Transcript Blog- The Global Impact of the Coronavirus Pandemic on Utilities Industry
The utilities industry is critical to our everyday lives and even more so during Covid-19 to keep everyone safe and healthy. In this episode of Industry Insights by SAP, Josephine Monberg hosts Marc Rossen, Enterprise Architect at Snohomish Public Utility District, and Stefan Wolf, VP for the Go to Market Execution for Utilities at SAP.
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Welcome to the industry insights by SAP podcast series. My name is Josephine Monberg and I am your host. You are now listening to the COVID 19 special edition of our show. Welcome to our podcast. Hey everyone and welcome to this episode of our podcast. We are taking a closer look at how different industries are being impacted by covert 19 and today we are going to talk about the utilities industry to do this. I’m so honored that I’m joined by two guests, both Stefan, who is from SAP is an expert in the, in the utilities industry. And then we also have Mark Russell, who’s an enterprise architect at Snohomish public utility district. Sorry, that’s a little hard to say. So before we start talking about the utilities industry, what I’d love to do is to first hear a little bit about both of you. So Stefan, if I can start with you, can you tell our listeners a bit about what you do at SAP and also where the world that you can be found apart from obviously being at home?
Yeah. Uh, let me try to explain that. Josie. So, um, my role is part of the industry business unit for utilities. We are a central team, SAP responsible for thought leadership in the utilities industry to understand the needs of the market and roll out the right solution portfolio to our customers, like Mark, the homage, beauty and as around the world. My particular role is here to help with a, with a go to market activities. So to help our customers, our partners, our own colleagues to understand what SAP can do for utilities and us to understand what our customers need in order to succeed in the market.
Hmm. And where can you be found? I know you’re on a different time zone than I am.
Oh yeah. Um, so I’m here in California in the lovely town of Gilroy. If you’ve ever heard of Gilroy’s and you never heard of our wonderful garlic festival, which we have every year. So hopefully, uh, at least next year we can do it again in person, three days, garlic, everything.
That is amazing. I have never in my entire life heard of a garlic festival. But that absolutely, it sounds like something that I’d have to attend. Okay. That sounds amazing. And good 0.7 you just brought up. So I have to do, do you have to mention that, um, Mark is from Snohomish public utility district, which is an SAP customer. So we’re super excited to also get, uh, the voice of her customers, um, as part of this conversation. So Mark, what do you do? What does it mean that your, your role as an enterprise architect and where are the world? Are you
enterprise architecture kind of sits between it and the, um, it’s basically a planning discipline. Um, we look to see where the utility needs to be in the future and then make it easier for us to make transitions when we get there. Um, so it’s mostly around the people and making sure you’re making the right business decisions in an integrated holistic way. Um, I’m up here in Snohomish County, um, which was one of the first locations, um, that COVID was detected in the US um, and, uh, I am at home as most people are.
Exactly. Well, thank you both for sharing a little bit about yourself, so our audience gets to know you a little bit better. So now let’s talk about the utilities industry. Starting with you, Mark, what are you seeing in terms of how the industry is being impacted by COVID 19 routine right now?
So obviously one of the most important things is the people. For utilities it’s all about making sure we can help our customers and make sure we’re healthy enough to help our customers. Um, we are usually kind of behind the scene. Nobody sees utility power comes from the light switch and no one really thinks about us. Um, but we are a, a mission critical piece of keeping everybody safe. And so we worked really hard to focus on our people first. Um, we were one of the first utilities to, uh, move everyone home. Um, and so that’s been a huge impact obviously to most industries. Um, specifically for utilities, there are certain jobs that can’t move home. Um, so we had to make arrangements to how do we keep supporting the people that needed to work on premise. Um, for us that’s our control center and our power scheduling group. Um, and then also how did we move everyone else home, um, and make sure they were safe but also that they could do their jobs at home. Um, some jobs like it jobs move home fairly easily. Um, other jobs like our call center, um, our accounting group, certain other jobs were a big effort to try to get them moved home and get them to be successful at home. So we’ve just been focusing on our people first. Um, and then, uh, enabling them to continue their jobs, uh, from their home locations.
I like that. Always put the people first. What about you Stefan? What are you seeing in terms of the impacts right now on the utilities industry?
Yeah, I can echo what Mark said about the priorities for utilities and the necessity to have utilities still working. So, um, actually I think we hear a lot about the frontline heroes these days. Of course as a doctors, as the doctors, the first responders and the force and the folks in the supermarkets manning the cash desk and what not. Don’t hear so much about utilities line workers as a call center workers who are still actually keeping us well fed at home warm food. So the fridge not spoiling our food and of course entertain us by having internet access at home. So, um, utilties are definitely critical and say you have a, um, nature of supporting the community out there, both their own folks because if they can’t help then who is helping us to keep the power on, but also helping serve as a community at large. So we’ll be seeing these not just here in the US that we had a business washington state and now in New York, quite, uh, some hotspots throughout the world. Who knows? Um, the disease is not, uh, affecting every country. So the same way. Some have more cases, some have less cases. So it was the same is it is utilities, but as a common scene in supporting those communities directly by making sure they can continue to say they do best, uh, as well as to help direct this community in various different means.
Hmm. Yeah. So it’s obviously an industry that’s critical to our everyday lives, but we don’t think about it that much. What are some of the challenges that you’re seeing that the utilities industries facing right now, maybe starting with you again, Mark?
So, um, it’s a lots of different challenges, um, for us, uh, um, we are again, yeah. People first. So that means our customers, um, we’ve, uh, given, uh, credits to our customers, both our residential and our commercial customers who have been hit hard financially. Um, so we’re, Mmm. Dealing with, uh, financial impacts, um, to the district as far as helping customers out with their bills. Um, we do not have a AMI technology. Uh, so we have meter readers, um, who we pulled in. Although they work outside, we wanted, again, people first wanting to make sure everybody was safe. So we stopped reading meters, um, which means we’re estimating bills, um, which is also a, a big impact to our customers. Um, so we have lots of business changes that we’re having to make. We turned off all collections, we turned off, um, all deposits, um, basically shutting down some of the financial, um, uh, Mmm, pieces of the, of the utility, um, in a way to help all our customers during this, during this time. Um, so there’s financial impacts, his business impacts. Um, and of course just day to day, um, people impacts, I’m mean, everybody’s working from home, which is a huge challenge, uh, for many people who aren’t to working at home.
Mm. Yeah, definitely. I can imagine. I think I’m in the lucky position that I am used to working from home. So for me it wasn’t that big of a challenge, but I can only imagine for people that aren’t used to it, it must be a huge change. So Stefan, if you could also touch a little bit on the challenges that you’re seeing and maybe also the role that technology plays in all of this. Because what I’ve seen so far from the interviews I’ve done with other industry leaders is that technology really does play a huge role, especially the acceleration of due to COVID 19. So yeah, I’d love to get your thoughts on that on,
yeah, let me try. So, um, as, as Mark pointed out, uh, some of them, a lot of things which they had to do to support the people to support the customers as well as employees. And Mark is very well aware what this means in an organization who is busy anyway, is a day to day job now to have to adjust business processes, which were established maybe sometime a long time ago. And they’re very used to now to adjust almost on the flip of a switch. Um, if your pardon that kind of Pun here to change the behavior. So how do you stop collections? How do you do that? How do you adjust to technology to help people work from home? Um, both the calls and the trough, maybe from home, can you route all of the information to who are remote work this out there?
So this is where technology really can help to have a, uh, a system which allows you to do these changes relatively easily. Um, but also to be able to recover it on. You can stop things very easily, most of the time, but to restart in a way to keep control while you are doing that, uh, as Mike mentioned, to have, uh, an overview of the financial impact, you need to get all the information together because you want to know where you are as a company, where your customers are. So this is where technology really can help to provide this insight, um, to have says ultimation necessary in order to do your work. When you’re not there, you are typically, uh, doing tons of work to have information still flowing even though you can’t send people out like everybody else is under these lockdown orders, a stay at home orders and so forth.
So here is, the technology really can, can shine. Um, and that’s going to be also, uh, help the utilities community who to use it at its best. And in addition to that, you also have an hour supply chain situation. [inaudible] that’s also a need to protect his equipment, I would say not just to protect them from the electricity or gas or whatever commodities they may be working with, but also to protect them from the virus to slow down infection and the force. So that’s, that needs to be purchased. And you know how empty the shelves are in every store of a full force is equipment. Um, uh, uh, lockdowns internationally, all the supply chains for the typical equipment is limited. So how do you make sure you have enough stock at hand, uh, in, in these times? So these are additional challenges. Uh, utilities at large have to go through in technology, can help to tap into rules of internet international, uh, possibilities and then allow the domestic posibilities to continue to supply as utilities need to run the daily business.
Hmm. And you just touched on communities and I think that Mark, you’re doing something around creating a community together with the SAP as far as I understand. Can you talk a little bit more about that?
Sure. So, um, utilities are a family. Um, we operate in the US for the most part is regulated monopolies. So we’re not competing from a business perspective. So we have a true competitive advantage to be able to share information about what’s going on and what are we doing. Um, so when COVID first started, that was the first thing I did was basically, uh, get our communities together. Um, we all have different groups, different industry groups, whether geographically or because we share the same software or because we are in the same industry. So, um, we started communicating through normal channels that we would be talking about roadmaps and technology. Now we’re talking about the business processes of how we’re dealing with COVID. Um, and it’s been a fabulous response. Um, SAP stepped up with free software and free consulting and you know, helping facilitate the conversations, um, with all of us. And, uh, it’s been really, it’s been really successful. Um, like I said before, it’s all about the people and the people within utilities have really come together to, uh, to help each other. Um, and I think going forward, um, we’ll be even tighter and we’ll be able to continue to help each other as we move into the new normal.
Mm. Yeah, the new normal. And speaking of help, um, SAP, we’re, we’re doing a lot to help as you also just touched on and we offering some, some free solutions as well for our customers. Stefan, can you touch a little bit more about on what we are doing to help?
Yeah, so on a, on a large scale, um, SAP has made certain software available for free in this current situation. So for example, a pulse check to help understand where employees, the customers are from, let’s say even, uh, on an emotional state. All the changes, all the, um, the unknown right now is, is, uh, really hard to live through and to do the work. So it’s very important for both businesses, um, as well as a community at large to understand where are we standing, um, how is everybody feeding? How can they help people to get through this? personally as well as professionally in the, um, also in the supply chains I’ve mentioned that maybe help to discover possibilities in, um, into supply chain, um, to clients have the necessary equipment. As Mark pointed out, specifically in the communities we work in and others who provide some information as a means to adjust to that situation as much as possible to bring people and experts together to find, so I would almost say best practices, but there are no best practices in this situation.
Does this new, um, just hasn’t happened. Uh, not in our lifetime, but since technology around, um, we have seen emergencies and utilities are no strangers to emergencies. I mean this as a hurricane coming in or whatever other nature disaster that’s out there, which are local, then you can help each other by those which are not the fact that, for example, the wildfires can bring in people who have to help restores. And now everybody’s affected. But to, as a culture of helping, be trying to foster us that if you’re try to support that piece, whatever is necessary to get people as quickly as possible going.
Hmm. And I love that. That’s what’s it’s creating the, that human beings are human beings as well. So of course companies are coming together to help each other. And you mentioned something before, you said, I think something about like the road to normal because we talk a lot about the road to recovery, but perhaps we have to talk about the road to normal. So you mentioned where you are now in terms of how you’re responding, but can you talk a little bit more about your road to recovery or as you set your road to normal?
Road to the new normal. So, um, you know, part of that is essentially, um, getting everyone comfortable with the technology, um, and making sure that everybody is now their home. How productive can I be at home? What are some new, with some new things? What are some new training? Um, how are we going to make sure that, uh, everybody can deal with the day to day, um, working from their home location. Um, we will, uh, not immediately move back into a normal situation. Um, once the governor lifts the stay and we start to see more people working back in the office, um, it will be a very slow transition. Um, back in, um, our governor calls it, it’s not a switch. It’s a dial. So every, every lights on a dimmer. And so you, you can, uh, uh, Tim speed stuff up, slow stuff down, just depending on what’s going on.
Uh, from a business perspective, we have a long road to recovery. Um, I, when I look at the recession in 2000, in 2008, um, uh, all of the utilities were hit financially. Um, we have, uh, large industrial, uh, uh, channels that we don’t know what’s going to happen from a construction perspective. We have Boeing here, um, and in our service territory, um, we also have a lot of, uh, market segments that we don’t know if they ever will recover, um, certain restaurants and, and et cetera. So we don’t know what the recovery looks like at this point. Um, we just want to make sure people are prepared. And then, um, for us, we also will have to create brand new business processes. I’m talking about sharing with a, I was talking to another utility, um, yesterday and they were talking about how they’re going to create payment plans.
They’ve got over 15,000 customers that are over 60 days overdue. Um, they’ve turned off Dunning and now they’re talking about how do we automatically help our customers create payment plans, um, where they’ll have up to five years to pay back. Uh, the money that, uh, has been, uh, um, you know, collected or owed while they’ve been, um, not been sending out bills or not been not been paying, able to pay their bills. So it’s, it’s a long road. Um, but it’s definitely going to be a road with new challenges and, uh, and new technologies. Um, being able to, uh, communicate, uh, with both our customers through different channels. Um, we’re talking about how do we offer a chat, uh, with our customers. Uh, since now all of the customers have had an opportunity for the most part to experience, um, uh, the kind of, uh, uh, work at home technologies with video and audio.
Um, maybe that’s a net new channel that we need to think about. My wife’s a second grade school teacher, so she’s been dealing with, uh, uh, second graders using, uh, technology. And so it’s, yeah, you haven’t seen anything too. You’ve seen 24, eight year olds on a, on a meeting. It’s a, it’s very, it’s very interesting. It’s very, very interesting. So my point is, is that, is that you’ve got a whole new generation of people, um, who they’ve been introduced to this technology. Um, and utilities may start to think about how, how do I leverage this in order to, uh, talk to our customers and, uh, give them a different experience.
It’s amazing how this crisis is really accelerating digital transformation essentially for businesses and, and businesses really have to rethink their business model. And then it’s also amazing how you teach that many, did you say it was eight year olds?
8 year olds? Yeah, second grade. So they’re all eight.
So that’s even more amazing how you teach that many eight year olds virtually. So respect to your wife. Um, let’s talk a little bit more about what the future holds. And I love from your perspective, Stefan, to also from, from I guess from SAPs perspective to know what you think about what the future holds and also again, what businesses in the utilities industry should do to, to recover or reimagine or respond at whatever phase we are in.
Yeah. So as Mark pointed out, um, automation, I think it’s very important. Um, I mean that is, uh, from, from an immediate perspective, I think there’s, is still the sweat of a second wave. I think people talk about it the fall, it might come back. So we make, uh, again rising numbers. So, um, maybe, there are additional, uh, similar type of measures being being put in place at that time. So how can we help to prepare for that now that we have made some experience, how this works, how the VU chat for the conferences about how we can help people work at home and so forth. Well, it’s an oldest, a larger business impact. I mean around the world economies have shutdown and yeah, it probably takes years to really come back to what we saw before. As a normal investor, I’d be really truly back to the old normal.
I think that is, that is doubtful. Um, best. There will be always some, some changes. So that one, so again, how can we help here to automate the processes to help that, for example, but what was before an exception, like the payment plan situation out there now it is a common theme. there many customers and business affected to that one. So it’s just not possible to do all of this manually. You have to automate these processes. You want to have the processes also more resilient to these type of, uh, of, of threats from, from the outside today, it was a biological virus. So, so human act them became as a weak link in them. How can we help to make sure that we can keep the humans safe and still get some work done. Who sends also technology to um, the smart meters, which were mentioned before.
You smart meters are in place. You don’t have to send out meter readers in, in this case, uh, unhealthy situations. Um, you can still continue your business and you can continue to serve your customers. It’s through that technology. So obviously these type of, um, technological advancements, whether it is, um, dental integration, data acquisition, because it is robotic automation to, to run the processes automated who helps the agents to focus on two exceptions where you need a human in the act and leave maybe 59 thousands of obviously 60,000, uh, payments, plan cases. Who’s, uh, who’s automation, uh, in general helps a customer to help themselves. Um, and that self service multiple channels, it’s video chat channels and so forth. I think people would see more. So it was coming. What was for the external communities, the customers, the businesses as well as for the employees. to themselves. Um, but I think from a, from a vendor perspective, um, the, the need to acknowledge this. So we built a lot of these, these changes on a process by process basis. Um, and so digital transformation I think will be accelerated suicide, but it will be happening in various different places, not, not a companywide big program. Now let’s throw out everything old and put into everything new out there, but there can be benefits and most from these type of technology advancements.
Hmm. What about you, Mark? Do you, do you agree to have this, I mean, you’ve touched on on the same, uh, themes, but do you have any comments?
Well, the Stefan said, it’s, it’s going to be, uh, a brave new world. Um, um, there definitely will be a new normal. Um, I think, uh, doing processes that you used to do, um, maybe once in a while or from a small volume. Now all have to be thought of. How do we do this in math? Um, and also how do we, um, uh, put instead of switches, how do we put dials? So everything that we used to do is it’s a switch. You turn it on, you turn it off, you turn on this, you turn it off. So how do you go from that to, okay, let’s set it at this or let’s set it at that. Um, so, uh, being able to dynamically respond to whatever’s going on, I think will be kind of a new paradigm. Um, I think this is, uh, you know, the utility industry, um, is very risk averse. Um, which is good. Um, uh, um, so we’re not necessarily the fastest movers, uh, to new things. Um, so this will be a transition for us to have to be more agile, have to be more responsive, uh, to things. And so, um, I, I think, you know, as long as we maintain our primary mission, which is safety, uh, for all utilities, um, uh, I think we can be a little more, um, agile as we kind of move forward in the, in the new normal.
Hmm. Well, I think the new normal sounds exciting even though of course it’s being accelerated massively. So thank you so much, uh, Stefan and Mark for coming on the show. It was so valuable to get your insights on what’s going on in the utilities industry and how COVID 19 is turning everything upside down. So thank you both and to those who listened to this episode, thank you so much for listening in. Hopefully I’ll see you on the next episode.