Within the current confluence of digital transformation, regulatory demands, and sustainability goals, utilities must balance the imperative to modernize aging infrastructure with an underlying need to maximize existing technology investments.
For many utilities, migrating to SAP S/4HANA is a priority —and a pressing challenge, given the need for business and IT leaders to upskill their organizations to leverage the platform while contending with the ever-increasing complexity of integration. Despite such issues, utility leaders largely recognize the need to modernize while harnessing advanced data analytics, automation, and a digitalized ERP core to stay competitive and meet customer expectations.
According to Henry Bailey, Senior Director, Strategy, Products & Domains at Utegration, a Cognizant Company, utilities are in a unique position to not only overcome such obstacles but become change drivers for the world of business.
In his role at the company, which serves over 50 North America-based clients (and 90+ globally) in the energy and utilities sector, Bailey oversees industry-specific solutions like Finance4U and MeterData4U, some of the modules within the company’s end-to-end Utility4U solution, which is designed to address the specific pain points utilities face as they transition to digital-first operations and to help companies get the most value from S/4HANA. These solutions go further than accelerating implementation processes by fostering a community in which collaboration and shared innovation can collectively drive the industry forward.
As utilities evolve, trusted partners like Utegration and Cognizant become even more critical. With a deep and longstanding understanding of the industry and SAP technologies, Bailey and his team are well-positioned to help leading utilities to shape their sector’s future.
In conversation with ASUG, Bailey reflected on building the business case for SAP S/4HANA, minimizing risk with industry accelerators and in-app learning, and using innovative technologies to balance agility and flexibility with safety and reliability, as well as the past, present, and future of the SAP for Utilities conference.
This exclusive ASUG interview, which you can download for free, has been edited and condensed.
Q: What are some of the big-picture trends you’re seeing in the utilities sector, and what’s exciting to you about that progress?
Going back a bit, when the concept of the cloud was still pretty new to many, I was at SAP, leading a global team of industry advisors for utilities. Back then, I had to explain what the cloud was and why it would enable them to achieve the goals of their technology roadmaps and better serve their business and customers. Now, what’s exciting is that we’ve fully embraced cloud-first strategies. Thanks to cloud-based data management and analytics technologies, these strategies enable us to accelerate projects and gain insights more quickly.
At Salt River Project, for example, they’re moving from a mainframe on-premises solution to SAP S/4HANA with the RISE solution. We’re also working with them to implement a new CRM with Service Cloud 2.0 and enable their Advanced Metering Infrastructure (AMI) program. This isn’t just about digitalizing their core systems; it’s about leveraging cloud technologies to achieve broader benefits. Many utilities are thinking this way now, taking advantage of the cloud to simultaneously tackle multiple aspects of their roadmap.
Q: What are the challenges and opportunities utilities face in this movement toward cloud and modernization?
Resources remain a significant challenge, particularly finding the right people to participate in these digitalization efforts. However, solutions like Cognizant’s pre-configured content solution for S/4HANA, Utility4U, can help. It reduces the burden on the utility by making it easier to implement changes, though the utility still makes the critical decisions.
“By digitalizing the core, utilities can now treat their business processes like physical assets, giving them the attention and care they deserve.”
On the opportunity side, the possibilities are endless. We have finally done something that has taken us 20 or 30 years to do, which is to treat our business processes like a physical asset. By digitalizing the core, utilities can give them the attention and care they deserve. With tools like SAP Signavio, utilities can leverage this to support the Center of Excellence (CoE) concept and the notion of treating your process like an asset. It allows utilities to adapt quickly to external market driver changes, such as new sustainability demands, by having a more flexible and responsive operational framework.
Q: For utilities at the start of their journey, what factors are key to building a successful business case for S/4HANA transformation?
Building a business case is critical. But in our changing world, a shift is required — we must move away from cost as the basis. While modernization is essential due to changing technologies and the fact that companies like SAP may no longer support older systems beyond a certain time, the focus should be on the benefits, including easier management and maintenance of systems and the ability to attract new talent. Choosing a technology stack that will draw talent to your talent pool wherever your utilities lie is crucial.
For example, we are working with a utility company that asked how they could get people excited about moving to North Dakota. The reality is that, with modern technology, many roles can be performed remotely, so it’s about making the work itself appealing. In my community, I consult with my local university and alma mater, East Tennessee State. When young people ask about careers in this field, they’re interested in the potential for innovation and impact, not just the technology.
Monetizing this thought process is important for building the business case. We work with utilities to think through these benefits on the front end, ensuring they can pass through funding cycles and gain necessary approvals, especially in regulated environments. Sustainability is another key factor — utilities are heavily leaning into sustainability in a manageable way. The digital core, and the ability to adapt to support that, is so critical.
Q: How can utilities balance agility and innovation with safety and reliability?
The key to balancing these priorities is establishing CoEs that manage business processes as assets. This approach allows utilities to continuously adapt and improve their processes in response to changing market conditions, viewing processes not just as operational necessities but as strategic assets that deserve the same care and attention as physical assets.
For example, with SAP’s acquisition of Signavio—which, by the way, Cognizant offers a limited seating license to allow clients to install and use Signavio components for a period of time at no charge—we’re seeing utilities leverage these tools to support their Centers of Excellence. This helps them treat processes as assets, which is crucial because external factors, such as new regulations or sustainability goals, can require quick adjustments. By having a solid foundation in place, utilities can innovate and remain agile without compromising safety or reliability.
Q: How can continuous innovation empower progress in decarbonization and electrification efforts?
Continuous innovation is crucial for advancing decarbonization and electrification. It all starts with creating a safe and adaptable digital core that enables individuals who are passionate about these issues to contribute effectively. Breaking down large challenges into manageable parts allows teams to address each aspect with focus and precision.
In utilities, the drive toward sustainability is increasingly seen as a critical goal. Companies are now more committed to sustainability than ever before, and the ability to innovate continuously allows them to make meaningful progress. For instance, with SAP’s technology stack, once the digital core is in place and processes are treated as assets, utilities can leverage platforms like the SAP Business Technology Platform to continuously adapt and support their evolving sustainability and decarbonization goals, making it possible to align daily operations with long-term environmental objectives.
Q: How can utilities build the necessary skills and capabilities for future digital transformation?
Building the necessary skills and capabilities starts with establishing Centers of Excellence and engaging with the next generation of talent. The workforce we’re trying to attract is motivated by meaningful work, such as sustainable operations and contributing to their communities.
Today’s younger workforce isn’t just looking for a job; they want to be part of something that makes a difference. They’re concerned about climate change, sustainability, and working for organizations that align with their values. SAP’s focus on enabling technology that supports these goals helps attract and retain this talent.
We’re seeing utilities get excited about owning this process and collaborating to manage these initiatives. By creating environments where these goals are achievable and where individuals feel they can make a difference, utilities can build a motivated workforce ready to drive future digital transformations.
Q: What’s exciting about an accelerator or preconfigured solution like Utility4U?
The primary appeal is making the implementation process more seamless. It’s not just about discussing best practices but showing them to stakeholders from day one to help orient them toward the changes that will occur, particularly from a process point of view. Higher adoption of these best practices leads to fewer customizations, which is key to keeping a “clean core” — a concept SAP is pushing.
Utility4U drives companies toward this clean core by offering proven best practices that have been implemented across many utilities in North America.
Each utility has unique aspects, and we recognize that. However, the higher the adoption of base processes, the easier it is to manage and maintain systems moving forward. Utility4U comes with everything you need — process artifacts, configurations, testing, and training content. It’s as close as you can get to a SaaS experience paired with RISE, which makes it particularly appealing to mid-sized utilities that may not have the budget for longer projects. The accelerator can significantly speed up the project timeline, depending on how fast the utility can accommodate change.
"This community-driven approach means utilities can learn from each other and build on shared innovations."
As more utilities adopt Utility4U, they share their content, which we then fold back into Utility4U, enhancing it for everyone. This community-driven approach means utilities can learn from each other and build on shared innovations. It helps utilities move up the maturity curve faster than they would on their own.
Q: Given the utilities sector’s unique regulatory and operational challenges, how more specifically does Utility4U foster a community of shared innovation?
Utilities face many shared issues—corporate goals, evolving regulations, and industry-specific challenges—that aren’t always found in other sectors. The ability to share and learn from each other helps utilities address these common challenges more effectively.
At conferences like SAP for Utilities, Presented by ASUG, we make it a point to gather Utility4U clients, often in a more informal setting like a dinner, to facilitate these connections. They talk, share their experiences, and come back to us with ideas like, “We’re going to do what they’re doing.” This kind of networking is invaluable because it helps them learn from each other and adopt best practices more quickly.
What’s unique about Utility4U is that it’s more than just a pre-configured solution. We treat the process of managing and maintaining the content as a product in itself. We have a dedicated product management team focused on keeping the content fresh, studying SAP’s roadmap, and incorporating new products like S/4HANA, Service Cloud 2.0, and Signavio. This ongoing investment in content ensures that Utility4U remains relevant and useful to utilities as they evolve.
Q: How does Utility4U help utilities balance innovation with the need for safety and reliability?
Balancing innovation with safety and reliability is a major focus for utilities, and Utility4U supports this through the concept of Centers of Excellence. Each utility adopts Utility4U differently, depending on where they are in their journey. Some use it as a reference platform during the planning phase, while others integrate it into their ERP or CIS implementations.
What’s critical here is the ability of utilities to leverage Utility4U to maintain their core responsibilities—providing reliable service—while also exploring new opportunities. Utilities are trusted service providers, and that trust only waivers in storms or natural disasters. By maintaining and communicating with their customers, utilities earn that trust, which in turn gives them the license to explore new industry drivers.
Centers of Excellence established with Utility4U allow utilities to ask, “Is SAP the right solution for this?” or “Should we integrate with a third-party solution?” This helps utilities make decisions more quickly and adapt to changes without compromising their core operations. The technology has advanced to the point where it’s not as disruptive as it once was, allowing utilities to innovate while maintaining safety and reliability.
Q: With the industry moving toward trends like electrification and decarbonization, what excites you most about the future of utilities?
Seeing utilities recognize the strength of their brands and the trust they’ve earned from their customers. People often take utilities for granted, expecting clean water and air, reliable gas, and electricity at the flip of a switch. But recognize the work that goes into ensuring this is the experience we have every day. When utilities realize they can leverage this trust to introduce new products and services, it opens up incredible opportunities.
For example, DTE Energy, in Michigan, has set aggressive decarbonization goals and made significant progress by extending SAP Cloud products like Commerce Cloud to offer new services directly to customers through a portal. It wasn’t a massive investment, but its impact on their sustainability goals has been massive. I’d love to see more utilities follow this lead, realizing they can be both a reliable service provider and a driver of innovation in electrification and decarbonization.
Once a utility has digitalized its core and set up a Center of Excellence, it can push harder and move more quickly in these areas without sacrificing safety or reliability while gaining the ability to adapt and extend its capabilities in response to industry trends.
Q: It’s clear that utilities are ahead in their SAP S/4HANA journeys compared to other industries. What roles will continuous education and influence play in this progress?
Continuous education and influence are crucial in sustaining progress within the utilities sector.
The utilities industry has a strong tradition of sharing knowledge and providing feedback—in essence, educating one another—which is why they’re often ahead in their SAP S/4HANA journeys. Engaging in ongoing dialogue, providing feedback, and influencing SAP’s development roadmap has allowed utilities to adapt more quickly to changes and effectively implement technology shifts.
And because utilities are trusted by their customers, and are a conduit to improving sustainability, they’re in a great position to influence the actions of their customers, their communities and, by extension, the world.
Q: What has excited you most about the expansion of the SAP for Utilities, Presented by ASUG conference, and what are you looking forward to at this year’s event?
SAP for Utilities is my favorite event of the year, and connecting with everyone face-to-face is an amazing experience. The success of SAP for Utilities has been a source of great pride since its launch in 2008. It started from nothing, with our first event in San Antonio aiming for 300 attendees but drawing over 800. The conference has grown into a key industry event where the utilities community can come together, share knowledge, and build on each other’s successes.
What makes this event unique is the sense of community within the utilities space. It’s more than just a conference; it’s a place where people can connect, exchange ideas, and support one another in their professional journeys. This collaboration is something you don’t see in every industry, and it’s one of the reasons why SAP for Utilities has continued to thrive.
"I’m excited to see how many utilities are in the planning phase. It’s a sign that we’ve reached a tipping point."
This year, I’m excited to see how many utilities are in the planning phase. It’s a sign that we’ve reached a tipping point — so many utilities are now ready to move forward with their plans. Seeing that reflected in the agenda is incredibly encouraging. I’m also eager to use this year’s conference to connect with everyone on a deeper level, especially around the topic of collaboration. What is most important is that we’re all working together to help utilities thrive.
It’s always inspiring to see how attendees take what they learn back to their organizations and implement it to drive real change. The event has become a cornerstone for the industry, and I’m looking forward to seeing how it continues to evolve and bring the community together.
Visit the Utegration website.
About Utegration, a Cognizant Company
Utegration is a full-service consulting and solutions provider specializing in SAP® technology and SAP-certified products for the energy and utilities sectors. Utegration builds and optimizes new technology for finance, regulatory, customer management, and asset operations to maximize our clients’ return on investment, while minimizing risk and complexity. Our industry experts have earned the trust of energy and water providers across North America with outcome-driven roadmaps and a track record of successful implementations.
About ASUG
ASUG is the world’s largest SAP user group. Originally founded by a group of visionary SAP customers in 1991, its mission is to help people and organizations get the most value from their investment in SAP technology. ASUG currently serves thousands of businesses via companywide memberships, connecting more than 130,000 professionals with networking and educational resources to help them master new challenges. Through in-person and virtual events, on-demand digital resources, and ongoing advocacy for its membership, ASUG helps SAP customers make more possible.