July 20, 2020

Beyond Break-Fix: Why AMS Is Fundamentally Changing for Utilities

Alan Tan

Alan Tan

Vice President - Partner, Intelligent Enterprise Managed Services

Many utilities rely on external partners to provide some level of ongoing technical and functional support based on the capabilities and bandwidth of their own internal resources. Ten to twenty years ago—and to some extent still today—these Application Managed Services (AMS) were often delivered by large numbers of junior consultants with little real-world experience, with the expectation that they would learn on the job and eventually add more value.

For utilities that have been running SAP for a decade or more, this approach is no longer acceptable; they know first-hand how the ERP works and expect support consultants to know at least as much as their internal team, if not more. And just keeping the lights on doesn’t cut it anymore. Today, utilities are looking for their support consultants to teach their internal teams, to boost their competency, and ensure they are getting the most from their SAP technology.

Utegration currently provides SAP support to nearly 20 utilities in North America. In serving these diverse customers, we’ve observed several notable industry shifts that are driving the changes in AMS—from the services utilities want to the manner in which they are delivered. Based on our experience, we believe utilities will benefit the most by moving from “Break-Fix AMS” to “Strategic AMS.”

Utilities need meaningful change now and AMS can deliver company-level innovation.

Employing an AMS partner to offload utility staff has historically been used as an effective cost-savings measure. But at a time of increasing technological change and dramatic changes in the market landscape, the opportunity has evolved into using AMS to leverage your SAP investment as a strategic advantage.

 

Executive management is looking for company-level innovations that, among other benefits, improve customer service, generate new revenue streams, reduce risk, and enhance continuity. Because of the sheer volume of new opportunities, capitalizing on all of them can be a challenge for even the largest utilities. An AMS partner that brings both technical and industry expertise can help utilities prioritize, achieve their goals more quickly and, as we describe it at Utegration, increase their “innovation ratio” to ensure that AMS is adding more value than break-fix work alone.

 

An aging, retiring workforce is driving AMS to provide consultants who know the business of a utility.

As more utility company staff near retirement, support consultants with industry knowledge are increasingly valuable. They bring an understanding of utility-specific business requirements and best practices that enables them to understand processes and goals more quickly and deeply than a consultant who’s never supported a utility company before.

 

For example, Finance, Controlling, and FERC consultants with regulatory reporting or rate case preparation experience can streamline processes, advise on ways to improve data defensibility, and add immediate value by ensuring SAP supports these business functions. Likewise, consultants with utility analytics experience can do more than simply design, build and run reports; their understanding of industry processes means they can also measure performance, share fresh, valuable insights and ultimately, help the utility become a data-driven organization.

 

Complex new technology options are driving AMS to include strategic guidance.

Utilities today face many big questions: What is our ideal roadmap to SAP S/4HANA, and how do we maximize the value of ECC before moving to S/4? Can we replace PowerPlan with an all-SAP asset accounting system? What is the best mix of on-premise and cloud solutions for our needs?

Recognizing that they don’t have all the answers in-house, utilities are turning to their outside partners to understand how to get more out of their current ECC systems, explore the pros and cons of alternative future designs and ultimately, build SAP S/4HANA roadmaps that will deliver value and right-sized implementations.

 

And when it comes to preparing a utility for a re-platforming event, Strategic AMS takes on a special nuance. In fact, Strategic AMS providers are in the best position to guide the re-platforming process, at an affordable total cost of ownership (TCO) precisely because they possess detailed knowledge of a utility’s current processes and customizations. Many utilities are now seeking to onboard to an “all-in- one” SAP S/4HANA solution that includes next generation business processes, the latest advances in cloud-based end user experience, embedded analytics and role-based dashboards, and a solution that is preconfigured for their needs. Given this scenario, the Strategic AMS provider can orchestrate the lift and shift to the new SAP S/4HANA platform and build on their history of delivering business value derived from managing a utility’s technology investment.

 

Conclusion

Utilities that move beyond “break-fix AMS” to “strategic AMS” make faster strides toward their goals—whatever they may be. Strategic AMS will help you better navigate industry and staffing challenges. And importantly, this approach will help you better leverage your significant SAP investment.

At Utegration, our industry and SAP expertise combined with our experience of running nearly 20 utilities’ SAP systems on a daily basis creates an ecosystem of continuous innovation and value for our clients. We not only know which SAP technologies are best suited for certain applications, but also how many other utilities have addressed similar needs and which directions were most successful. If you are interested in discussing how a Strategic AMS partner could help your utility get farther faster, please contact us today.