SAP FERC project updates from customers

We recently heard from two utility companies that HPC has been advising on SAP regulatory reporting enhancements. One will be making HPC Utility Financials Accelerator a regular part of the monthly closing cycle, utilizing UFA's real-time reporting features with December 2012 results. The utility expects that this improved reporting process will free up extra time that the accounting department can use work on other projects.

Another customer just went live with SAP FERC configuration improvements we've made to their classic FERC module, including the implementation of some UFA functionality. Before, this utility only generated regulatory reports once a year, due to complex, time-consuming processes outside of SAP. Now, they can easily run FERC reports monthly, shortly after each month-end close. Everything stays in SAP, and the finance team can drill-down through many levels of each transaction. As part of this project, the utility modified its business process to require that all charges be applied to internal or PM orders, instead of cost centers. In a future blog post, we'll look into the organizational change management that facilitated this significant transition.

What's noteworthy about both of these customers is their shared commitment to getting the most out of the FERC module and legacy General Ledger. Neither is planning an SAP New GL migration at the moment. While we certainly recognize the New GL's benefits (and recently announced a real-time FERC solution for it), HPC strives to be as solution-agnostic as possible. Classic FERC, no FERC, new or old GL, it's all good in our books.

Case Study: HPC Real-Time FERC Solution at We Energies

We Energies (WE) provides electric service to 2.2 million customers in portions of Wisconsin and Michigan's Upper Peninsula, and maintains more than 45 thousand miles of electric distribution lines and over 350 substations. In 2012, WE wanted improve its regulatory reporting processes in order to satisfy regulators more easily, and to facilitate its eventual migration to the SAP New General Ledger. WE selected HPC America's Real-Time FERC Solution for the SAP New GL, which enables utilities running the New GL to generate real-time regulatory reporting data without using the "classic" FERC module. Read the complete case study to learn more about the benefits WE gained from HPC's latest groundbreaking FERC solution for utilities on SAP.

SAP FERC enhancement project, part 2

A couple months ago, we wrote about a new SAP FERC enhancement project that HPC had begun. We've just completed user acceptance testing in the mock client, successfully resolving the utility's FERC reporting issues. We're now gearing up for the launch of the new solution at the start of 2013.

At the core of our solution is a new way of including cost accounting transactions, mainly for priced labor and related burdens for benefits and payroll taxes, to support the FERC balances. This new approach to FERC reporting aligns the CO reports used by internal managers with the external reports used to support regulatory filings, thus providing one version of the truth for all stakeholders.

Part of our remaining work will integrate HPC Utility Financials Accelerator with some legacy programs that the customer has had in place for FERC reporting since their initial launch of SAP in the late 1990's. We've designed and volume tested a solution that will make their FERC requirements easier to meet as they apply for ISO status in the next year or so.

Thanks from SFSU student about HPC presentation

Last week, HPC CEO Jerry Cavalieri presented to the MBA candidates at SFSU. We received kind thanks from one student, who wrote, "It was such a great pleasure having you as a guest speaker in our Information Systems class last evening at SFSU DTC. You presented an interesting, rich, and invaluable presentation about Enterprise Resource Planning (ERP) and the significant contribution it can make to business processes and ROI. Thank you!"

PG&E SAP Design and Testing team new hires from SFSU

Earlier this year, we announced HPC CEO Jerry Cavalieri's addition to the SAP Advisory Board of San Francisco State University. We learned recently that Pacific Gas & Electric has recruited two students from the University's SAP program to join its SAP Design & Testing group full-time after graduation. This is obviously a real testament to the value the students brought during their PG&E internships, but also speaks to the benefits of learning SAP fundamentals in a classroom setting. Students in SFSFU's SAP program cover E-Commerce, Business Process Management, Business Intelligence, and IT Project Management. Learn more about PG&E's decision to recruit the students.

Utility regulation expected to increase

Public Power's recent article by Jeannine Anderson on the "triple whammy" utilities face from pricing volatility, regulation, and a tough economy included a number of insights from Standard & Poor's director Jeffrey Panger.  Panger commented that regardless of this year's presidential election outcome, additional regulation is expected. This jives with the anecdotal feedback we hear from utility clients, who are preparing for that future with better financial tools and analytics that put the data required by management and regulators within far easier reach. Managing important business processes and records outside of SAP—for example in dozens of Excel spreadsheets across disparate departments—is simply not sustainable with the anticipated increase in scrutiny.

Analytics best practices from PG&E's Janet Lee Redmond and Ramelle Ruff

Reflecting further on the 2012 SAP for Utilities conference, we enjoyed the presentation by Pacific Gas & Electric's Janet Lee Redmond and Ramelle Ruff on analytics best practices. While the context was HR efficiency, Janet's and Ramelle's points were clearly applicable to many types of operations and projects. Our key take aways included the following:

• Fewer metrics are better; they're more manageable by their owners, and digestible by the intended audience.
• Choose metrics that truly measure the success of key business processes. While some extra data may be nice to have, that can get noisy and obscure what's actually important.
• Pick benchmarks related to your business, but consider those from outside your industry as well.
• Avoid the "we are special" mentality that often leads to exemptions and non-standard measurements. Do this by collaborating across stakeholders and ensuring buy-in from the beginning.
• Assign owners to each metric, to maintain their integrity over time. Good governance is key to enduring value here.
• Define how data will be presented and strive to eliminate manual manipulation, which will lead to additional versions reports and make periodic comparisons or comparisons across departments and users far more difficult.
• Last, define the frequency of evaluations and updates to your metrics. Ad hoc or reactive approaches will just lead to data that can't be properly compared from one period to the next.