium-term priorities

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www.insidesap.com.au 3

4 Editors note

5 News in focus

Hot Topics

8 Inside the C-suite: findings from the IBM global study

10 SME: Boost for Business One

Case Studies

14 Future thinking: Hydro Tasmania

18 Securing responsive support: Sympatex Holding

20 Opening up a new web channel: Spotlight

22 Parting of the ways: Colonial First State

24 Powering change: Energex and Ergon Energy

27 Engineering a global talent company: Tenova

29 Taking control of reconciliations and the balance sheet: Linfox

SAP Leaders

31 Ritchie takes lead at SAUG

33 Creating omni-channel operations: Larry Sweeney

34 Exchanging Excel for a better way: Therese Tucker

Careers

36 Todays CIO, tomorrows CEO?

41 Taking certification into the cloud

Technology

44 HR/Payroll: Time Evaluation made easy?

45 Mobility: Theres an app for that

46 SuccessFactors: What will get you here wont get you there

Events

48 SAUG Summit 2014

Company profiles

51 Company profiles

61 Vendor spotlight

8

33

20

36

24

51

CONTENTS

4 Inside SAP magazine

EDITOR

From the EditorWelcome to the Inside SAP Yearbook 2015. Around this time, our thoughts turn to predictions for the coming year. Weve certainly seen a huge focus on cloud, big data, and of course HANA over the last few years. My prediction is that 2015 will be the year of the line of business. There has already been a shift in the balance of power on buying decisions from purely IT towards the line of business; SAP has changed its marketing tune from Run Better to Run Simple, recognising a need for less complexity and faster time to value perfect for quick wins in the line of business; and were now seeing a dizzying array of point solutions designed specifi cally for the challenges of vertical markets. All of the macro trends cloud, mobile, big data, and social will be spun together like threads into twine to produce better, faster and more tailored solutions for specifi c business problems.

Of course, when one size doesnt fi t all, making the right choice is even more challenging for those who have to decide whats working and whats not. The role of the CIO is constantly changing in this new landscape, and in this edition, we ask, with the greater emphasis on using technology to gain competitive advantage, could todays CIO be tomorrows CEO? The key will be avoiding being pigeonholed as a technologist and again, understanding lines of business and what they need.

Speaking of paradigm shifts, SAP is changing the game on its certifi cation. Recognising that cloud solutions such as SuccessFactors and Ariba need a different model, SAP has redesigned the certifi cation process from the ground up for cloud and senior director global certifi cation Sue Martin has told us exactly how things are going to change.

Our Yearbook offers the chance to feature more case studies than ever, showcasing projects of vastly different types. We spoke to Hydro Tasmania about its massive ERP and mobility program, and the importance of change management in ensuring a diverse organisation was ready to adopt SAP. Spotlight expanded its e-commerce capability signifi cantly with a hybris implementation, while Colonial First State, when divesting some real estate assets, was faced with the challenge of separating one SAP instance into three, and used Amazon Web Service to good effect to maintain a secure process.

Finally, this edition includes company profi les from our valued partners. We encourage you to speak to these partners and fi nd out how they help you achieve your business objectives in 2015. With so much innovation in the SAP ecosystem, its an exciting place to be.

Freya Purnell Managing Editor, Inside SAP

The independent magazine for SAP professionals

Managing Editor/Publisher Freya Purnellt. (02) 9929 5465m. 0412 602 579freya@fl apjack.com.au

Director, Creative and Business Development Justin Knightst. (02) 9929 5465m. 0425 292 075justin@fl apjack.com.au

Sub-editor Nicholas Greene

Editorial Advisory CommitteeAdrian Everett (Everjoy), Paul Hawking (Victoria University), Calvin Kally (KALtech), Iain Macleod (CSC), Elaine Silver, Gough Venter (UXC Oxygen), Mick Windsor (Windsor Business Solutions)

Published by FlapJack Media Pty LtdPO Box 721Spit Junction NSW 2088ABN: 93 142 878 135

2014 FlapJack Media Pty Ltd. Inside SAP is published four times a year by FlapJack Media Pty Ltd. All rights reserved. No part of the publication may be reproduced in whole or part without the written permission of the publishers. FlapJack Media Pty Ltd makes no representation or warranties with respect to this magazine or its contents including, without limitation, material communicated by third parties. FlapJack Media Pty Ltd does not warrant that the information available in this magazine is accurate, complete or current. Opinions expressed are those of the respective authors and not necessarily of the publisher. Neither FlapJack Media Pty Ltd nor any persons involved in the preparation of this publication will be liable for any loss or damage as a result of use of or reliance upon advice, representation, statement, opinion or conclusion expressed in Inside SAP magazine.


NEWS IN FOCUSSAP

US$8.3 billion deal adds huge corporate travel market to SAPs business network Last quarter, SAP America announced the biggest deal in the companys history the acquisition of travel and expense management software leader Concur, with the purchase valued at US$8.3 billion.

Concur uses an open platform to connect the corporate travel ecosystem, including airlines, hotels and car rental companies, and has more than 23,000 customers, 4200 employees and 25 million active users in more than 150 countries. It also operates the popular TripIt app.

With the boards of both companies approving the transaction, the acquisition was expected to close in the fourth quarter of 2014, subject to regulatory approvals.

The corporate travel market globally is worth US$1.2 trillion, and this purchase extends SAPs reach into this market, adding transactions worth more than US$600 billion annually to SAPs business network.

Analysts presented mixed views on the acquisition, with some questioning whether the price was too high for what it brought to the SAP portfolio.

Commenting on the acquisition to The Wall Street Journal, Commerzbank analyst Thomas Becker said, The deal multiple is quite rich, given that travel and entertainment is not strengthening SAPs core business or bringing its cloud business (from a technological viewpoint) to the next level.

However other analysts from Citigroup said if SAP had similar success in executing the transaction as it did with fellow cloud acquisitions SuccessFactors and Ariba, the deal

would pay off.SAP CEO Bill McDermott told Bloombergs BusinessWeek

that the key attraction of the Concur acquisition was the extension of SAPs business network, which already includes Ariba and Fieldglass.

Companies have focused on streamlining operations within their four walls, but they havent necessarily focused on the transactions between companies. I believe the business network is the next frontier in computing, he said.

When quizzed on how SAP would generate returns for shareholders on the deal, McDermott said that while 84 per cent of Concurs revenues currently come from the US, only 30 per cent of the travel expenses in the world are made in the US leaving open a large untapped market.

Were going to get it by globalising Concur, he said. Currently, only 30 per cent of Concur customers run SAP,

so the deal will also bring a large new customer base to the vendor.

For its part, Concur expects to leverage SAP HANA to enable real-time network collaboration to create new business models and simplify complexity in the business travel value chain.

Concur CEO Steve Singh said, We have always been focused on making solutions for real customer problems, and with SAP we have a great opportunity to advance that mission. We are constantly seeking innovative ways to deliver the best customer experience and were excited about leveraging SAP technology, including HANA as we scale globally.

SAP will migrate all its corporate travel and expense

SAP to acquire Concur; extends maintenance for Suite 7 to 2025


management to Concurs integrated solutions, and together the companies say they will build network-based, context-aware mobile applications to better meet the needs of mobile business travellers.

SAP extends maintenance for Business Suite 7 to 2025; pledges continued investment in innovation SAP has made a commitment to customers with investments in SAP Business Suite 7 and SAP Business Suite powered by SAP HANA, extending mainstream maintenance for SAP Business Suite to 2025.

The company has also promised to continue to drive innovation in on-premise versions of the solution on this platform, including simplifi ed system landscape requirements, resulting in total cost of ownership reductions; simple user experiences based on mobile apps and the Fiori user experience model; advanced social media integration and analytics based on HANA Live and the SAP Smart Business cockpit; and business process improvements and enhancements across scenarios and applications for lines of business and industries.

The move is presumably aimed at settling the nerves of SAP

customers with signifi cant investments in on-premise systems, given the companys strong cloud messaging.

In addition to prolonging mainstream maintenance until the end of 2025 for Business Suite 7 core application releases, SAP will also fi x the price for SAP Enterprise Support for new purchases at a constant 22 per cent until 2025. Existing SAP Enterprise Support contracts will not have fees increased beyond 22 per cent until 2020. These conditions also apply to SAP Enterprise Support delivered to partners participating in the SAP PartnerEdge program.

The fast pace of change that comes along with the broader adoption of cloud technology raises the need of customers for predictability and simplifi cation, said Bernd Leukert, member of the Executive Board of SAP SE, Products and Innovation.

Companies globally rely on SAP Business Suite applications to run their business-critical processes while managing a fundamental shift to cloud. With our innovation commitment, we offer companies investment protection for their existing on-premise solutions and help them increase innovation and the potential to run simpler and to shift to the cloud at their own pace.

Data breaches cost the same, whether they happen in your production or non-production environments. Choose Data Secure to reduce security breaches in your non-production SAP systems. >>> [email protected] | Tel : +61 449 908 220 | www.epiuselabs.com

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NEWS IN FOCUSSAP

pg 8INSIDE THE C-SUITE: FINDINGS FROM THE IBM GLOBAL STUDY

pg 10BOOST FOR B1: SURGE OF INTEREST FROM SMES

Whats top of mind in enterprise technology

71 per cent of CEOs listed technology as the

number one focus that had their attention.

Todd Kirtley, IBM

HOT TOPICS


Inside the C-suiteWhat are the forces that will shape organisations over the next three to fi ve years? IBMs global C-suite study has the answers.

HOT TOPICS

Over the last 10 years, IBM has undertaken an extraordinary research exercise to get inside the minds of the C-suite, conducting 23,000 face-to-face interviews with executives.

Most recently the insights of 4183 CxOs including CEOs, CFOs, CMOs, CIOs and other assorted chiefs from more than 20 industries in more than 70 countries have been brought together in the IBM global C-suite study, produced by the IBM Institute for Business Value.

Together they give an insight into the landscape which will shape strategic thinking for the next three to fi ve years.

Change at the pace of revolutionOutlining the fi ndings of the study at the 2014 SAP Australian User Group Summit, Todd Kirtley, general manager, global alliances, IBM, says not only is the current pace of change unpredecented, the jobs of business and IT professionals are more demanding than ever.

There are three key reasons for this acceleration:

1. An emerging middle class of over fi ve billion people, with money to spend. Its a two-edged sword governments and institutions now need to provide services across fi ve billion more demanding users, requiring business models and IT systems that can accommodate that. But more importantly, in growth markets, you have opportunities from new customers. Is your company really doing the right job of stepping out and putting together new products and services to address this tremendous market potential?, Kirtley says.

2. Data is doubling every 18 months. With 15 billion mobile enabled devices and over one billion users in social networks, there is a huge amount of information being generated. You are thinking, are we really aligning our businesses to address the new emerging big data trends that are in the industry? Are we really positioned for this transformation around big data in the digital age? Kirtley says.

3. There has been a fundamental transformation in end user devices. This is changing the relationship between business and personal use, and making users much more demanding of their devices and systems. Overall, the question senior executives must answer is, are they making the transitions in their business that are necessary to compete going forward?

Technology paramount to transformationWhen it comes to the single most important external force shaping the future of their enterprises, CEOs overwhelming named technology. Other CxOs also saw it as one of the top three factors affecting their business, and this is up from the sixth most important external force in 2004.

71 per cent of CEOs listed that as the number one focus that had their attention. I would have never thought that the CEO could actually talk about transformation of IT and digital. Increasingly we are seeing convergence between the point of view of line of business executives, IT executives and now CEOs, Kirtley says.

While the line of business executives those in fi nance, marketing, HR and supply chain understand that they need more information on their customers, their products and services, and changing demographics, at the moment they are drowning in data.

They are having a hard time going from data to information to insight to the predictive world they need to serve in a marketplace, change their business models, and come up with new products and services, Kirtley says.

And who are they asking for help? The CIO. But the challenge for CIOs is that they are now trying to fulfi l three key roles in most organisations.

1. Day-to-day operation of IT. With 80 per cent of most IT budgets spent on legacy systems and maintenance, theres rarely enough money to be spent on new project development.

2. Partnering with line of business executives to transform the enterprise. They start looking at data analytics, social systems and the next generation of systems that are going to come for the base of legacy projects that they have today. That transformation requires lot of trade-offs between expense and capital and projects and people and activities, Kirtley says.

3. Looking into the future at how IT can pioneer change. In this role, they are looking at what might be next in order to adjust the business models to offer next-level products and services. So the CIOs are basically, in a word, stretched. They have more on their plate than they could get done.

Engaging in a more open ecosystemA key issue the research canvasses is how organisations will be engaging with their customers over the next three to fi ve years. Only 20 per cent thought that traditional face-to-face

LEADERSHIP


interaction would be the way forward, while 68 per cent now believe extensive use of social and digital interaction will be a defi ning factor in customer relationships over this period.

They are focusing much more on microsegmentation, and they are looking at customers as individuals. In order to make this happen, you have got to be much more open with your employees, your supply chain of ecosystem partners, and your customer, Kirtley says.

This openness also extends how innovation will be introduced and driven in the organisation. Seventy-three per cent of CxOs stated they would be looking for partners external from the organisation to drive new product and service capabilities, and 61 per cent expect to see more partnering to increase value.

[Most CxOs] envisage that organisational boundaries will become far more porous, enabling greater collaboration with employees and partners to accelerate innovation. They also anticipate sourcing more of that innovation from outside. Where once an enterprise could go it alone, and be successful doing so, it must now collaborate, the report says.

In fact, 90 per cent of CxOs plan to collaborate much more extensively with their customers within three to fi ve years.

The digital frontierThe report says the emergence of social, mobile and digital networks has played a big part in democratising the relationships between organisations and customers. With this backdrop, CMOs consider it critical to have a strong digital strategy in place and want to overhaul every aspect of the customer interface.

Fortunately, they seem to be on the same page as the CIOs on this front four-fi fths of CIOs surveyed say they aim to digitise their front offi ces within the next few years to sync with customers more effectively, and 84 per cent of CIOs include new, mobile means of interacting with customers in their top fi ve priorities for enhancing their organisations competitiveness in the next few years.

Repositioning ITAccording to the report, as CIOs reposition the IT function from service provider to critical strategic enabler, they anticipate spending much more time on activities that have traditionally fallen within the CMOs sphere, such as customer experience management and new business development.

Eighty-four per cent of CIOs expect to invest more in mobility solutions and business analytics, and again here CIOs are in sync with their CMO colleagues 94 per cent of whom believe analytics and mobile will play an important role in helping them realise their goals.

Cloud, internal collaboration/social networking and business process management were also cited as investment priorities by 64 per cent of CIOs, with 87 per cent of CMOs saying collaboration tools will be critical to achieve their objectives.

It is an everyone to everyone economy. We are now looking at not just individuals being the centre of the economy, but the world of social, Kirtley says. People trust their networks and the people they are connected to more than they trust individual corporates in many cases.

And while generating deep insights using analytics is a key priority for CIOs, they realise they need a scalable and extensible information foundation with which to manage big data and 55 per cent say this is lacking in their organisation.

Achieving more togetherWith the study also comparing the views held by those in outperforming or underperforming organisations, it is clear to be successful in this dynamic environment, the members of the C-suite must pull together, the report says.

A full 92 per cent of CEOs heading outperforming enterprises think they and their fellow CxOs work effectively together in a collegial manner. Only 72 per cent of those heading underperforming enterprises can make the same claim hard proof of the dividends a united boardroom can bring. To read more of the insights from the study, visit www-935.ibm.com/services/us/en/c-suite/csuitestudy2013/

With 15 billion mobile-enabled devices and more than one billion users in

social networks, there is a huge amount of information being generated.

Data is doubling every 18 months.

Only 20 per cent thought that traditional face-to-face interaction

would be the way forward, while 68 per cent now believe extensive use of

social and digital interaction will be a defining factor in customer

relationships over this period.

Engaging in a more open ecosystem

71 per cent of CEOs listed it as the number one focus that had their

attention.

Technology paramount to transformation

92 per cent of CEOs heading outperforming enterprises think they and their fellow CxOs work effectively together in a collegial manner. Only 72

per cent of those heading underperforming enterprises can

make the same claim.

Achieving more together

DATA

TECHNOLOGY

COLABORATION

ENGAGEMENT


Boost for B1Partners are reporting a surge of interest in SAP Business One, its solution targeted at small businesses. Freya Purnell found out why customers are jumping on board.

HOT TOPICS

SAPs Business One (SAP B1) solution has been on the market for more than a decade, but it seems improving business conditions, as well as investments in product development by SAP, have breathed new life into the product. There are now more than 45,000 customers of the solution globally, with a signifi cant number buying the product over the last three years.

In March 2012, SAP began offering the SAP Business One OnDemand solution to provide small businesses with a cloud-based ERP solution. At the time, the company said it was designed for customers seeking to implement their fi rst holistic ERP system.

More recently, customers also have been able to choose a version of SAP Business One powered by HANA, with version 9.0 on HANA released in March. The capabilities of HANA have enabled features in this version only possible with the use of in-memory technology, such as the rapid analysis of structured and unstructured information. The predictive analytics capabilities also enable SMEs to optimise business planning, operations, and decision-making, while gaining insights into new customer trends and behaviour.

But despite these rolling improvements, as well as the addition of other functionality such as mobile-enabled services through the SAP Business One app, it is only really this year that partners have seen a surge of interest in B1.

Sarah Poole, director, Enabling, says that while 2014 got off to a slow start, the second half of the year has delivered considerable activity.

I think we are currently seeing a number of people back in the buying cycle and out looking for ERP systems again. I think there is some great functionality around Business One, particularly around mobile, that is leading the way on a lot of the opportunity we are seeing come through at the moment, she says, adding that there is strong brand recognition in the small business space, ensuring B1 is defi nitely on the radar when new solutions are considered.

Tim Charman, business development manager at NZ SAP partner REALTECH, agrees, saying that while B1 has suffered from a lack of product awareness in New Zealand in the past, consistent marketing has helped turn

this around, creating a more robust sales pipeline. Charman reports consistently strong customer interest in B1 during 2014, except for a quiet period around the time of the NZ election.

He says that this interest level is also translating to decisions to move forward with a B1 implementation which isnt always the case.

Sometimes we get a lot of interest and no decisions, or quite often, the decision is to do nothing, because [the business] thinks in a particular climate its not worth it or too expensive, but now that doesnt seem to be the case, Charman says.

Part of this confi dence in investing in new solutions could be attributed to better economic conditions and a need to position for expansion, as the latest Five-Year MYOB Business Monitor report has shown that New Zealands small and medium businesses (SME) are experiencing their highest growth rate in more than fi ve years. In the latest survey, released in September, almost twice as many NZ businesses reported revenue growth (39 per cent) as did losses (19 per cent).

The picture isnt quite as good in Australia, with only 21 per cent of Australian SMEs reporting growth. The proportion reporting falling revenues, however, has declined from a high of 41 per cent in May 2012 to 31 per cent in September 2014.

UXC Oxygen, having evolved its business over the last 18 months, believes much of the interest in B1 stems from the choice to deploy on-premise or in the cloud.

Patrick Saundry, general manager, SAP Business One solutions, UXC Oxygen, says, Traditionally, we would have always positioned an on-premise sale. More recently we have developed a very strong focus around cloud, and

SME


I would suggest that our strength is that we can propose both on-premise and cloud solutions, which makes for the ultimate buyer experience. I think that its allowed us to take a unique competitive position against traditional ERP providers and emerging cloud partners.

For SMEs, the benefits of the cloud-based solution are that it can be connected to existing solutions, and requires a much smaller footprint internally.

Our customers are holding us even more accountable to the delivery and management of the solution moving forward in a managed cloud environment, Saundry says.

Interestingly, the cloud option isnt resonating as well with NZ customers, according to Charman.

Ive had three CFOs in a row that said they wouldnt entertain having a cloud-based system, preferring it on-site or at the most, hosted somewhere locally. Some of it is doubt about the security or control of their own data, he says.

Charman believes another factor is that the cost equation is still not a slam dunk for cloud.

If you are going to implement the system and keep it for just five years, then you are probably still better off to have an on-premise solution.

Also driving demand for B1 is that it is simply a better solution than it used to be, with SAPs investment in product development paying off, both Charman and Saundry believe.

SAPs product maturity is critical to the buying decision. The confidence in the consultant and customer delivering to the outcome is our highest priority, but most importantly the customer can tangibly see the improvement in the product and how much better it is than many of the other products in the market, Saundry says.

Source of demandThe strongest demand for B1 at present seems to be coming from the manufacturing and wholesale distribution sectors, and service-based organisations.

Generally new B1 customers either havent implemented a fully integrated ERP system before, or they have an ageing system.

Most of the business we have got this year comes from companies that are experiencing growth and they want to move up from something like MYOB, because it doesnt give them the auditability or the good platform for growth, Charman says.

Poole reports a shift in interest from only the core finance aspects of the solution, which was the main focus two years ago, to its integration with CRM.

The market really does seem interested in the extended capability of their core finance system and how they can get additional functionality for the rest of the business, so the sales team or the customer services team are also able to use the same platform to perform their role. Certainly across our customer base we are seeing that interest in

CRM as well, Poole says.For service-based organisations, Saundry says a common

theme is the need to integrate the solution to a much larger labour force or connected network.

For example, the desire for mobility, the desire for work portals, the desire for automation, the desire for business process outside of ERP have become increasingly important to them.

Are you ready for B1? Investing in SAP B1 is not a trivial matter with licensing and implementation costs and time to have it configured properly. And while there might be a few rules of thumb about how big businesses need to be to really get the value from the system, the maturity of the organisation in other ways may be more important.

I think the key for us is the customer must understand the value of IT and business systems in their business strategy and their growth. So they really have to understand that investing in systems like SAP Business One actually is going to add a huge amount of value and enable them to take that next step, because if it is only seen as a pure cost centre and that every single dollar that goes into implementing a system is taking away from something else they could purchase in the business, thats a challenge, Poole says.

Saundry agrees.You cant be too small that its going to swallow you up

and consume all your time. If you have got your business to a point where you have an established market, you have an established process and that end-to-end ERP process will add significant return on investment to your bottom line, then you are on a winner, he says.

Common benefitsFor those organisations that do make the leap, across sectors there are some common benefits such as strong audit trails, solid reporting, and having a single data entry point, which improves accuracy of information.

Other benefits can be increased productivity through better process design, and reduced costs through more efficient purchasing.

Of course, the core benefit of integrated systems providing a holistic view of all aspects and divisions of a business is certainly one that that B1 provides, according to Poole.

Its that central version of the truth where the sales team member is looking at the exact same information as the financial controller, or the warehouse manager, or the MD who is travelling around. Suddenly all parts of the organisation are able to be connected in one place, and that certainly makes for far better and faster decision-making.

And as small businesses continue to try to do more to stay competitive, the ability to deliver these benefits bodes well for B1 into the future.

CASE STUDIESpg 14HYDRO TASMANIA: FUTURE THINKING

pg 18SYMPATEX: SAVINGS ON SAP VENDOR FEES

pg 20SPOTLIGHT: OPENING A NEW WEB CHANNEL

pg 22COLONIAL FIRST STATE: PARTING OF THE WAYS

pg 24ENERGEX/ERGON ENERGY: POWERING CHANGE

pg 27TENOVA: ENGINEERING A GLOBAL TALENT COMPANY

pg 29LINFOX: LINFOX TAKES CONTROL OF RECONCILIATIONS

Innovative projects from across the region

There was a constant tension between delivery of the technical aspects of the

project, getting it done on time and budget, and focusing

resources and priorities on the organisational change aspects.Paul Molnar, Hydro Tasmania


In 2014, Hydro Tasmania celebrated 100 years of leading renewable energy development in Australia. Its fi rst hydropower development began operation in Tasmania in 1914, and Hydro is now Australias largest producer of renewable energy, using a combination of water and wind power to harness natural energy that is then sold on the national grid.

Owned by the Government of Tasmania, Hydro Tasmania employs 1100 people and has assets worth around $5 billion. The company also owns Momentum Energy, an electricity retailer, and operates international consulting business Entura, which offers expert power engineering, renewable energy, water and environmental solutions locally, nationally and internationally.

BackgroundBack in 2011, Hydro Tasmanias system landscape was underpinned by a best of breed approach, with point solutions across many different business areas and processes. This created signifi cant challenges around integration, with connectors having to be custom built and maintained, if it was possible to integrate at all.

Glenn Wickham, corporate delivery manager, Hydro Tasmania, says the state of the organisations fi nance system prompted a review of its future technology strategy.

We hadnt upgraded it for a long time, and it had got to the point where we were running out of support, and it was going to cost us a lot of money to upgrade, so that got the ball rolling, Wickham says.

At the time, Hydros CEO came from an SAP background, and encouraged the business to examine whether choosing an ERP would be more benefi cial than the best of breed approach.

Having undertaken the appropriate analysis and due diligence, Hydro did opt for an ERP, and commenced tender selection processes, fi rst choosing SAP as the solution vendor, and then going through a second process to select an integration partner, which could also support the system on an ongoing basis.

At that stage, the strategy was that we would only have business knowledge and process support retained within the business, whereas technical knowledge would all be done via the partner, Wickham says.

UXC Oxygen was selected to run the implementation, and SAP was engaged as QA partner. The two companies worked closely together through the design of the solution.

ImplementationThe project, known internally as CASPaR (Core Applications Systems/Processes and Redevelopment), was broad in its reach it would affect all aspects of the Hydro Tasmania, Momentum and Entura businesses.

From a functional perspective, the SAP footprint would cover the following areas: Financial Management, Business Planning and Consolidation, Human Resource Management, Payroll, Environmental, Health and Safety,

Future thinkingAs Hydro Tasmania approached its centenary, the company took on a major project to set its technology foundations for the future. Freya Purnell reports.

CASE STUDYHYDRO TASMANIA


Governance, Risk and Compliance, Portfolio Management, Project Management, Asset Operations and Maintenance, Procurement and Supply Chain, and Customer Care and Billing.Given the implementation touched all parts of the

business, undertaking the appropriate organisational change management as a central component of the project was critical.

The project was really a true case of software-based transformation. The technology was important, and also the outcomes from a change perspective were very important as well, says Stuart Dickinson, CEO, UXC Oxygen.

Kicking off in 2012, the project had a very aggressive timeline of 18 months initially, though this stretched closer to two years over the course of the project.

One of the reasons for the tight timeline was that at the outset, Hydro Tasmanias business strategy was to position for quite signifi cant growth.

The implementation was planned in two main stages, with some components delivered separately due to business priority changes during the project.

The fi rst release was the core ERP, including fi nance, supply chain, GRC and asset operations and maintenance, with HR/payroll and project/portfolio management comprising the second.

We went through a very clear design phase right upfront to get everybody on the same page around the overall solution, and then validated their part of building and deploying a solution each time, Dickinson says.

The project enjoyed very good engagement from the business, with clear direction and high-level support from then-CEO Roy Adair and his leadership team.

It meant that when the project needed resources, we got the resources, Wickham says.

Dickinson agrees that the level of engagement was a positive.They had very good executive sponsorship and leadership

on the project, and the project sponsor, Andrew Catchpole [strategy and market development director, Hydro Tasmania], was very focused on making sure that the business was successful through the process, Dickinson says.

There was a very large project team, both from a technical and a business perspective, and the way this was structured also paved the way for life after CASPaR.

Paul Molnar, manager, business process assets and infrastructure, Hydro Tasmania, says, That was a signifi cant success story for us the commitment and resources by the business to key roles, such as super users and subject matter experts, and business process ownership across the various process streams that really existed throughout the whole implementation, and even beyond, to work on embedding the business benefi ts. So we really set it up for the post-project environment in the delivery.

Dickinson says from an implementation perspective, one of the most unique aspects of the project was its location in Hobart.

We have all heard stories of projects based in locations where you have to bring the team in to deliver the project, so we were very conscious of that through the process, Dickinson says.

Due to the length of the program, at 2-1/2 years, a number of UXC Oxygen team members were relocated to Hobart for the duration. While some of those working on the project moved on to other things as various phases were completed, program director David Hillman was a consistent presence throughout the life of the program.

I sat on the steering committee for the whole project as well, making sure that we had strong indicative leadership across the program, Dickinson says.

Initially, the project team was split over several fl oors of one building, but after they found that this caused some communication issues, the team was consolidated into one wing of a building, and this proved to be far more effective at keeping the team on the same page.

Jon Chadwick, managing partner of Litmus Group, which provided change management services on the project (as well as PMO, benefi ts realisation and process design), says the project also benefi ted from clear visibility of the benefi ts that would make the project a success, and close collaboration between the three key parties Hydro, UXC Oxygen and Litmus.


We went to dinner once a fortnight as a group to talk about issues. We didnt fi ght it out in steering committee, if there was an issue that I saw coming up with UXC Oxygen work, I would call David or Stuart and we would fi x it, and vice versa. There was that transparency across the whole program everybody knew all the benefi ts, and had the measures for business readiness top of mind, Chadwick says.

The fi rst phase of the project was delivered on time and on budget on 1 July 2013, while phase two went live early in 2014.

One of the projects greatest challenges was delivering phase two of the project at the same time as phase one was transitioning into business as usual (BAU) mode, and dealing with the inevitable bugs and issues that arise in this process.

Having done the main drop in release one, then we had to cope with BAU operations and obviously all the transition activities, the learning and coming up to speed, and supporting a new system and a whole new set of business processes, and at the same time, kick off the next release of the project, Wickham says.

Making sure you keep the business engagement, trying to keep everyone happy and supporting the business as much as you can, and at the same time adding on the next release of the project, was diffi cult. Probably the biggest learning in retrospect would have been we should probably have had a couple of months break to let it bed in, but because of our aggressive timeline, we just didnt have that option.

Molnar agrees.There was a constant tension between delivery of the

technical aspects of the project, getting it done on time and budget, and focusing resources and priorities on the organisational change aspects. There was always a tendency to prioritise the time and budget aspects. Obviously thats important, but when push comes to shove, it was always a bit of a balancing act trying not to lose sight of the organisational change.

Mobility for asset managementAs part of the project, Hydro implemented the SAP Work Manager solution for its fi eld service staff. Though included in the original implementation methodology, the mobility implementation was eventually separated from the main project and deployed using a slightly different approach.

To enable the evolution of the work involving end users, we removed the constraints of the fi xed price contract and treated it as more of an iterative development, Molnar says.

Keeping a tight leash on the scope of the mobility aspect, and not letting the whole business get carried away with the possibilities of mobile, was also important, he adds.

It excluded functionality that was being seen as useful for managers or offi ce-bound people, but that wasnt the intent of it it was focused on our fi eld-based maintenance people and their utilisation. To that extent, being strict about keeping to the scope and focus was valuable in the end. But it did need a lot of stakeholder management around expectations.

Dickinson says part of the success of the mobility solution

came from creating a proof of concept fi rst, before it went into production, which allowed them to ascertain where the real business value was.

This project was all about business value and change, and so looking across each of the areas to be clear around where business value is going to come from. In terms of asset maintenance, getting them mobile is a key part of that process, Dickinson says.

The Work Manager implementation was also one of the surprise hits with Hydro staff, generating buy-in from the fi eld staff and demonstrating just what technology could do for the business. This was especially welcome considering the team initially felt it was a risky deployment.

I heard a couple of anecdotal stories around people being hesitant about the technology and saying, Whats the use of this?, and then coming back a few weeks later, saying, This is fantastic, Wickham says. It was almost like putting a toe in the water, proving the concept, getting people on board, and then post-project, we can then start looking at how else we can leverage that engagement we have with the employees to continually improve and provide more.

An unexpected benefi t is how its helped with the organisational change management of the user acceptance and take-up, simply from having a different, simple user interface thats working quite well, Molnar says. People have taken to that where they havent necessarily taken to the SAP interface. So thats an aspect that we are trying to leverage more and more in different processes.

Planning for changeWith such a broad remit, almost everyone in the Hydro business was affected during the project delivery phase. This necessitated a well-managed and responsive change management process, which Hydro and Litmus Group planned from the ground up.

Chadwick says because there hadnt been much system change in the Hydro business for a long time, not only were the systems antiquated, but their processes were also in clear need of an update. The speed of change was also a new element for Hydro.

Even though it wasnt very fast in most of our terms, it was [important to] manage the speed and the complexity of that implementation with the business. That all culminated into the transition to business as usual, getting the business ready, and measuring that readiness to make sure they were ready to take the stuff on, Chadwick says.

Organisational change management was established as a dedicated stream within the project organisational structure, alongside the process and technical streams, and was resourced and managed accordingly.

It was supported and managed in a range of ways, with various business resources like organised business process owners, super users and subject matter experts that were integrated into the project team, so there was a lot of knowledge and expertise getting built up ready to take back into the normal business environment, Molnar says.

CASE STUDYHYDRO TASMANIA


One of the forums which enabled that work was the business process ownership forum, which started in the early days of the project with the involvement of the project director, project managers, and key project personnel.

It evolved to be a very integrated part of running the project a lot of transparency across the business about what was going on and the decisions being made by the project team. All of the project deliverables and blueprint design documents were reviewed and approved by business process owners, generating acceptance along the way. I think those things helped with knowledge and buy-in, and having a whole range of stakeholders being prepared to take the change back into the business, Molnar says.

The change methods employed had to ensure the diverse Hydro workforce, some of who were in different, remote locations, all received the information they needed about the new system.

Chadwick says one of the methods they found extremely effective was the one team approach. Capability development was also a key part of the projects mission.

From the outset, we agreed with the CEO and the executive sponsors of the program that we would leave capability within Hydro Tasmania as a legacy of the project so not just the SAP system itself and changes in the process, but also the capability to be able to do things like this again, Chadwick says, adding that their task wasnt just to send a large group of change managers through the company.

It was us supplementing and choosing resources from within the company and training them up, and really getting that buy-in from the grassroots to be able to do that.

For example, instead of holding big events as part of a roadshow, change managers briefed managers on messages to deliver at regular team meetings, and were present to provide support.

Litmus defi ned its measure of success in capability development as only having a small number of people still working on the project when it went live.

We had one person left on the project when it went live. So they didnt have us there as an insurance policy, they did it themselves, Chadwick says.

An important differentiator on this project, which ultimately contributed to its success, according to Chadwick, was that as a client, Hydro was very open and ready to take advice on board.

That was really refreshing for us. There was no pushback, these guys were really hungry to take on the change, hungry to learn new things, and hungry to make thi s a success. Business benefi tsOne of the challenges of the renewable energy sector is that it is subject to the morphing government policy landscape. With a change in government and major energy reforms in Tasmania in the past 18 months, this has certainly affected Hydro Tasmania.

While the initial business case and benefi ts expected at the outset of the project were targeted around the anticipated growth of the business, Hydros business strategy changed.

Although the company is not currently in the growth phase envisaged at the time of the initial business case, it is reaping the benefi ts of increased effi ciency, particularly in terms of a reduction in duplication of processes, and consistency of process.

We had a lot of disparate applications and processes around the business, and we also had a lot of our key processes that really werent supported by systems at all. Thats been quite a dramatic change for the business for example, in our major works, maintenance and capital works division, we do a lot of project management-related processes, and we had no single project management system or process. Now we have a centralised common process across the business thats eliminated a lot of waste and brought consistency to how we are doing things across the business, Molnar says.

From the UXC perspective, though the program has fi nished, it is only the beginning for Hydro, Dickinson says.

The big achievement was getting Hydro onto a single platform where they could see and manage the entire business. Implementing SAP is a journey so it gives them a very solid foundation now to be able to continue to move the business and really start to leverage the platform.

Photos courtesy of Hydro Tasmania.


A research report by Rimini Street, published in September 2014, called Assessing the Business Case for Independent SAP Software Report, helps customers understand the overall business case for moving to independent support by providing supporting evidence of 27 in-depth client return on investment (ROI) studies that show the total maintenance savings by switching from vendor support to Rimini Street and the impact and value to their organisations as a whole.

Nucleus Research verifi ed the methodology, data, results, and interpretation of the study for accuracy and credibility, and found that the client data and estimates were reasonable and representative of the savings Rimini Street customers can make.

Rebecca Wettemann, vice president of Nucleus Research, said there is a compelling business case for switching from SAP software support to independent support.

Customers seeking to do more with fewer resources are looking at their overall IT operations budget to identify underperforming investments. Theyre fi nding that moving to independent support frees up vendor tax dollars to invest in technology that drives growth and greater innovation, enabling them to deliver what the business needs now, Wetteman says. In short, we believe many organisations will have little diffi culty formulating a solid, persuasive business case for switching from vendor support to independent support of their enterprise software, as validated by the fi ndings of this study.

While SAP customers switching to independent support with Rimini Street save 50 per cent on annual maintenance fees, there are also savings on upgrades, customisation support, and maintenance effi ciencies.

Nucleus also found that some clients, depending on the extent of their customisations and upgrade philosophy, saved as much as three times their annual vendor maintenance fees, the report says. On the low end, other clients reported saving approximately the equivalent of their annual vendor maintenance fees.

Case study: Sympatex Holding secures responsive support Saved more than 50 per cent on annual support fees compared to vendor support

Decreased IT budget without losing effectiveness of support issue resolutions

Received comprehensive tax updates in response to complex changes to German regulations governing travel expensesAs one of Europes leading providers of innovative,

environmentally friendly textile processing technology, Sympatex Holding GmbH delivers textile expertise, advanced manufacturing techniques and stylistic inspiration to nearly 98 per cent of all classic menswear suppliers. The company relies heavily on its existing SAP ECC 6.0 release for fi nancial accounting, planning, logistics material management, sales,

distribution and other business processes.Sympatex chief information offi cer, Hasso Ercelebi, has no

complaints about SAP ECC 6.0. Our SAP system runs well. It is well-engineered and we are

happy with what we have, Ercelebi says. However, ongoing support costs associated with SAP had

Ercelebi looking for support alternatives by 2009.Our biggest expense in IT aside from personnel costs

was SAP support. The textile industry in Germany is a very competitive business, and we always have to look at our costs, to see whether what were paying makes sense or not.

Noting that Sympatex had purchased more SAP licenses than it was actually using, Ercelebi tried negotiating with SAP.

Our fi rst thought was to give up some of our licenses, because we didnt need them anymore, he says. This was not an option with SAP. Because there was no fl exibility, we simply had to pay the full amount for support.

The companys biggest expense in IT after personnel costs had been SAP support. Since making the change, its savings have been greater than 50 per cent with additional savings from Rimini Streets support for customisations, avoidance of forced upgrades, and streamlining of support processes.

Whats equally signifi cant is the fact that I was able to decrease the IT budget while receiving better service and issue resolution, Ercelebi says. We have not lost any effectiveness in terms of resolution of issues.

As part of its support services with Rimini Street, the company is also receiving comprehensive tax, legal and regulatory updates.

In late 2013, the German government published new tax legislation to take effect in 2014 that signifi cantly affected all companies running SAPs Travel Management module. It involved changes to the ERP system and new business processes that each company had to implement. Although the net effect of the legislation was to radically simplify and unify existing tax laws around travel costs, it was a very signifi cant and complex change to an area that hadnt been changed for years.

Sympatexs Primary Support Engineer (PSE) coordinated an intensive effort to resolve an urgent time-sensitive issue for the textile manufacturer.

Rimini Street responded by delivering code changes and SAP table updates, as well as documentation detailing the adjustments needed to its internal processes for tracking overnight stays, commuting allowances, additional meals and expenses abroad.

I was very impressed with Rimini Streets thoroughness in dealing with the regulatory changes, Ercelebi says. I appreciated that Rimini Street went into such depth, and were willing to openly dialogue with us about how to correctly interpret some of the legislations vague language.

This case study is sponsored by Rimini Street.

Rimini Street customers save multiples of SAP vendor fees

CASE STUDYSYMPATEX


Spotlight Pty Ltd is the largest chain of fabric, craft, and home interiors stores in Australia. The company employs more than 6700 staff, operates in Australia, New Zealand, Malaysia, and Singapore and is headquartered in South Melbourne. The brand is synonymous with expertise in crafting, fabrics and home decorating.

Spotlight is a privately owned Australian family business. It started with two brothers helping their mother run a dress fabric stall at Queen Victoria market during the 1970s and has grown to more than 120 stores across Australia, New Zealand, and Asia. Up until early 2014, Spotlight had a website but no online store. Another division of the Spotlight Retail Group, Anaconda, was already operating successfully online.

When Spotlight celebrated its 40th anniversary in Australia in 2013, it went to market to fi nd a strategic online partner that could power e-commerce growth and keep pace with customer demand across its various multi-site/multi-brand platforms.

Project driversSpotlight CIO Adrian Ward-Smith says the decision to invest in an e-commerce presence was motivated by a number of factors.

The online channel for the Spotlight Retail group establishes another touchpoint for our customers to interact with us. It provides a mechanism to both grow our business and to improve customer intimacy, Ward-Smith says.

However, when the company went out to market to evaluate not only the best e-commerce platforms for its immediate needs, but also one that would accommodate the groups

future growth plans across multiple sites and multiple brands, there were a number of key considerations.

Our product range is very broad and we have a high level of promotional activity. The platform needed to be robust enough to handle our large SKU count, our operation in multiple countries, and ultimately service both the Spotlight and Anaconda brands, Ward-Smith says. From the outset, we identifi ed the need to have a Product Information Management (PIM) system to support our e-commerce business and found the inbuilt PCM within hybris as a key differentiator.

Peter Aarons, IT project manager, Spotlight, says the company undertook a formal closed tender process that evaluated a number of different providers.

A cross-function panel drawn from our Spotlight and Anaconda businesses scored all providers against categories such as fi t with business requirements, vendor integration, partner stability and support, technical approach and fi nancial impact. hybris emerged as the clear leader, Aarons says.

We selected hybris based on the broad strength of its functional offering, together with our high confi dence in its long-term viability in the market. A key feature that differentiated hybris was its unique PIM that could be integrated with our existing SAP product and pricing model, he says.

Spotlight was already operating on the SAP platform so hybris being subsequently acquired by SAP was seen as a positive move.

Implementationcontiigo, one of hybris trusted implementation partners, was awarded the contract for the implementation and launched phase one of the project for Spotlight in August 2013.

Our immediate focus was to build a platform that gave our customers the ability to shop 24 hours a day, seven days a week. Core to our customer value proposition is our breadth of range, so we needed to replicate that online and chose to roll out department by department, Ward-Smith says.

Phase one included getting the base e-commerce capability

Spotlight opens up new web channel

CASE STUDY

Fabric, craft and home decorating retailer Spotlight chose hybris, implemented by contiigo, to take its extensive product range online via an e-commerce channel and open up a new touchpoint for customers.

SPOTLIGHT


online including fulfilment processes from hub stores and launching a home delivery service with a flat rate of $8.99 per order for Australian customers.

The hybris platform needed to integrate with SAP ECC for product data and SAP CRM for customer information. Spotlight has a significant VIP program, so it was important for the retailer to offer the same customer benefits online, and to provide a consistent experience across channels.

From a product perspective, knowing availability of stock is key. We are currently enhancing our inventory integration to provide a near time view of stock on hand, which is essential for displaying availability by store and for future click and collect options. Fortunately our back-end SAP systems were already receiving trickle feeds of transactions from our stores, making the integration relatively simple, says Ward-Smith.

In phase one, the initial range was limited to the manchester, home dcor, and party departments. Store picking and packing was facilitated through the development of an interface with a paperless picking system. When a customer places an online order, the system automatically detects which picking location has the capacity to fill the entire order and routes it directly for picking and packing. If no store has the complete customer order in stock, then the software will automatically split the order across two stores for dispatch directly to the customer.

The second phase of the project was launched in early September 2014, offering customers a number of additional functions, including the ability to buy products by the metre such as Spotlights popular fabrics and ribbons as well as bulky items that incur a higher shipping cost. The sale of gift cards was also added online and promotional catalogues integrated with the shopping cart.

The final stage of the current release was launched in late September, to cater for New Zealand customers.

Upskilling the internal teamThe implementation effort was supported by a multi-disciplined internal project team made up of both business and IT resources.

The core team is relatively small, and we flex resources for content development and during testing phases. Throughout the project there has been a focus on building capability this is in order to facilitate a seamless handover to support once the core project components have been delivered, Ward-Smith says.

The back-end components of hybris, known as cockpits, are being used by about 15 Spotlight business users to maintain product data, imagery and other aspects of website content. As the introduction of e-commerce touches most parts of the Spotlight organisation and affects many processes, the company had a dedicated change manager focused on communicating across the business and involving stakeholders in the transformation.

Key to this is encouraging the organisation to think of e-commerce as just part of what we have always done, rather than a separate silo. It is still retail and we are simply

interacting with our customers using a complementary medium, Ward-Smith says.

Business benefitsIn less than four months on the hybris platform, Spotlight is already fulfilling a significant number of online orders each day and by the end of this year will have close to 60,000 products available online.

The whole online approach has been a major business transformation for us. The Spotlight business has never had an e-commerce site before so its been an exciting learning curve. The hybris platform has been easy to use for our staff and smooth to operate on, says Aarons.

The online presence not only provides convenience and familiarity with the product range for customers, it also enables Spotlight to extend its reach into remote locations that are not easily serviced through the store network, according to Ward-Smith.

At Spotlight we have always had a high level of engagement with our customer. The introduction of the hybris platform simply provides another mechanism for us to engage with our customers and for them to engage with us, he says. One of the key benefits of having the online channel is that we can use our CRM data to create a more personalised experience for our customers being more targeted with things like our promotional offers increases satisfaction and helps build customer intimacy.

As we progress, our online channel will become more and more integrated with our physical store network. From a longer term perspective, we wanted to make sure our platform would scale and continue to be developed in line with the e-commerce customers changing expectations, which are moving at lightning speed, Ward-Smith says.

Future developmentsSpotlight is currently developing a mobile site for release in the coming months, leveraging the mobile templates that came with the hybris accelerator wherever possible to minimise development effort.

Development of click and collect capability and the replatforming of Anacondas e-commerce site to hybris is also underway.

Further ahead, Spotlight is also looking at improvements to the in-store experience for customers through the introduction of iPads in store for sales teams and setting up an online portal so customers can enter their own measurements to obtain quotations and place orders for custom-made curtains and blinds.

Our short-term goal is for the online store to generate revenue in excess of one of our largest stores and we are well on track to achieving this, says Aarons. Overall, we aim to improve the Spotlight experience through better customer engagement and increase the number of VIP customer cardholders that interact with us electronically.

This case study is sponsored by contiigo.


CASE STUDYCOLONIAL FIRST STATE

Parting of the waysWhen Colonial First State decided to divest the management rights to several property businesses, the question of how to split its SAP system was anything but straightforward . Freya Purnell reports.

Colonial First State (CFS), the wealth management arm of the Commonwealth Bank of Australia (CBA), includes a property group which sits within its Global Asset Management business unit. The group owned the management rights to several property businesses, but CBA determined that owning these management rights did not form part of its core business, and made a decision to divest. The property businesses themselves the Kiwi Income Property Trust in New Zealand and the CFS Retail Property Trust Group were given the opportunity to buy the management rights back from CBA.

Chris OBrien, head of SAP application management services, Harms Consulting, says where the technical complication arose was that all the businesses shared a single SAP environment, and this needed to be converted into three. This necessitated the deployment of new infrastructure to accommodate two new SAP environments, completely separated from CBAs infrastructure.

There were limited timeframes, commercial complications around which data could go to which environment, and obviously commercial sensitivities, because there was data held within the CBA environment that these external entities had never been able to view, OBrien says.

Another challenge was that the two entities purchasing the management rights were virtually starting from scratch.

They had all the people and the processes, but they had no underlying infrastructure, and they were rolling off what realistically is quite extensive infrastructure within the bank, OBrien says. Large organisations like

that obviously have outsource deals which are affordable overall, but can be expensive when you look at one single environment. That put those businesses in a situation where the cost of running those systems would be too signifi cant for them to consider as a long-term solution. The solutionHarms Consulting had an existing relationship with all the parties involved in the project, and this helped to speed up the engagement and the solution design, particularly given the tight deadlines around separation of the systems.

There was a need to start on the design and the discussion around the complications well before any kind of commercial announcement could be released to the market. Having that long-term history meant we were, on the back of non-disclosure agreements and the usual commercial arrangements, able to sit down and talk through designs, and give them some comfort that the project they wished to undertake could be done within the timeframes they were targeting, OBrien says.

The brief was to design a solution that provided Kiwi Income Property Trust and CFS Retail Property Trust Group fl exibility, security, and stability in their new SAP environments, but to do so in a way that was affordable and timely.

Both businesses run SAP Real Estate Management in the case of the CFS group, this is for their trust accounting, while the Kiwi group manages all of its shopping centres end-to-end within this application.

The Amazon Web Services (AWS) partnership and move


into Sydney data centres also proved timely for this project.

It presented a great opportunity to leverage some of the hourly compute

charges from them, so that we could shut down DEV and QAS environments after hours, put all

of those systems on an auto start-up and shutdown function, really

strip back their costs, and take a security fi rst and cost

reduction second approach to a new

infrastructure solution for them, OBrien says.

Working with AWSThe Harms team had already

investigated the AWS platform and done some testing, and the

reasons they chose to build the new infrastructures in this environment were

that they had confi dence in its stability, and there was also signifi cant documentation

available from AWS and SAP.What that meant was we knew that the solution

we were providing was 100 per cent supported by SAP. There is always a risk when you co-locate or

you go into a cloud, that if something goes wrong and you need to bring SAP on board, they could say it is something they dont support, OBrien says. That wasnt the case with AWS.

ImplementationThe business case and proof of concept for the delivery of compute and storage on AWS were fi nalised at the beginning of 2014. As security controls were recognised as an essential component for the success of the project, external security experts were engaged to workshop the key design elements.

Individual Virtual Private Clouds (VPCs) were built to host SAP and additional software requirements. Standard SAP programs were used to archive and delete information not required in the database, followed by robust testing, involving both technical and business resources.

Once the successful data deletion steps for each database were signed off in early May, an AWS Direct Connection was used to move cleansed, encrypted, and compressed database fi les to AWS and the respective VPCs. A disaster recovery (DR) test of SAP ERP production was also completed in May.

Testing was successful, and the project go-live was delivered several hours ahead of schedule.

While the deadline helped keep everybody committed, it was a good example of people working across businesses and across their own personal interest to ensure all parties

succeeded. That included all the various entities, as well as AWS and SAP, OBrien says.

Project outcomesMost importantly, Kiwi Income Property Trust and CFS Retail Property Trust Group were very satisfi ed with the move to their new SAP environments.

Jill Davidson, fi nance manager, Kiwi Income Property Trust, said, The transition to the Amazon Web Services platform was absolutely seamless. I credit the ease of the change-over primarily to Harms Consulting managing the switch over in such a timely and professional manner.

Denildo Albuquerque, head of IT, CFS Retail Property Trust Group, said, The whole process ran very smoothly with any minor issues encountered promptly resolved. The user feedback has been very positive, with a system performance as good or better than the internally hosted platform.

Because all the SAP and AWS recommendations were fulfi lled, each environment was fully supported by SAP Enterprise Support.

Success factorsThe project utilised the fl exibility of cloud to temporarily increase compute power to process large quantities of data in shorter time periods, increase IOPS to speed uptimes to read and write to databases, and to shut down instances when not required, saving cost.

The implementation was also simplifi ed by avoiding over-complication of the design, basing it on business requirements for data recovery time and recovery point.

According to OBrien, having support from both SAP and AWS was also critical for the success of this project. As an SAP Value Added Reseller and an AWS Consulting partner, Harms was able to provide this.

I have had clients that have chosen to go with a data centre provider to do their migration of their SAP systems, and they have had ongoing problems because they didnt understand SAP. I have seen SAP consultants move stuff into the cloud, and they had diffi culty because they havent understood the cloud well enough, OBrien says.

Because we had already invested in a relationship with Amazon, they provided us with architects to ratify all of our designs. One of the things that was advantageous in that design is we were able to do a proof of concept of everything we were intending to do in a few weeks and under $10,000. It really took a lot of risk out of the decision.

They had all the people and the processes, but they had no underlying

infrastructure, and they were rolling off what realistically is quite extensive

infrastructure within the bank.Chris OBrien, Harms Consulting


CASE STUDYENERGEX/ERGON ENERGY

Powering change

Queensland energy providers Energex and Ergon Energy have been on a journey to transform their business intelligence capabilities. Peter Effeney, CEO of SPARQ Solutions, shared insights from this journey at the SAUG Summit 2014.

Energex manages sophisticated energy distribution networks and delivers world-class energy products, services and expertise to one of Australias fastest growing communities, South East Queensland. Ergon Energy is an electricity retailer serving homes and businesses in regional Queensland, and also maintains and expands the regional Queensland electricity network. Both companies have around $10 billion in assets and more than $2 billion in annual revenue.

SPARQ Solutions was formed as a separate company in 2004, as a merger of the ICT functions of Energex and Ergon, and provides services and holds the licences and assets for both companies.

We provide the full stack of services as an IT operation would, from strategy, architecture, and CIO-type services through to project delivery services. We typically do in the order of $80 million to $100 million worth of IT capital expenditure per year for the two companies ICT operations, Effeney said.

Challenges facing the energy sectorThe energy industry is becoming much more information intensive and enabled, according to Effeney.

The old mode of just run the power station through the high voltage transmission grid and down to the customer without any intervention is one very much in the past, he said.

Indeed, even the dynamics of supply and demand have shifted, with customers moving to generate their own electricity. Queensland is not called the Sunshine State for nothing and almost one in 10 houses now has solar panels on its roof. This is transforming the grid from a single directional fl ow from large power stations, to small customers having an interconnected and bi-directional fl ow of energy.

The Queensland Governments 30-year power strategy also picks up on the themes of information enablement and open data, and Energex and Ergon carry these through into their individual plans.

In SPARQ, we try to bring together the delivery of the capability for both of those companies, and look for synergy opportunities wherever we can. So we have a plan around

information enabling the two business, and thats leading to quite substantial programs of IT investment in both companies, Effeney said.

Ergon CEO and SPARQ chairman Ian McLeod, who is the project sponsor for Ergons major program of work, also speaks of the critical nature of information enablement for the future of the company in terms of how customers use energy and environmental factors affecting their assets.

An additional complicating factor is that at Ergon Energy, the retail operation is currently being separated from the distribution component of the business, which is also requiring a major reinvestment in customer systems, as well as similar projects including fi eld force automation using mobile devices, and distribution monitoring and analytics.

The enterprise BI journeyBoth Energex and Ergon have undertaken major ICT programs in the last decade, and overlaid on top of this has been the enter-prise business intelligence (BI) components.

Back in 2006-07, the fi rst BI platform was established as part of an implementation of the Mincom Ellipse ERP across Energex and Ergon.

With that, we introduced BusinessObjects 6.5, and that became the fi rst reporting platform largely on that ERP, Effeney said.

Ergon went on to establish its fi rst data warehouse using SAP BusinessObjects XI in 2008, and by 2009, Ergon was building various business unit-specifi c data marts, including one for network analytics, and one for customer service.

In 2010, Energex mounted a business case to make a substantial investment over three years in what was called the Energex Performance Management (EPM) system.

This was very much led by a strong vision and leadership from their CFO, said Effeney.

The foundation for this system was built in 2010, with the EPM program running for three years from 2011-2013, bringing a full stack of SAP solutions into play.

The full EPM program did cover pretty much the full


spectrum, so that we could produce a whole of company corporate scorecard through fi nance, HR, customer safety works, network, but it also included the data domains, the change management of the information management governance and disciplines, as well a whole lot of work to get KPIs aligned across the business. Then the visualisation built on top of that to make it friendly for users, Effeney said.

Meanwhile, the BI foundation was implemented at Ergon in 2011, which brought SAP Enterprise Information Management, Data Services, and Information Steward products into the tool set. During 2012 and 2013, a number of discrete projects were run in BI hotspots for example, around network reliability, capital works program or fi nancial HR data. In 2014, the SAP HANA product was implemented for data discovery for Ergon.

It is early days on that, but we have been able to take our end-of-month big data sets and be able to see outcomes very quickly. It may be not just about the speed, its about what that will enable in terms of the information outcomes that we will be able to produce now that just werent simply able to be produced before, Effeney said.

At Energex, the success of the EPM solution, which was aimed at the general management of the solution, prompted the engineering division to request a solution as well. The result was the Distribution Monitoring Analytics (DMA) project, which commenced in 2014 and will run until 2016.

Drilling down on EPMAs a successful project, the Energex Performance Management System has provided the business with access to a single source

of the truth via a user-friendly portal. The EPM System has 100 management users, 100

performance reports, and draws on 80 million fi nancial records. The portal incorporates a number of power boards, as well as

learning modules, defi nitions and a business glossary.So we are going to end up using the same term for different

things across the business all accessible from this one portal. Its been a great transformation for the business, and we call that our tool shed, Effeney said.

From this portal, a high-level report for both the executive management team and Board can be generated, while analysts can drill down in much more detail.

Ensuring that all reports are drawing from the original form of the data has been quite critical.

Its moved the conversation from, Is the data right?, to very much one about, What are the consequences or implications of the data?, Effeney says.

For example, a network performance power board highlights statistics on the reliability of the network and the top fi ve outages that have occurred in the month, and by drilling down, more specifi c statistics on outages by CBD, urban, or rural areas, and fi nancial dimensions such as target versus actual can be obtained.

Easier access to more reliable data was not the only benefi t of this system implementation.

It came with a change to the way in which we ran management meetings. There was coaching and tools for leaders to be able to have the performance conversation that went with the way in which we are presenting the data, so tracking the

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actions that are required to get things back on track.

Structuring their architectureFor all IT planning, SPARQ has used the Gartner Pace-Layered Application Strategy, which Effeney said helps his staff to talk with managers and end users about where their interest fi ts into the overall framework. This model covers: 1. Foundation Systems: I know what I want and it is common

across most businesses. The processes are stable and mature.2. Systems of Differentiation: I know what I want, but it is

unique to our business. The processes may still be evolving in maturity or changing to support changing business needs.

3. Systems of Innovation: I dont know exactly what I want. I need to test a hypothesis. I need to validate some information requirements with my users.Foundational systems are the ones that are long lived,

fairly stable processes, and we conventionally know what the user wants and how we are going to deliver. The systems of differentiation are [those] where there is a bit more fl exibility, more industry-specifi c parameters about them, like our asset and work systems, and therefore expecting it will have more uniqueness and will need more agility and fl exibility with the approach we take, Effeney said.

The systems of innovation are where we are really testing out some ideas, or where we are doing something which may well have a very short lifecycle, and well take perhaps a more agile, but less rigorous approach to provisioning something until we see that impact. Then maybe it will become a system of differentiation into the next cycle.

Lessons learnedAs SPARQ has worked through these programs of change with Energex and Ergon, there have been some lessons learned along the way about the importance of sponsorship and governance, getting the right people on the job, change and training, delivery models, and investing in the foundational layer.

1. Sponsorship and governance. While this is obviously important for all projects, Effeney said there is something about the BI area that does shine a more signifi cant light on the need for really strong and passionate sponsorship and governance ownership. The outcomes are not always quite as tangible as you might get from some other investments in technology. It sometimes can get a little bit lost along the way, and you do need to have the sticking power of a sponsor to help bring that through, Effeney said. He believes project sponsors for great business analytics projects must have the vision and drive to see the project through, actively guide the integration with other activities or initiatives in the enterprise, and be a passionate user of BI themselves so that they can do the appropriate role-modelling.

2. Getting the right people on the job. Effeney said having run many individual initiatives during this period, the projects that have run better and delivered greater results are those where

there was a 50/50 mix of key business people invested in and engaged with the project, and skilled technical resources.We get people full-time onto the project, get a passionate project manager who is really going to bind them together as a single team, and make sure that you keep the dynamic of the team very strong, he said.

3. Change and training. Especially where the solution will be adopted by a variety of users with different skill levels, providing a range of training is important, as well as putting effort into making sure user groups understand what the solution is all about. Also use different channels to communicate change, to ensure the message is received.

4. Delivery models. Effeney said they continue to use a range of delivery models, including individually contracted specialists for particular functional roles, and packaging work for an outsourced delivery centre. We use project services and partners who are effectively turning more to the turnkey style of delivery, and again we are looking for those to have the right combination of onshore and offshore delivery capability. We found that one size doesnt fi t all, and we do need to really pick on a case-by-case basis how we take this forward, he said. A delivery model and methodology that provides fl exibility and the ability to scale up or down to meet demand is critical to delivering BI business outcomes.

5. The solid foundation. While it might be challenging to get a signifi cant upfront investment without so many tangible outcomes across the line, Effeney said building a solid foundation is crucial, as has been found particularly at Energex. It really has paid dividends in the technology infrastructure, but also in the governance and information management capability, you need to get the right architecture in place, the standards, and then the hardware and platforms, he said.

Future plansNow that Energex and Ergon have that solid foundation in place, moving to using predictive analytics, mobile enablement and geospatial information will be on the agenda for the future.

In an electricity utility, when you look at things like major weather events, and potentially thousands of customers off supply, situational awareness is a big area of opportunity for us.

They are looking forward at areas of predictive, with large capital investment decisions on assets that have 40-year lives being put in the fi eld depending upon forecasting of load and customer training.

Another key area will be spatial data representation. A lot of our data has geo-referencing. The relevance is in

trends across not only our own data, but the external data from local authorities and economic development agencies about whats happening where in the state, Effeney said.

We are only scratching the surface on real-time operational data. The volume of data thats coming through there is a great opportunity area for us.

CASE STUDYENERGEX/ERGON ENERGY


CASE STUDYTENOVA

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