IT Services & Capacity Building from Cronos group for Utilities in India

Dr. Ralf Bauermann, Chairman,
Cronos Group

pManifold team recently had an interview with Dr. Ralf Bauermann, Chairman, Cronos Group of Companies to understand about their IT and Capacity Building solutions for Utilities in India. (The below shared are author's personal views and not to be associated with any of their company's association)

Please elaborate Cronos IT solution for Utilities? (phase wise modules, current deployment stage (if any PPP / Franchisee), key features, hardware requirements, team size for setup and regular running, business engagement model (Capex vs. Opex based), next planned add-ons, etc.)

As a utility IT solution provider, Cronos believes in engaging the customer for successful implementation of the project and with this implementation strategy Cronos has developed template solutions for utility specific business processes like Billing (Go), CRM (Go), AMI (Go) and migration tools for reducing the implementation time by 70%. Implementation of the SAP End to End Solution in phased manner as per the Utility needs which is a key for successful implementation and continual engagement.
Consulting services are adapting new approaches in reducing in time and cost of implementation to meet the urgent business requirements of utilities to increase their revenue, improve customer satisfaction and operational efficiency.Our express implementations with standard customized templates will help the consulting services team to bring utilities the best (cost and time) in mission-critical software for far less than they might have anticipated.
A standard set of customized templates for critical business processes for specific utility types (electric, gas, water, waste management):

Pre-configured software solution
Use pre-defined tools and approaches for integration with other client solutions
Out-of-the-box training materials specific to our pre-configured solutions
Use Change management approaches

Benefits to Utilities/DF:

Reduce Total Cost of Ownership (TCO) with clear scope of understanding and Prioritizing the business requirements of Utilities
Faster implementations – with time savings of up to 70%
Proven tools and best practices
Comprehensive mitigation of technical and business risks throughout the project life cycle
Lower support costs due to faster adoption by end users and concerns over capacity building will be less.
Rapid resolution of difficult integration thorough knowledge transfer and end-user acceptance

Current deployments with most of the utilities are phase-wise implementations in Europe and mostly on template solutions, and partnering with major IT companies in supporting the critical and major implementation across the world. All the projects are implemented successfully and are under support and enhancements as per the utility needs. All projects are planned implementations as per the utility business needs with on template solutions which allows customers for early deployments and start realizing the benefits.
The template solutions i.e. Billing (Go), AMI (Go) & CRM (Go) are hosted solutions suitable for Utilities and Distribution Franchises (DFs) with complete infrastructure designed (including the hardware, software & networking devices) with managed services by Cronos allowing customers to concentrate on their core business without worrying about IT infrastructure and applications. Capex/Opex model available i.e. customer can pay for the services opted for in phased manner as per the need, allowing utilities/DF to plan for the cash outflow/investment and also helps in utility/DF business planning for expanding the customer base. The offering is very useful and addresses the main issues on the capacity building at the Utility/DF end with its predefined user training's.

What has been Cronos experience with its IT implementation in European Utilities? How is this different from Indian Utilities, if any?

Well, De-regulated markets, state owned Utilities/Private Utilities/Government Utility companies in Europe follow the same kind of infrastructure and technologies. Maintaining same standards and solutions for all of the customer and customer’s satisfaction is prime focus for these utilities.
Was a fully regulated market and government decided in to unbundling and different companies and deregulated the market opening the competition so that the customer is benefitted and companies can manage the same efficiently SAP solution is deployed in all utilities and common working with all Utilities. Solutions are deployment in SAP in for generation transmission and distribution.
In SAP, phase wise implementation is added advantage i.e. Billing, CRM, with Web UI and customer can actually log in and switch from one service provider looking at the overall satisfaction levels, choosing the suppliers based on the performance same as mobile number portability in India and all these business process happens smoothly and seamlessly.
Improve the customer satisfaction and regularitycommission issues new orders and instruction and these changes/updates which due to a stable SAP platform allows the same helping to serve customer better.
Collection of revenue, reduce the losses, managing the system efficiently, adding the same to the new technologies and we have adapted those to SAP and implemented and new initiative and integration of DMS, OMS are possible of SOA.
Whereas the Indian market is completely regulated with government utilities who are now slow adapting the integrated solutions and latest technologies. Private players like Tata power, Reliance, BEST have implemented advanced solutions supporting their operations and improving the customer satisfaction.
Utilities are yet to adapt the technology standardization's and move towards complete integrated END to END Solutions on COTS for better operations and customer satisfaction.

What specific challenges, if any, you see that Utilities faces, which impact the IT solution framework, its implementation approach and business engagement model? What further change or clarity that you believe the industry should bring for reducing gestation and expediting operations?

In our experience, Utilities faces speciﬁc challenges in adapting the latest technologies for improving the operations and reducing the losses, electricity theft, poor grid infrastructure, power supply shortfalls and low metering penetration.
To address the challenges of utilities/DF, IT solutiondeployment which is a key to improve the operations, reduce losses and increase revenues. Adapt the latest technologies which will bring value to overall system by providing the cost effective solutions through suitable model and innovative pricing for monitoring the system performance. Complete visibility of the network identify the loss making areas with complete audit from the data from the solutions implemented. Billing (Go) i.e. complete meter to cash process, AMI (Go) for meter data analysis, connect/disconnect, load analysis.
Most of the business process in smart grid, related to customer i.e. connect/disconnect, demand response etc. needs regulators approvals and support. Depending upon the business needs the tariff structure and policies specifically suitable for distribution franchisee, so that it will be a win-win situation for all.

What customer side best services differentiate the new IT system will start bringing to Utilities? Any results from your Global / Indian implementations?

With the implementation the SAP solutions for utilities, utility can concentrate on the key areas of improvement with less administration efforts and through automated data flows. Utilities/DF can manage and utilize their resources efficiently and their by improve the reliability and quality of power supply. Improve the customer satisfaction and reduce the operational and technical efficiency and SAP modules such as finance, asset management, billing, customer service, plant maintenance, work management, human resource management, business reporting etc.can be plugged in as per the need and time to drive different initiatives for the operational and commercial improvement in various departments. A complete work flow transparency to understand the status of the complaints/request raised online for customers on web portals/mobiles.

How do you see pricing evolving for managed IT services within utilities and specially DF? (Many a times an IT Partner takes too many things on plate, while DF/Utility first needs only a good Billing and CRM solution. Does right incremental pricing will allow DF/Utility to harness best practices over time cost effectively, including adding GIS, SCADA, AMI, smart metering, etc.?)

We have experienced that Price modelling for the managed IT services is important point of concern especially for the DFs. The right approach for DF would be to get implementation in phase wise i.e. metering, billing and collection, asset management, work/maintenance management, core modules of ERP – finance, materials, PM,PS, CRM and HCM. Then there modules can be enhanced by adding other modules like AMI/SCADA /OMS etc. A detailed roadmap for phase wise implementation will allow DFs to add solutions in an incremental manner and also allow incremental pricing with the additional of new features and functionalities.
Base on the budget allocation the company can go for other modules like CRM, PM, PS, AM, HCM etc. At any point of time they can go for adding the integrations like GIS, SCADA, AMI, smart metering, etc. So SAP allows the right incremental pricing to harness the best practices over time cost effectively.

Please elaborate on Cronos venture into SAP Education and its effectiveness for Utilities as complete end to end solution?

Employees of the Distribution Utilities/DF needs to be trained on management, technical, commercial and consumer related area and exposure to the latest developments in electricity distribution, loss reduction and theft and pilferage control.
Cronos has a structured training model for their internal employees as per the skilled resource requirements for SAP implementations. With this training competence cronos partnered with SAP for setting its authorized training centre in Trivandrum. As the SAP implementations and maintenance requirements increase there is a heavy demand supply gap for talented consultants in the area. Our training team is working hard to reduce this gap low. Also for fulfilling the global demand for the SAP consultants our partnering with SAPhelp to certification program for the specialists in the respective industry. For example our own consultants are well experienced domain experts from the utility industry but need to get certified. As SAP ERP has been a deal with business transactions in the respective industry only those who can easily handle who know the real business process in the industry. Apart from the training we are also giving opportunity to the newly trained consultants to work in certain support projects to make them capable of handling the SAP system independently. U-Academy (university associated courses) allows students to get hands on the SAP applications and can support the new and old implementations after their graduation. A specific functional understanding on the utilities/DF regulations etc. is a must for students whom we train at our center.

How is Cronos broader innovation and implementation ecosystem, which you believe can allow a cost effective and robust delivery and services to emerging new PPP models in Utilities?

We believe in an ecosystem which avoid the data islands and ensure the data flow through the industry. Offering different cost effective solutions in utility space in the form of templates, tools and best practices is a sustainable model. With the template systems for billing,AMI and CRM will help utilities/DF for faster implementation there by to get fast ROI. Shared, dedicated and combined models are available to implement these solutions effectively.Utility companies can optimize these solutions in different modes in their existing infrastructure or on cloud. A well equipped dedicated data center team is available with us to manage the customer solutions efficiently and effectively. Customer can also choose different payment option which will help them from the initial investment of hardware and software for the data center.
The pay per use model allows DF to pay as per the existing business areas.Consumers with selected applications monthly and out-flow will increase as the consumer base increases with new applications/needs to suit the requirements on priority.

Having the solution implemented in various European Utilities, what further market evolution and related opportunities Cronos is seeing in Indian utilities?

As you may aware, Cronos is one of the largest SAP IS/U companies in Europe and has implemented more than 1000 projects with customer size from 50,000 to 8 million. With more than 400 SAP expert resources we cater to the complete utility needs and make sure that we not only deliver the solutions. We also make them run. We adapt to the customer practices evolve with the technologies and grow with the customer. Today cronos group is expanding its business and serving utilities with 9 companies at six locations in Germany, one in Austria, one in Canada and 2 locations in India. With template solutions and phase wise solutions approach the target the market in India with utilities/Distribution Franchisees.
With the experience to implement thesolution in various markets we areaiming to provide the best of practice, tools and solutions to Indian utilities/DF for water and electricity with a quick implementation approach phase wisesolution implementation. Implementing solutions in both the regulated and deregulated utility market, withrich experience with European utilities, we had built templates by incorporating the most essential business process for utility industry. As DF’s is a growing segment we build up template solution to cater the needs for DF’s for the faster implementation. Customer gets a chance to select from the different hosting and implementation models which will directly reduce the initial investment cost (CAPEX) for building up a reliable solution. Continual support with different service level agreements (SLAs) and implement continual maintenance and improvement programs.

Posted by: Kunjan Bagdia @ pManifold