Bluewater Power prepares for smart metering with SAP and IBM solutions

Published on 09-Sep-2010

Validated on 05 Jun 2013

"The XIV Storage System offers greater total capacity at significantly lower overhead, which in our view represents typical excellence from IBM. SAP BusinessObjects and XIV give us a very flexible foundation, helping us to deal with the future’s unknowns." - Keith Broad, Director, Information Technology, Bluewater Power

Customer:
Bluewater Power

Industry:
Energy & Utilities

Deployment country:
Canada

Solution:
IT/infrastructure, BA - Business Intelligence, Business Resiliency, Customer Relationship Management, Enabling Business Flexibility, Energy Efficiency, Enterprise Resource Planning, Information Integration, Optimizing IT, Optimizing IT

IBM Business Partner:
SAP

Overview

Bluewater Power, based in Sarnia, Ontario, Canada, is a medium-sized utility company, which provides water and electricity to commercial, industrial, and residential consumers in Southwestern Ontario. Created from a merger of several public electricity distribution companies in 2000, Bluewater employs around 100 people, serving some 35,000 customers in total.

Business need:
Bluewater Power faced three business challenges: new regulations in the energy sector, stricter financial reporting standards, and a mandate to implement smart meters for electrical power. Legislative changes would impact the finance department with new reporting standards. Roles would be created and eliminated, and in combination these changes would produce change in the way the business operates. Existing business systems at Bluewater were unable to cope with the scale and pace of change.

Solution:
The company implemented a suite of SAP ERP applications, including SAP Customer Relationship Management, SAP BusinessObjects, SAP NetWeaver and SAP Utility Customer e-Services (UCES), on IBM System x3650 M2 servers with Intel® Xeon Processor 5500 series processors, using VMware ESX Enterprise virtualization. Bluewater Power also deployed IBM XIV Storage Systems for data storage and management, with IBM Tivoli Storage Manager to handle backup, archive and retrieval services.

Benefits:
Bluewater Power gains a highly resilient, flexible information infrastructure that aptly addresses current and changing power distribution challenges. Smart meters send detailed hourly interval data for analysis by Bluewater, which packages customers’ hour-by-hour power consumption into bucketed time of use bills. Reduced storage provisioning and management time by 60 to 70 percent, cut physical rack space demand by 50 percent, and avoided hiring one additional IT full-time employee.

Case Study

Bluewater Power, based in Sarnia, Ontario, Canada, is a medium-sized utility company, which provides water and electricity to commercial, industrial, and residential consumers in Southwestern Ontario. Created from a merger of several public electricity distribution companies in 2000, Bluewater employs around 100 people, serving some 35,000 customers in total.

Bluewater faces three immediate business challenges: the mandated introduction of smart metering in Ontario, regulatory changes, and new financial reporting requirements such as Canadian General Accepted Accounting Policies and International Financial Reporting Standards.

Keith Broad, Director, Information Technology, explains: “In reality, we looked at our systems and realized we could not meet any of those needs. We needed a solution that could adapt to rapidly changing business conditions such as smart metering and provide more flexible reporting capabilities, both for regulatory and financial reasons.

“Our assessment was that a combination of SAP ERP applications for general business management and SAP Customer Relationship Management would be the first step, and looking over the horizon we wanted to introduce a business intelligence strategy.

“This prompted a review of our datacenter – did we have the right infrastructure and was it capable of meeting our needs? Ultimately this led to a decision for an integrated suite of SAP software, IBM System x servers and an IBM XIV Storage System. In combination, the SAP applications and IBM infrastructure gives us the capacity, flexibility and scalability needed to meet the three enormous challenges facing the business.”

Adapting to change
Smart metering represents the single largest change to power distribution in Ontario. Smart meters allow consumption charges to be varied according to the time of use (TOU), in hourly increments. Mandated by the Ontario Government, smart meters are due to be installed in all consumer premises by the end of 2010, and time of use billing must go live by summer 2011.

The project involves the creation of the Automated Metering Infrastructure (AMI), a framework that will connect millions of Ontario consumers to utility companies in a standardized fashion. The AMI will store collected hourly interval data in a single central Meter Data Management repository. Accessing this repository data will allow Bluewater Power to deliver monthly itemized time of use (TOU) invoices to consumers.

For Bluewater, the data generated by smart metering represents both a challenge and an opportunity – huge increases in volumes and transactions, combined with greater insight into customer behavior. Ultimately, with differential pricing varying according to demand, Bluewater expects consumers to alter their energy consumption patterns, as higher rates charged at peak times will tend to shift demand to other lower-priced times of the day, when more capacity is available.

Bluewater’s opportunity is to use the AMI and Smart Grid networks to develop better service offerings to its customers, and to optimize business processes, enabled by recording and analyzing the new stream of data.

“We reviewed existing systems and concluded that while we could probably add the necessary functionality through customization, our long-term strategy will be to standardize on SAP for Utilities and SAP Customer Relationship Management. The end result is a move from a fairly small SAP application footprint to a landscape including SAP ERP applications for business management, SAP Customer Relationship Management based on the SAP NetWeaver foundation to handle all this new data, and SAP BusinessObjects to help us understand and analyze it.”

Bluewater takes the view that SAP Customer Relationship Management (CRM) is easier to use than legacy applications, and will offer greater interactive functionality. For example, the critical ‘move-in move-out’ process when consumers change their residence can be programmed to ensure continuity of service for customers and to help reduce loss of business during the change. New customer sales and sign-up processes can be linked directly to payments and, in the near future, the smart metering infrastructure.

“The aim was to introduce infrastructure and applications that allow us to be more efficient, with greater ease of access to information and better ability to extract information on customers.”

Building the infrastructure
With the SAP strategy in place, Bluewater turned to consider infrastructure implementation.

“Bluewater has been an IBM datacenter customer for a number of years. IBM has enhanced our IT department’s abilities with strong support, based on very good relationships with a strong roadmap and strategy,” says Keith Broad.

Bluewater selected one IBM System x3350 and four IBM System x3650 M2 servers with Intel® Xeon processors, running VMware ESX to provide virtualized environments for the SAP applications. Each VMware virtual server can be allocated processor, memory and network resources to suit the precise workload, ensuring consistent performance and service delivery. The Intel Xeon Processor 5500 series, with new Intel Microarchitecture Nehalem, provides a foundation for Bluewater to achieve greater performance while reducing physical rack space demand by 50 percent when using SAP software – thus cutting operating costs.

This IBM System x server technology features intelligent management that automatically optimizes performance to fit business and application requirements; automated energy efficiency that scales energy usage to the workload to achieve optimal performance/watt and reduce operating costs; and flexible virtualization, that offers best-in-class performance and manageability in virtualized environments.

“We chose the virtualization route as we realized this makes sense for SAP applications in terms of workload flexibility. Additionally, we are able to create virtual servers and SAP instances as test areas much more quickly than provisioning a new physical server, giving us a very efficient way to take the business forward, particularly where we do not yet know how the workload will evolve,” remarks Keith Broad.

“The sheer performance combined with the virtualization technologies enabled by the Intel Xeon Processor 5500 series makes light work of what could otherwise be a significant SAP application workload. We use fewer processors to complete the same throughput, helping to reduce our IT infrastructure costs, physical footprint and energy consumption.”

To store the flood of data, Bluewater selected the IBM XIV Storage System as a virtualized, cost-efficient and low-administration solution.

“IBM XIV gives Bluewater, with our somewhat slim IT department, the capacity for very large workload,” says Keith Broad. “The self-managing features of the XIV allow us to deliver consistently strong SAP performance, with the IT team free to focus on supporting the business development issues. Combined with VMware virtualization, the storage and processor infrastructure provides a solid foundation for a very flexible data and application workload.

“The XIV technology has what I would describe as the ‘IBM engine’ behind it. We looked at other similar storage systems, but these did not have the technical and in-depth backing of IBM. The XIV offering definitely meets our needs today as well as providing opportunities for growth tomorrow.”

The IBM XIV Storage System is a groundbreaking, high-end, open disk system designed to support business requirements for a highly available information infrastructure. XIV removes much of the manual administrative workload through its advanced, automated services and easy management, giving IT professionals the freedom to focus more of their time on strategic activities, such as extracting value from data and supporting requirements.

Bluewater has deployed IBM Tivoli Storage Manager to automate many of its business-as-usual data management tasks, such as backup, archive and retrieval services. With the advent of the individual consumers’ time of use (TOU) data and the analysis potential it offers, Tivoli offers the ability to reduce the manual workload by introducing a very high degree of reliable automation to storage management, both cutting costs and improving overall resilience.

“The improved automation and reliability helped Bluewater avoid hiring one additional IT full-time employee. By reducing storage provisioning and management time by 60 to 70 percent, it enabled us to grow our technology services associated with these business changes through utilizing already available and trained staff,” says Keith Broad.

Moving to SAP applications
Building on the IBM infrastructure, Bluewater chose to migrate to the new SAP ERP applications first, starting with the general ledger component, followed by functional changes and tuning. In the process, Bluewater elected to take advantage of the implementation to standardize on the Unicode character set.

“We did not have to introduce Unicode, and the consequence was clearly increased database table sizes,” says Keith Broad. “However, we believe that Unicode will soon be the standard for enterprise applications – and if this turns out to be the case, avoiding Unicode now would only be delaying the inevitable transition. It could also potentially carry some risk to data in future migrations.”

With the migration to the new SAP applications on the IBM x3650 M2 and XIV Storage System platforms completed, Bluewater started addressing both the current regulatory and financial challenges, and preparing itself for the smart metering project.

“Because we are in a highly evolving, regulated sector, we are often being asked to produce information that has never before been requested. The traditional method of creating ABAP reports is somewhat rigid, with limited ability for users to modify the report parameters. Regulatory changes that require new information also require extensive ABAP modifications that have no future value. And because Bluewater outsourced its report generation to a third-party vendor, these modifications incur a direct dollar cost.

“The SAP BusinessObjects solution removes this wasted cost, by allowing us to generate reports and analysis without the need for extensive custom programming. Of course, this can easily lead to vastly increased demand for storage – and the introduction of Unicode is expected to increase data volumes by 50 percent; the XIV solution helps us contain these costs while allowing us to benefit from the flexibility that SAP BusinessObjects offers.

“The XIV Storage System offers greater total capacity at significantly lower overhead, which in our view represents typical excellence from IBM,” comments Keith Broad. “SAP BusinessObjects and XIV give us a very flexible foundation, helping us to deal with the future’s unknowns.”

Looking to the future
In the long term, smart metering should help to reduce peak-time demand for electricity – which should mean that even as total energy consumption rises, there will be little need to add new generation capacity in Ontario. Avoiding expansion will help to meet one of the Province’s key environmental targets.

“For Bluewater Power, we see a real shift in our ability to understand what is happening with our distribution network, through what we call the ‘smart grid.’ With real-time smart meter data we will be able to use SAP applications to make sense of what is happening to power demand, and this could fundamentally change the way we do business,” says Keith Broad.

“With conventional meters, we have to send out field technicians to handle every disconnection and reconnection, whereas with smart meters, we will be able to handle this remotely, greener and faster. Linked with SAP CRM, we will be able to manage connections, usage and billing more efficiently, handling a larger number of customers within the same administrative overhead.

“Drilling right down to the consumer level, we should even be able to find out when people are stealing power by meter tampering, as their usage pattern will likely be different. We will be able to process vast amounts of information rapidly using the VMware ESX and x3650 M2 server foundation, store and analyze data with the XIV, SAP NetWeaver and SAP CRM combination, and improve and create new customer services.”

Data captured from the smart meters can be analyzed at high speed on the Intel processor-based x3650 M2 servers to help Bluewater develop new packages to meet customers’ hour-by-hour power consumption. These new pricing policies will direct consumers to re-shape their usage away from the peaks, resulting in smoother, somewhat more continuous demand, to allow existing generation capacity to be used more effectively and more efficiently, contributing directly to helping control global CO2 emissions.

Keith Broad concludes: “In short, the SAP, VMware and Intel processor-based solutions from IBM is helping Bluewater to become a more streamlined business, and contributes to the Ontario smart metering and environmental objectives in ways that were simply not possible before.”

Products and services used

IBM products and services that were used in this case study.

Hardware:
Storage: XIV, System x: System x3650 M2

Software:
Tivoli Storage Manager

Service:
IBM-SAP Alliance

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