By Lloyd Adams National Vice President, SAP for Utilities, SAP America Inc.
Like all industries, the utilities industry is increasingly looking to cloud technology to support business needs. More and more decision makers want to understand how to expand into the cloud without abandoning the architecture they’ve built to support their business processes.
But is now the time for utilities to migrate to the cloud? In a recent blog, Bruce Meyer outlines six reasons why he believes utilities are tantalizingly close to reaching an inflection point of widespread adoption of cloud technology.
I agree – and here’s why.
Ability to eat your cake and have it too
Utilities can now separate typically lower-value transactional data and record-keeping functions, which can run in the cloud, from the higher-value insights and decision-making functions that can remain on premise. Talk about being able to eat your cake and have it too! Utilities that adopt cloud technologies can reduce their operational costs and access newer functionality much quicker than they can though traditional methods.
Cloud enablement for utilities makes even more sense where business processes can be repeated, measured, and monitored, such as the procurement of goods. A utility may send out a request for bid for construction materials to a series of vendors. Then the utility may send out another request for additional materials. The bid request may go to different vendors or maybe some of the same vendors, all done via the cloud.
Flexible deployment options
With the number of cloud options available, there’s a lot of flexibility in how you make the transition. You don’t need to rip and replace your infrastructure; you can make step-grade transitions that keep you within your organization’s vision, budget, and tolerance for change. It depends on your preference and the road map you want to build.
Proven line-of-business solutions
Many utilities are looking at hybrid strategies. For them, running certain lines of business in the cloud – like core HR processes, procurement, and contingent workforce management – make sense today. There are proven solutions to support these processes that utilities are currently using with great success. In other areas, like billing and asset maintenance, many utilities are reluctant to change.
Reduced total cost of ownership
This reluctance may be because utilities traditionally prefer to own hardware and software. Perhaps that’s because these items can be recorded as capital expenditures. But in time, that argument will have little bearing. When you consider the total cost of ownership and the benefits of cloud technology, making the transition is inevitable.
Adopting cloud solutions helps utilities reduce up-front costs, which has a big impact on the bottom line. It helps utilities save money in the long run by avoiding longer, multi-year implementations. It also reduces the number of internal resources needed to maintain the technology and shifts the responsibility of upgrades and security to the software vendor and data center operators.
Greater agility and faster innovation
In addition to reducing cost, moving business to cloud fosters innovation. It enables utilities to be more nimble and introduce products to market more quickly to drive revenue. Who can argue with that?
As in any industry, some utilities are making the transition to the cloud more quickly than others. In North America, many utilities are on the forefront of cloud adoption. It’s exciting to be a part of their journey and see the opportunities through their lenses.
The bottom line is this: Business is moving to the cloud. The cloud is permeating all aspects of life through cloud-centric transactions and social interactions. Whether you’re resistant or not, the cloud is coming to the utilities industry. It’s happening quickly and that is an exciting place to be.
If you’d like to learn more about cloud solutions for the utilities industry, please visit sap.com/utilities.
Feel free to share your views with me about this topic in the comments below.