Eskom energizes its business performance with SAP and IBM

Published on 06-Jan-2011

Validated on 05 Jun 2013

"From a strategy point of view, we view infrastructure as a service, to be provided to meet the business needs. The IBM approach is exactly in line with that thinking, simplifying the infrastructure and providing dynamic delivery of the required services to the Eskom business units at reduced costs and better quality." - Sean Maritz, Infrastructure Manager, Eskom

Customer:
Eskom

Industry:
Energy & Utilities

Deployment country:
South Africa

Solution:
IT/infrastructure, Business Integration, Enterprise Resource Planning, Information Integration, Infrastructure Simplification, Optimizing IT, Optimizing IT, Virtualization, Virtualization - Server

IBM Business Partner:
SAP, TCM

Overview

Eskom of South Africa is one of the global top ten utilities, measured by generation capacity. The company generates some 95 percent of electricity used in South Africa, sold to more than 4.3 million customers. Eskom employs 37,857 people, and devotes R823 million ($110 million) to training from total annual revenues of R53.8 billion ($7.2 billion).

Business need:
Eskom wanted to find new ways to streamline processes and cut costs, especially important during times of economic uncertainty. In particular, managing almost 40,000 people and their pay was a demanding task. The complexity of supporting multiple legacy applications and server platforms hindered progress, which was reflected in slow monthly financial consolidation and difficulties in gaining an enterprise-wide view of budget and performance from different business units.

Solution:
Replaced SUN, HP and Dell hardware, operating systems and support contracts and standardized on the IBM Power 595 platform for SAP applications. Consolidated information storage to IBM System Storage DS8100, managed by IBM Tivoli Storage Manager. This replaced server deployments based on each Eskom Business Unit running their own SAP instances on discrete server stacks purchased in separate procurement processes.

Benefits:
Introduction of employee self-service tools has simplified administration and reduced costs by an estimated 15 percent, with accurate data available throughout the business. Month-end reporting, which previously took two months and required at least one FTE, will be cut to 12 days. Single source of transaction and financial data allows management to gain enterprise-wide view of activities. Flexible virtualization technologies on IBM Power 570 allow greater utilization of existing hardware investments, introduce more resilient infrastructure in case of disaster, and reduce capital outlay.

Case Study

Eskom of South Africa is one of the global top ten utilities, measured by generation capacity. The company generates some 95 percent of electricity used in South Africa, sold to more than 4.3 million customers. Eskom employs 37,857 people, and devotes R823 million ($110 million) to training from total annual revenues of R53.8 billion ($7.2 billion).

The company relies on SAP applications to help run this diverse business, from financial controls through to employee payroll and attendance. During times of economic uncertainty, reporting on every aspect of business performance was of increasing importance. In particular, managing 37,857 people and their pay was a demanding task, based on paper processes and on isolated local systems.

Over time, many of Eskom’s SAP and other business systems had been implemented on different hardware platforms. Collecting data from different systems, checking and integrating it before being able to produce meaningful and reliable results, was causing delays and, in some cases, inaccuracies.

Sean Maritz, Infrastructure Manager, comments, “We wanted to speed up our reporting, which meant increasing information flow and improving accuracy. It was clear that SAP applications had the ability to provide the business information we needed, from core commercial operations through to human resource management. Once we had decided to implement SAP solutions, we turned to the choice of hardware platform. We wanted infrastructure that would provide a long-term solution for a growing business, able to respond to changing workload at competitive commercial terms.

“IBM Power 595 servers combined with IBM System Storage offer us a flexible, powerful and integrated platform that is ideally suited to running large, centralized SAP solutions. Using this powerful combination, Eskom has cut financial reporting times from two months to twelve days, enabling an enterprise-wide view of operations that was simply not possible before.”

Current applications
Questions over legacy applications’ ability to handle the so-called Y2K problem had prompted Eskom to review ERP solutions, leading to the selection of SAP applications. The close business fit between the core business applications within the SAP for Utilities offering allowed Eskom to establish a cost-effective, standardized business solution across all the operating units. From that point, the SAP landscape has gradually grown to replace legacy applications for its core commercial processes, including solutions such as finance, materials management, plant maintenance, and latterly SAP ERP Human Capital Management.

The first versions of the SAP software were implemented on a location-by-location basis, and group-wide reporting was managed by manual consolidation and analysis.

“We had collected an array of Sun, HP and other systems, often bought as a result of hardware-only RFPs in a drive to reduce acquisition costs,” says Sean Maritz. “As Eskom’s business needs changed and grew, migrating the SAP applications from one server brand to another was difficult and relatively risky, and it was clear that a change in thinking was needed.”

Switch on the power
Faced with the costs and complexity of the mixed platforms, the Eskom team reviewed both its acquisition policies and infrastructure strategy. Working with its technology business partner, TCM of South Africa, Eskom planned to standardize on one platform for the SAP landscape.

The initial aim was to make it easier to migrate applications to more powerful servers as the workload grew. Developing the logical argument, TCM made the case to use virtualization to allow several applications to run on each physical system, and allocate resources according to business requirements rather than move applications to other servers – reducing the business risk.

Eskom originally implemented two IBM Power 595 servers at its primary data center, and a single Power 595 at a secondary center. This footprint was subsequently expanded with an additional server at each location. TCM provided implementation, configuration and commissioning as well as ongoing support and maintenance contracts.

Eskom has divided its production servers into multiple logical partitions (LPARs), in effect providing more than 20 separate virtual servers for the SAP applications. For example, several instances of SAP ERP Human Capital Management run on each server, allocated a share of the total processors available. If the workload increases, then additional CPU resources can be allocated as required. Additionally, resources, such as additional memory or CPU, can be added to virtual servers during production, with no service interruption.

The second data center acts as a backup and disaster recovery solution, with the servers divided into multiple LPARs reflecting the production servers’ LPARs. Less important applications are assigned a restricted CPU total, and business-critical applications continue without interruption. This functionality is provided by IBM’s virtualization, Virtual IO and dynamic LPAR functionality, providing almost instantaneous, hands off allocation of Disaster recovery partitions to systems that require them. For the duration of the Disaster, non production partitions are scaled back, in line with business rules defined as part of the system scoping exercise. IBM, IBM Business Partner TCM and ESKOM Corporate IT worked closely with ESKOM’s Audit division, to ensure that the DR profiles and functionally match and satisfy the Corporate DR standards.

Sudash Raghubir, Infrastructure Advisor, remarks, “Running applications on a one-per-server basis tends to encourage you to buy over-size equipment to allow for expansion, which absorbs capital. With limited headroom on each physical machine, realistically you are only able to plan a year in advance.

“With virtualization on the IBM Power platform, we can consider the total compute capacity, and reassign resources or even shift applications within the existing physical estate at no risk. This gives us a planning horizon of around five years, with much lower need to refresh the physical infrastructure and hence reduced capital expenditure. With this IT Simplification solution from IBM, we can achieve much more with a more compact and efficient infrastructure.”

Sean Maritz explains: “The IBM Power 595 platform offers virtualization capabilities and resilience that we could not obtain on other systems. For Eskom, this ensures continued operations for business-critical applications at commercially attractive rates.”

Eskom has deployed IBM System Storage DS8100 systems for information storage, with 23.2TB and 35TB at the production and backup sites, respectively.

Sean Maritz explains: “The DS8100 provides reliable, centralized storage that removes the need for costly and inefficient direct-attached disks. The business benefit is simpler administration, and lower costs per gigabyte.”

Next generation capabilities
Eskom is migrating its four principal SAP instances from legacy systems to a single, centralized Platform on IBM Power 595. This approach reduces complexity, eliminates the slow, manual data collection and consolidation process, and cuts the likelihood of errors when preparing monthly and annual reports.

Additionally, the IBM Power platform allows Eskom to introduce new and expand its SAP solutions exactly as the business requires, without the business risk of migrating from server to server. Existing CPU capacity can be allocated according to need, or total CPU capacity can be increased on the Power 595 servers.

Sean Maritz explains: “The Human Capital Management capabilities are already proving a great success, and, using SAP NetWeaver Portal, employees can now access essential payroll, time and attendance, training and other information, wherever they are.”

Make the right connections
In planning its strategic move to the IBM Power platform, Eskom reviewed the hardware capabilities, the long-term roadmap for the technology, and the business assistance available from possible vendors.

Sudash Raghubir comments, “The can-do attitude demonstrated by IBM was very important, showing us a positive willingness to assist. TCM provided the local technical support and implementation services, backed by the global resources available through the IBM connection.”

The flexible IT landscape based on the virtualization capabilities of the IBM Power platform reduces the effort and downtime associated with re-allocating applications across different servers. The disaster recovery resources can also be used for development and quality assurance, providing a 70 percent reduction in the size of the “non-production” footprint with associated reduction in floor space, power, cooling and depreciation costs.

Automation of disaster recovery provisioning provides “hands off” capability, replacing a manual process that had a 96-hour recovery time with a solution that now has an “instant on” capability. Virtualization allows rapid provision of development and quality assurance resources On Demand, and reduces lead time on development and quality assurance projects by up to six months, providing quicker response to business requirements,

Sean Maritz concludes, “From a strategy point of view, we view infrastructure as a service, to be provided to meet the business needs. The IBM approach is exactly in line with that thinking, simplifying the infrastructure and providing dynamic delivery of the required services to the Eskom business units at reduced costs and better quality. At Eskom we are confident that we chose the right platform in IBM to support our SAP solutions.”

Products and services used

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

Hardware:
Power 595, Power Systems, System p: Power 595

Software:
AIX, Tivoli Storage Manager

Operating system:
AIX

Service:
IBM-SAP Alliance

Legal Information

IBM Deutschland GmbH D-70548 Stuttgart ibm.com/solutions/sap IBM, the IBM logo, and ibm.com are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at http://www.ibm.com/legal/copytrade.shtml Intel, the Intel logo, Intel Xeon and the Intel Xeon logo are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. UNIX is a registered trademark of The Open Group in the United States and other countries. Linux is a trademark of Linus Torvalds in the United States, other countries, or both. Microsoft, Windows, Windows NT, and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries, or both. Other company, product or service names may be trademarks, or service marks of others. This case study illustrates how one IBM customer uses IBM and/or IBM Business Partner technologies/services. Many factors have contributed to the results and benefits described. IBM does not guarantee comparable results. All information contained herein was provided by the featured customer and/or IBM Business Partner. IBM does not attest to its accuracy. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. This publication is for general guidance only. Photographs may show design models. © Copyright IBM Corp. 2011. All rights reserved.