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UK gas distributor Northern Gas Networks is currently migrating to SAP’s next generation enterprise resource planning (ERP) system S/4HANA, as it looks towards cutting edge internet of things (IoT) use cases.

Northern Gas Networks has been an SAP shop since its inception in 2005, when the National Grid sold off the 37,000 kilometres of pipe north of Sheffield. It now serves gas to 6.7 million customers. The company is currently one month into a full migration from ECC 6.0 to S/4HANA, which it hopes to complete by the end of the year.

Speaking to Computerworld UK at SAP's annual Sapphire conference in Orlando, Florida, Tom Pollock, head of information management at Northern Gas Networks said the business case for migrating to S/4HANA was “built on having our data mastered in one place and really mapped so we know the full data flow from input to visualisation”.

This will form “the foundation that allows us to go into IoT and look seriously at [SAP] Leonardo”, Pollock said. “It is not something we would want to do until we have got the foundation right, because you can’t go to systems of intelligence until your systems of record are sorted out. So we can go to IoT at an enterprise level, not an individual use case level.”

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Pollock is already eyeing IoT use cases from pressure management to network analysis. Pollock said the company will be able to start doing “scenario testing for bringing a factory online and see if the network can handle that. We can start to sweat the predictive analytics for emergency services to be out before you even called us because we knew that escape was going to happen. We can look at predictive maintenance for our assets”.

The company has already run IoT pilots and will have to look at a wide scale sensor deployment if it is to run enterprise scale IoT.

S/4HANA migration

Once it has migrated, Northern Gas Networks will be running S/4HANA, SuccessFactors for HR, SAP Digital Boardroom and BusinessObjects cloud for analytics.

The company currently has 150 systems of record, according to Pollock, as well as a jaw dropping 7 million spreadsheets. “Data is widely dispersed, sometimes unsupported and certainly unstructured in the worst possible way”, across the organisation, he said.

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One improvement Pollock is eyeing immediately is automating its regulatory reporting cycle using S/4HANA. Currently the company reports its regulatory recording pack (RRP) to the UK regulator Ofgem via a massive spreadsheet which takes “a small army of people three months” to produce.

Having all of its data in S/4HANA means Northern Gas Networks could eventually give Ofgem “real-time access to our data at all times. It is a great way to build a relationship with the regulator”, Pollock said. This would be done through a dashboard within the SAP Digital Boardroom app, which Pollock calls the Digital Operations Room.

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Pollock sees digital as a way to maximise profits at the company because it is naturally limited by its geographic customer base. “The only way that we can maximise the return to our shareholders is via cost savings,” he said. “So that is where we really have to focus our energies and that is where digital comes in. We see that as a real differentiator for how we can be more efficient, how we can run our network and be more customer focused.”

Change management

Pollock admits that change management continues to be a huge part of the migration to S/4HANA as “we are asking people who are very used to doing things one way to change that and work in a different way and that is unsettling, it can be quite worrying.

“People immediately think about job security. So that is a challenge because yes there are efficiencies that we have to make and that will be around process efficiencies, but what we are looking at is the value add. Getting people out of the drudgery of data wrangling as they are now and more towards data analytics and using our data to move the business forward.”