Utilities on SAP: Four Best Practices for Asset Accounting on SAP S/4HANA

During the last 25 years of advising utilities, it was around 2013 that we started to hear customers vent about asset accounting. Some of them used quite strong language, while others were more politic. Over time, we realized that the utilities experiencing the greatest frustration were those that had moved key elements of their financial process outside of their ERP. For them, optimizing SAP Financials to meet today’s more stringent regulatory environment — for example, streamlining their cost flow to improve transparency — was much more challenging because it would entail unwinding complex integration between SAP and another solution. 

Looking ahead, we see at least four best practices around asset accounting that will help utilities get the most out of their investment in SAP S/4HANA by configuring it correctly from the start:

(1) Focus PowerPlan on taxes and retirement unit calculations.

These specialized functions warrant a dedicated tool, and the utilities we’ve worked with largely acknowledge that PowerPlan is a capable one.

(2) Use SAP Controlling (CO) for allocations.

Retaining this function in SAP increases visibility into true costs for comparing job estimates to actuals. The CO module can apply overheads more efficiently than just once a month, even daily if desired. As utilities move towards continuous accounting in the coming years — enabled through mobile devices in the field that capture the cost of work performed — there will be less of need for fully loaded rates. Utilities we’ve worked with that move allocations and settlements outside the ERP often come to regret it because of the added complexity and latency between when direct costs were incurred and when overheads were applied. In contrast, in S/4HANA which brings OLAP and OLTP together, CO can provide more timely and granular data that makes Board reports more meaningful. Utilities will be able to see and correct spending variances earlier.

(3) Use SAP Project Systems and WBS elements for AFUDC.

Utilities turn on interest charges when capital work is in progress, and then turn them off when work is technically complete. Using WBS elements integrated with SAP EAM enables you to see immediately when work status has changed, therefore resulting in a more timely and accurate posting of AFUDC. Calculating AFUDC outside the ERP can often lead to adjustments that would otherwise have been unnecessary, and complicates the process of getting the right charges into the rate base. 

(4) Get visibility into Plant Accounts in your Universal Journal.

Instead of summarizing Plant Account costs to one account - 101, Plant in Service — utilities on SAP S/4HANA have a tremendous opportunity to post all of the rich, line item detail in the Universal Journal. On SAP ECC, this level of detail would be invisible to the FERC module. But on S/4HANA with HPC DECIPHER, our latest add-on solution that is certified by SAP as integrated with S/4HANA, the entire contents of the fixed asset sub-ledger can be laid out as line items in the Universal Journal. DECIPHER will translate your 300-series plant accounts for each capital transaction as PIS to FERC account 101 in the same level of detail as in your fixed asset sub-ledger. DECIPHER can also split plant accounts based on predefined percentages, and then present the data in a separate FERC ledger. As a result, detailed capital costs will be in the same table (ACDOCA) as detailed plant transactions, and they can all be analyzed using the same tool, such as the SAP Analytics Cloud.   

When your utility is evaluating plans for asset accounting on SAP S/4HANA, contact HPC America to talk about strategy for SAP Financials and Work Management for utilities on SAP.

Innovation for Utilities on SAP Since 1994

Big news: 2019 marks HPC America’s 25th anniversary. We first got our start in the United States in 1994, after a decade of success in Germany, when SAP's Hasso Plattner asked HPC AG’s founder, Josef Heck, to assist with the SAP ERP implementation at Pacific Gas & Electric. HPC America’s primary contribution was the creation of the first regulatory accounting solution for utilities on SAP — the “FERC module” that is still delivered with SAP S/4HANA to this very day (not that we’d recommend you continue to use it alone - but more on that later).

Since that time, HPC has demonstrated an unmatched track record of pragmatic consulting services and innovative add-on software solutions for utility companies on SAP. For utilities large and small, public and investor-owned, we’ve optimized accounting processes, streamlined cost models, made functionalized financial data more meaningful, and, ultimately, helped our amazing customers get more out of their investments in SAP.

Most recently, we led the first-ever integration of SAP C/4HANA Cloud for Customer with on-prem IS-U billing, establishing a powerful, flexible CRM system for NTUA that leverages their existing SAP ECC without further taxing their lean IT department. And our latest add-on solution, HPC DECIPHER, is certified by SAP as integrated with SAP S/4HANA and enables utilities to replace old FERC batch processes with a modern, line item model that generates better data, much faster.

Credit for HPC’s endurance over the last 25 years must go to our incredible team of people. Their functional and technical SAP skills are strong, and they continue to learn more as the technology has evolved. They bring years of utility industry knowledge, many having been former utility company employees, and that first-hand understanding of the business of a utility resonates deeply with our customers. Guys, your competency is tremendous, and we wouldn’t be here without you.

To see how HPC’s 25 years of dedication to utilities on SAP can benefit your company, meet us in two weeks at SAPPHIRE 2019 at Booth 346A. We can share insights on how SAP C/4HANA works in the real world, walk you through a demo of HPC DECIPHER, or talk about anything else on your mind about SAP Financials, Work Management, Billing, and CRM for utilities on SAP. Contact us to schedule an appointment in advance.

Salt River Project Simplifies FERC on SAP ECC and Improves Readiness for SAP S/4HANA

Salt River Project (SRP) is a community-based not-for-profit utility that provides reliable, affordable water and power to more than two million people in central Arizona. SRP has provided these essential resources for more than a century to meet the needs of customers and help the region grow. SRP has been on SAP since 2013, and currently runs SAP ECC 6.0 on Suite on HANA and BW on HANA.

In anticipation of its migration to SAP S/4HANA in 2023, Salt River Project engaged HPC America in to evaluate its current SAP Financials processes and results, and to identify areas for improvement that would not only deliver immediate benefits, but also streamline the utility’s eventual transition to S/4HANA.

After the assessment, SRP engaged HPC to optimize its FERC model with HPC Utility Financials Accelerator (UFA) add-on software. HPC UFA eliminates the FERC module’s limitations, and runs on both SAP ECC and SAP S/4HANA.

Five months later, SRP was ready to go live with its new FERC design. The project achieved all intended objectives and more: SRP’s balances by FERC account now match exactly—to the penny—its reports by order number, WBS element, cost element, and cost center, thereby making functionalized data far more intuitive for users to analyze.

Download the full case study to read all the benefits SRP now enjoys.

Case study: SAP C/4HANA Service Cloud Integration with IS-U Billing

One week from today, on October 16, 2018, at the SAP for Utilities conference in San Antonio, TX, the Navajo Tribal Utility Authority and HPC America will present NTUA's case study on SAP C/4HANA Service Cloud integration with the IS-U billing module.

This is the first-ever such integration, and showcases how utilities running on-premises ECC 6.0 can take full advantage of SAP's latest HANA and Cloud technology prior to upgrading their core ERP to S/4HANA. NTUA's Deputy CFO, Gerard Curley, and HPC's CEO, Jerry Cavalieri, will lead the presentation and share their SAP C/4HANA project leadership experience. Learn more about the C/4HANA case study and about HPC's services for implementing C/4HANA.

Contact HPC America with questions about C/4HANA integration with the IS-U, and to schedule a demonstration of SAP C/4HANA Service Cloud at the 2018 SAP for Utilities conference.

HPC DECIPHER® 1.0 Achieves SAP-Certified Integration with SAP S/4HANA®

We’re pleased to announce that our software solution HPC DECIPHER® 1.0 has achieved SAP certification as integrated with SAP S/4HANA®. The integration helps utility companies to realize greater accounting transparency, speed up the monthly close and, ultimately, strengthen rate-case positions with the most defensible cost of service data.

HPC DECIPHER builds on HPC America’s nearly 25 years of experience advising utilities on SAP solutions. It leverages the Universal Journal in SAP S/4HANA for modern, line-item-based regulatory financials . HPC DECIPHER eliminates time consuming batch processes, and includes real-time translation, powerful allocations, insightful cost flow forensics, and other useful utility accounting functionality.

The SAP® Integration and Certification Center (SAP ICC) has certified that HPC DECIPHER version 1.0 integrates with SAP S/4HANA 1610 using standard integration technologies. SAP S/4HANA is the next-generation business suite, built for the SAP HANA® platform, with on-premise and cloud deployment options. It is designed to act as the digital core, helping customers drive digital transformation across their entire organizations, taking advantage of the award-winning, role-based user experience of SAP Fiori®.

“We are delighted that HPC DECIPHER has achieved certified integration with SAP S/4HANA,” said Jerry Cavalieri, CEO of HPC America. “The ability of DECIPHER to interoperate with SAP S/4HANA gives utility company controllers, rates, and IT professionals an even stronger business case to upgrade to SAP S/4HANA.”

Learn more about HPC DECIPHER at the 2018 SAP for Utilities conference in San Antonio, Texas from October 15-17, 2018.

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HPC DECIPHER is a registered trademark of HPC America.

SAP, SAP S/4HANA, SAP HANA, SAP Fiori and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. See http://www.sap.com/corporate-en/legal/copyright/index.epx for additional trademark information and notices. All other product and service names mentioned are the trademarks of their respective companies.

SAP® C/4HANA Service Cloud Case Study at the 2018 SAP for Utilities Conference

On Tuesday, October 16 at the 2018 SAP for Utilities conference, Navajo Tribal Utility Authority and HPC America will present NTUA’s case study on the first-ever integration of SAP C/4HANA Service Cloud (formerly Hybris Cloud for Customer and SAP C4C) with a utility’s on-premises SAP ECC ERP and IS-U billing module. NTUA’s Deputy CFO, Gerard Curley, and HPC’s CEO, Jerry Cavalieri, will share the project’s strategy, results, and lessons learned.

NTUA had a mandate to implement a new call center to increase operational efficiency and improve customer satisfaction across its 27,000 square mile territory. In April 2017, NTUA made a cutting-edge choice: rather than implement an on-premises CRM that would further stretch its IT resources, the call center would use SAP C/4HANA Service Cloud connected to the utility’s on-prem ECC 6.0/IS-U system via SAP Cloud Platform middleware. Nine months after kickoff, NTUA became the first utility in the U.S. to put such a system into production.

This session at the SAP for Utilities conference will showcase…

• How utilities can benefit from SAP C/4HANA even before upgrading to S/4HANA
• NTUA’s business case for selecting C/4HANA Service Cloud
• Lessons learned from the implementation and subsequent 90-day upgrade cycles
• Results since the January 2018 go-live, since which time NTUA’s customer service representatives have logged more than 15,000 tickets in C/4HANA Service Cloud

NTUA’s HANA-powered, cloud-based CRM now tracks customer interactions in detail, improves responsiveness to payment inquiries, reduces the chance of unnecessary shut-offs, and establishes a mobile-ready foundation for field technicians—all while leveraging NTUA’s existing SAP ERP. NTUA's customer service representatives are no longer dependent on the Customer Interaction Center (CIC0), which is not offered in S/4HANA. The SAP C/4HANA Service Cloud supports NTUA's new call center with a modern, feature-rich CRM to improve customer satisfaction; provides customer-facing team members with a great UX — anywhere, on any device; and, longer term, establishes an infrastructure for NTUA to standardize customer service practices across its headquarters and district locations.

To learn more about SAP C/4HANA Service Cloud integration with the IS-U, register for the 2018 SAP for Utilities conference and attend this unique presentation on Tuesday, October 16 at 2:40pm. Contact HPC America if you'd like to discuss C/4HANA prior to the conference.

Meet HPC at the 2018 SAP SAPPHIRE NOW Conference

HPC America will be exhibiting in Booth #1433A at the 2018 SAPPHIRE NOW - ASUG ANNUAL conference in Orlando, FL from June 5-7, 2018.

We are a team of utility industry experts dedicated to everything touching financial solutions from SAP. Since developing the original IS-U financial solution for utilities 25 years ago, HPC has optimized accounting, billing, CRM, asset management, and regulatory financials for utilities on SAP. See our online resources for utilities on SAP.

Most recently, HPC led the first-ever integration of SAP Hybris Cloud for Customer (C4C) with on-premises IS-U via SAP Cloud Platform middleware, including cloud-to-cloud integration of Paymentus.

HPC also has a long track record of developing add-on software for utilities on SAP, including HPC DECIPHER, a line-item financials solution for utility companies on SAP S/4HANA that leverages the Universal Journal to provide total visibility into cost flows, automate mass reversals, and corrections, and strengthen rate case support. HPC offers customers unmatched expertise in utility accounting based on decades of experience as industry insiders.

At the 2018 Sapphire conference, stop by our Booth #1433A to see demonstrations of SAP Hybris Cloud for Customer (SAP C4C), HPC DECIPHER, and our other NetWeaver-based solutions for utilities on SAP; and to discuss your utility's SAP ERP strategy and roadmap. Contact us online to schedule a meeting at SAPPHIRE.