SAP was founded in 1972 in Walldorf, Germany and now has offices around the world. Originally known for its enterprise resource planning (ERP) software, SAP has evolved to be among the leaders in end-to-end enterprise application software, database, analytics, intelligent technologies, customer and experience management. The company serves a variety of industries, including energy and natural resources.
The utilities sector in Poland is going through massive transformations, struggling to integrate RES and manage an increasingly decentralized production. How does SAP evolve its portfolio to meet such new demands?
Our thinking is that every industry needs to become agile in this day an age. The challenge with utilities in Poland is that they are heavily regulated so they do not evolve at the same speed as technology. Digitalization strongly depends on whether the regulator is onboard with this new way of thinking, and while we see them opening up the progress is very slow.
Inevitably Poland will need to take this route though, and we are mindful as a company of how the industry evolves and adapt our portfolio accordingly. We make use of new and disruptive technologies such as AI, hyper-connectivity, machine learning, blockchain, cloud or big data analytics.
Can you give us a few examples of innovations introduced by SAP and explain how they make life easier for utility companies?
We designed excellent tools which can lower the number of unplanned downtime. We use sophisticated analytics which can predict failures in the grid and help preempt issues with the health of transformers or other critical elements.
The utility market leaves room for new areas where they can make money, for instance flexibility trading. This is useful for companies that need to balance the network - if they notice a peak approaching, which might cause instability in the grid, they can send a signal to their customers to check what their flexibility is to reduce consumption, in a certain interval.
This counts as intraday trading so we are talking about a sophisticated solution that allows you to make money quickly, the condition is to have a proper IT infrastructure in place and very good connectivity with your customers.
Another area for which we came up with smart solutions has to do with unauthorized consumption, in other words B2B and B2C clients who try to cheat the system. Non-technical losses are high in this part of Europe and through advanced analytics we can identify areas where clients are cheating the provider. For some reason though, utility companies here do not want to admit that these losses are not technical, so for now it remains a missed opportunity.
SAP launched an “experience management” solution, which give insight in how customers and employees feel about certain issues. Can you tell us more about how it works?
This is an excellent tool for retailers, including those in the energy sector. There is often a disparity between how you think customers feel about your products and services and how they actually do feel. For instance we can also use this solution in the refineries or power plants to understand employees emotions like conflicts between old and young generations influencing overall performance.
What commonly holds back companies in the energy sector in Poland from adopting modern technologies?
Security is a great concern, for instance they assume going into the cloud will lower the level of security around their distribution network or generation assets. But this could not be farther from the truth - security standards for big players like us or Microsoft are incredibly high.
An important challenge in Poland is openness towards innovative thinking. To be successful in the digital transformation one must be ready to take on risks, think bold. Small steps may take you to where you are going, but the chances of success become lower.
Are you looking at ways to create a higher appetite among industry members? What approach works best in your experience?
What works best is references, showing companies what others have done and that it worked. But even this proves difficult here, because Polish utilities are not open to meet and learn from the experience of others.
Even when public companies are open to innovation, in several cases we get stuck with their procurement teams who want to receive the exact description of what they are buying. This is not possible though given we are talking about innovation - it is a chicken and egg type situation. And in the rare circumstances when we get projects off the ground chances are they will get discontinued, usually because of top management instability.
Co-innovation is the go to approach in many other markets, are Polish companies interested to collaborate in this way?
This is an ideal situation actually, talking openly with companies to understand their pain points and co-innovate. Overall innovation is difficult in Poland, the projects are few and trust from big partners limited. Too often innovative work is limited to labs and remarkable ideas do not end up implemented in real production environments. A very unfortunate circumstance, because the real value stands in taking these innovations to market.
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