The IT department at Eskom, the national supplier of electricity in South Africa, is working on a multi-year plan to become a top-five IT department in the utilities sector.
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Sai Laher, divisional executive for information management at Eskom has his work cut out. He says: “We want to make a difference to how Eskom runs.”
But from his own assessment, IT was a poor performer. His version of Gartner's eponymous Magic Quadrant places Eskom's IT at the bottom left, a place many organisations are none too happy to be in.
“IT used to be inward-facing and reactive,” he explains.
But he aims to align IT with the business through a programme dubbed Back To Basics (B2B) to move IT up to the top-right quadrant..
Keeping the lights on
Clearly South Africa faces different challenges to Western Europe, but Eskom's CIO faces many of the same challenges of CIOs in other parts of the world. Mobile banking is fast becoming the easiest way to transfer money, and the concept of an e-wallet is being extended to electricity. Laher says people who use prepaid cards for electricity and paid on a pay per use basis, can now purchase their electricity via text messaging. It may be a low-tech solution, but in South Africa there are 4.8 million people who could benefit from a text messaging based payment system for electricity.
And while there are electricity blackouts, when the country is unable to meet demand, Eskom claims these blackouts are scheduled. It warns people via television broadcasts that their electricity supply is running low. The broadcasts provide instant advice to help the people lower their electricity usage by switching off appliances, which frees up some capacity on the grid. For now, BI tools from SAS and Oracle monitor usage and compares this with historical data. In the future, SAP's HANA in-memory database may play a role in helping to keep the lights on in South Africa.
To date, he has embarked on an IT reorganisations from a decentralised department to one that can can benefit from economies of scale. He is upgrading legacy systems such as a company-wide migration of Windows XP to Windows 7 and Windows 8. He has also consolidated five SAP systems into one, affecting over 33,000 users.
Eskom's IT department is large. It has a budget of about £480m and employs 2,000 IT professionals who support 11,000 applications. IT manages 3Tb of storage and keeps 200 million transactions running.
Laher says: “We were a poor IT department.”
A Deloitte security audit highlighted liabilities in the security architecture and procedures IT managed. However he says that within 18 months, IT Eskom will move from being regarded as a cost centre to being a strategic business partner.
“We have stabilised IT, and as a result we have had no outages in the last 12 months,” Laher says. There is now no single point of failure..
Getting to the top-left quadrant, where IT becomes strategic to the business, has involved a 16-month IT powered business transformation. This was completed in October 2011. Implemented by Accenture, the SAP roll-out is using a non-customised single instance of SAP to cover the entire business value chain, Laher explains.
“We replaced Baan and Oracle in subsidiaries and we now using one version of SAP,” he says.
He says release two of the SAP project will extend the use of SAP and automate more business processes. The project will include upgrading SAP Business Warehouse in Q3 2013 and Business Objects. It will also see SAP power the outage maintenance operations part of the business. He plans to scan in paper-based schematics of power plant and distribution equipment and provide 2D and 3D tools which engineers will access from a tablet device. As part of project, SAP Mobile will be rolled out to 16,000 users..
Engineering is another area of the business where Laher believes IT can make a difference.
He says: “The engineering teams use their own tools. We need to work together and collaborate more efficiently.”
This will involve standardising on SAP and using SharePoint for collaboration.
With these projects, Laher hopes IT will move to the top right of his Gartner Quadrant, and become a strategic enabler for business. It is where IT needs to be to support the business as it moves towards smart metering and battles with the challenges all utilities face: that of balancing supply with demand.