Severn Trent Water has undertaken a major transformation programme over the past four years. It has set itself the target of becoming the best water and waste company in the UK, driving through the lowest charges and offering the highest services.
CIO Myron Hrycyk has spent the past two years delivering SAP, which is a major component of the programme. At its heart, the programme is built on transforming business processes so that the company can become more efficient and offer its customers the very best services, according to Hrycyk, executive sponsor for the SAP programme.
"We have grasped the opportunity offered by the technology to redesign the way we work, avoiding implementing legacy processes," he says. "Like many other large organisations, we had a great many packages and bespoke software solutions. Implementing SAP allows us to decommission over 100 separate systems. This has the direct effect of reducing IT costs and increasing service reliability."
Hrycyk is well aware of the best and worst industry practices in implementing SAP solutions.
Over the past decade or so, users have found that ERP systems such as SAP can quickly become IT management nightmares. IT departments can run into problems if they excessively modify the system to suit in-house and legacy business processes. Maintaining customised code is a major cost for IT departments, along with the inherent problems of testing when first going live and regression testing of future enhancements to ensure they will work with the existing customised code.
Instead, Severn Trent Water, is using the approach favoured by SAP experts. It is maximising the use of the standard SAP functionality, taking the business to SAP, not the other way around, and only making changes where standard SAP cannot provide the functionality required.
"Our first guiding principle is to implement SAP with as few changes as possible. We have worked extremely hard to keep changes to an absolute minimum," he says. "We were very focussed on costs and kept them under tight control. Any customisation would drive up the costs and introduce risk."
But this strategy does have a drawback. Hrycyk and the programme leadership team have had to work closely with their operational colleagues to help everyone understand the wider benefits of using standard SAP. They had to explain that some processes may be not as efficient as they could be, but other processes and the business function as a whole is improved.
The right partners
Hrycyk chose IBM as the system integrator for the project. "Before we started selection, we established key criteria for the process of evaluating and selecting our integration partners. We spent time really understanding what we wanted from a partner, considering everything from technical capabilities, industry experience and commercial framework, through to the "cultural" fit with us, the last point being a very key factor."
He says Severn Trent selected IBM as the system integrator because it has the right industry knowledge. Hrycyk felt that IBM could proactively drive the project forward and help the company maintain a speedy pace of progress.
Since SAP is integral to the running of the business, Hrycyk felt it was critical that the base technology support and services met the service demands of the company. He chose Wipro because it "demonstrated great competence in its operational delivery capability to maintain and run the core SAP system".
A partnership between Wipro and Sunguard, which was already a strategic technology partner for Severn Trent, has enabled the company to rapidly achieve a stable and competent technical operation directly following go-live, he says.
Right at the outset of the programme Severn Trent Water took the strategic decision to create an internal competency centre to drive continuous improvement and lead future major SAP investments.
Early on in the programme it designed the scope, role and structure of the unit. SAP is interwoven into the processes at Severn Trent and the competency centre provides it with the capability to innovate processes, drive further efficiencies and improve services to its customers.
The competency centre is manned by around 30 staff, and will be supported by third parties as and when the company takes on future large SAP-related programmes.
Myron Hrycyk, CIO at Severn Trent Water, says, "The first phase has only been live for a few months, so it is still early days, but we are already seeing business benefits and improvements in back office services. We anticipate that the fusion of Severn Trent business knowledge, an increasing understanding of SAP and continuous improvement to our ways of working will drive out new business benefits as we go forward."