Evaluating ERP systems in an evolving utility industry

Enterprise resource planning (ERP) systems typically provide support for an organization’s finance, human resources, work order management, purchasing and payroll functions. Finding ERP system solutions for utilities that also incorporate more energy industry-specific functions can be challenging. Depending on the type of utility (i.e., electric, natural gas) and whether a utility owns and operates generation units or is involved in intra-state wholesale transactions and settlements, certain processes, operations and workflows cannot be easily performed in most integrated ERP systems.

Best-of-breed (BoB) applications often fill this void as a means to provide deeper and industry-specific system functionalities that allow utility companies to perform their various operating functions. Despite these capabilities, integration of BoB applications to ERP systems can often require more resources and upgrades that have to be individually synchronized to ensure seamless integration. To help ease the integration of certain industry-specific functions to various ERP system modules, establishing system requirements will allow for determination of the best software solutions. Further, examining end-to-end processes for both regulatory requirements and/or business decisions-making purposes across the overall electric utility business can help determine areas of system enhancements and potential process efficiencies.

Identifying industry-specific functions and processes

Unlike most shared service functions within a utility that may already fall under an existing department (e.g., finance, human resources and purchasing), certain energy utility functions and processes may be comprised of several departments or divisions. For example, the following operational functions of an electric utility with generation assets may include several departments or divisions:

• Fuel inventory
  – Generation – Responsible for day-to-day operations of generating facilities, including planned or force outages
  – Resource inventory and management – Managing both resource inventory (e.g., coal pile inventory) and warehouse inventory
  – Fuel and power procurement – Procuring resources and managing transport of resources.
• Utility billing
  – Customer care and billing – Overseeing the utility billing process from meter-to-cash.
  – Key accounts management – Managing specific contract or tariff agreements with key large non-residential customers.