10 Questions for selecting a CIS / MDM solution. By Thibaut Vos. Copyright 2012 Ferranti Computer Systems. All rights reserved

Whitepaper 10 Questions for selecting a CIS / MDM solution By Thibaut Vos Copyright 2012 Ferranti Computer Systems. All rights reserved

3 1 Can the system cope with changing business processes and legislation? The energy and utilities market is undergoing constant change. Market liberalization, smart metering rollouts, legislation like the 20-20-20 targets and e-mobility are only some of the waves with which this industry has to cope. When selecting the business support system for your core processes, an important factor to consider is flexibility. What if you ve carefully selected and implemented a system, which needs extensive re-work and development as soon as the first change in your processes occurs (due to new regulations, or even just to make the process more efficient)? What if your organization decides to take on a new part of the market by, for example, moving from B2C only toward a combined B2C and B2B offering? In this dynamically changing marketplace, an energy and utility company should not be limited by the inflexibility of its CIS/MDM-system. When selecting the system of your preference, keep in mind how changes need to happen in the system and what costs are associated with them. MECOMS is designed with this flexibility as one of the most important factors. The system guided many utility companies through the liberalization wave in the early 2000s and focusses on configuration, rather than development to model business processes. Secondly, MECOMS integrates all processes related to CIS (customer information system), MDM (meter data management) and EAM (enterprise asset management) in one system. Yet, the customer is not forced to purchase all modules, as the system itself, as well as the pricing structure is setup in a modular fashion. The system can be implemented to serve all business processes (including multi-commodity meter-tocash cycles) but can also be integrated with legacy systems, to empower a smaller part of your business. About the author Thibaut Vos is Marketing Manager for MECOMS and has a background in the architecture of complex IT systems. He has worked for Cisco and co-founded fifthplay, a pioneering provider of Home Energy Management solutions. thibaut.vos@ferranti.be T: +32 3 5404760

4 2 How does the system structure your data? Utilities don t operate in a vacuum, integration between different market players is usually one of the requirements. Secondly, internal integration with different back-office systems is also quite common, which needs to be facilitated through standard interfaces and web services. To facilitate these integrations, a well-documented and well-structured data-model is key. Whether you are integrating internally or externally, or are performing data migration between different systems, it is important to know where your data is or will be stored, in which manner, and know that there is only one version of the truth (no data duplication). This is especially important when your data resides in multiple systems: it needs to be clear who is the master owner of the data, and who (or which application) can make changes to this data. Lastly, when all data is securely stored in the system in a well-defined data model, access and insight to your data is even more important. Analysis of your data will give you the necessary information to streamline your business even more, and discover new opportunities in your portfolio. With MECOMS, all data (CIS, MDM and EAM) is integrated in one system, and stored in the EUCA data model. This model, which has been designed exclusively for the energy and utility sector, is 100% documented, does not duplicate data across multiple databases, and is the central repository for all business processes executed in MECOMS. Secondly, the data in the model is accessible through standard connectors, which allow MECOMS to serve as a data hub for other applications, both internal as well as externally through the use of the flexible messaging framework. All important data entities in the system use the concept of time slicing, allowing the user to reproduce a specific situation in time, showing all changes which happened with this object, allowing detailed auditing of the data in the system. Being based on Microsoft Dynamics AX, MECOMS can use all the standard BI (business intelligence) tools available for the Microsoft Stack. This allows customers to make the important step from data towards information, which gives them a tremendous competitive advantage.

5 3 Is it a proven solution? The decision of which ERP-system to select for your business, is not to be taken lightly. The implementation of such a system will typically take multiple months, or even years and touches all aspects of your business. Secondly, a fairly significant investment budget is linked to these decisions, so one of the most important factors to take into account is the trustworthiness of the solution in the market. When selecting a system, keep in mind how it is perceived by independent analysts in their yearly reports. Companies such as Gartner, IDC and Ovum are renowned for their industry-specific knowledge and research, providing a metric for how proven the solution and company is in the energy and utilities market. Combining this with customer references will provide a good view of the position of the solution in today s energy and utilities market. Besides the view of analysts on the product, utilities should also ask themselves how reliable the company is behind the product. Having a great product is one thing, but if the company is not solid, the long term support of your carefully selected product might be at risk. Factors which one might take into consideration to assess the stability and trustworthiness of the company are partnerships, industry awards, customer references and company profiles by independent analysts. In May 2012, IDC Energy Insights published its latest IDC MarketScape vendor assessment for the CIS market, evaluating the major vendors of CIS solutions against 32 criteria, covering both strategies and capabilities. Out of thirteen solutions included in the report, only MECOMS, Oracle and SAP were placed into the Leaders category. Apart from the product itself, IDC Energy Insights especially acknowledged MECOMS for its forward-looking deployment strategy, transparent pricing model and execution capabilities. Gartner, in their latest CIS Magic Quadrant: MECOMS has a lower total cost of ownership compared with leading CIS products, which positively affects the overall customer cost to serve. Furthermore, Gartner praises the global delivery channels and the leveraging of Microsoft Dynamics AX to offer an integrated CIS, MDM and ERP platform. In its most recent Meter Data Management (MDM) Solution Guide, Ovum expects that MECOMS will continue to gain traction in the market, and recommends its clients to consider it as an MDM solution. MECOMS components are pre-integrated, so integration costs should be lower than those of many alternatives. With a number of high-profile partners, Ferranti is well positioned to build on its presence in the utilities industry. Besides the recognition MECOMS is receiving from independent industry analysts, the relationship with Microsoft is also a proof of the maturity of the solution. Ferranti is Microsoft s only Global ISV for the energy and utilities market, making it the worldwide go-to-solution for utilities. Next to this partnership, Ferranti has also received numerous awards, including Partner of the Year and ISV of the year for Western Europe. In 2011, MECOMS and Dynamics AX were implemented at Rao Holding in Russia, being the biggest AX implementation in the quarter for Microsoft. MECOMS empowers the meter-tocash cycle for more than 2,5 million customers with more than 3000 concurrent users.

6 4 How mature is the partner channel? The quality of an ERP-project is directly linked with the maturity of the company responsible for the customizations and implementation of the system. In case the selected system is implemented through a channel of implementation partners, it is advisable to check the trustworthiness and maturity of these partners. How many successful references do they have and how experienced are they with the utility business. Equally important to consider is the availability of multiple partners, being capable of implementing the product, to avoid vendor lock-in. The MECOMS Partner Network combines the product of Ferranti with the local market knowledge of its partners. Each MECOMS Partner has passed a rigorous training and certification programme. This ensures that partners have the necessary knowledge about the energy and utilities market, the MECOMS product and the Microsoft technology associated with it. MECOMS partners include well known industry names such as Accenture/Avanade, Logica, GMCS, NCS and Praxis.

7 5 Does your organization have the IT resources to support an on-premise installation? Running an ERP-solution always has an IT-related part to it. In a simplified way, there are two routes to consider: running the application on-premise, or choosing for external hosting. Opting for the on-premise installation, creates new questions which need to be answered. Will the installation run on a virtual platform, the so-called private cloud model, or on dedicated hardware for each functional block? Does your organization have the required resources and knowledge to support such an ICT environment? How will you monitor this environment with regards to uptime, performance etc.? When choosing not to host the infrastructure on-premise, there are also different routes to consider. The classic way of outsourcing to a traditional datacenter, whether virtualized or running on dedicated hardware, still requires people managing your environment. This can be outsourced to other parties, who will monitor and manage your ERP-environment, as in a traditional IT-outsourcing model. MECOMS supports different ways of installation: on-premise, private cloud, or even fully outsourced in a BPO model. When running MECOMS on-premise, the out-of-the-box product contains management features combined in the MECOMS Management Pack. Through these mechanisms, the IT-staff can continuously monitor the state and performance of the complete Microsoft Dynamics AX and MECOMS stack, allowing optimal usage of resources. MECOMS is also used in complete BPO models, where part of the business is fully outsourced to a third-party. Due to the flexible ways of interacting with the MECOMS system (thick client, terminal services, SharePoint portal) different types of users can work on the same system, without having to worry where the system is physically located, or how it is implemented. A more drastic way of outsourcing the ERP-solution, is the BPO (business process outsourcing) model, where one does not only outsource the IT-infrastructure required for running the solution, but also outsources (a part of) the business around the application, i.e. the full operations of a call center. In this model, ownership and security of data is obviously an important factor to consider.

8 6 What is the true cost of the ERP solution? When a utility company issues an RFP to select an ERP solution, several aspects of the product and the implementation of that product are studied. This will provide an accurate view on the Capital Expenditures (CAPEX) required to have the product up and running according to the business processes detailed in the RFP. This is only part of the equation: besides the costs associated with implementing the product (which might also be higher than expected due to change requests not foreseen in the initial scope), a large part of the cost of the ERP solution are the Operational Expenditures (OPEX). The OPEX can be split up in two large parts: the part related to the normal business operation such as IT costs, maintenance licensing and system administrators, and secondly the part related to changes which are implied by changes in business processes. This second part of OPEX costs is a very important factor to take into consideration when selecting a solution, as it might be very expensive to introduce changes to the implemented product (or worst case: even be impossible to implement). A typical MECOMS project can be split up in three parts: presales phase, project phase and operations. In the pre-sales phase, typically an RFP-answer is provided to the customer, detailing how and for which (fixed) price the solution will be implemented according to the business processes of the customer. In more complex projects, Ferranti starts with a mini-project called diagnostic to assess the customers business processes more in depth, to provide the customer with an accurate view how MECOMS will fit in their landscape, and what changes might be advisable based on best practices in MECOMS. The project phase will start the actual implementation, using the MECOMS Sure Step project methodology, defining process phases, milestones roles, artifacts, cross-phase-processes and additional project management processes. The last phase, which is open-ended, is the normal operations of the solution. Due to the familiar look-and-feel of MECOMS (related to the Microsoft solution stack) and the efficient way of handling business processes, the OPEX is lower than competing products with respect to the number of people required to execute processes. But even more importantly, as your business is undergoing constant change, MECOMS offers unprecedented flexibility to cope with changes in business process. Rather than requiring additional development to introduce changes, MECOMS focusses on configuration of the system. This will provide a tremendous gain in flexibility, providing you a competitive advantage.

9 7 What are the training requirements? A system is useless without people being empowered to use it to its full potential. This is often the problem with bespoke software, where the product might fit the business processes of the customer, but because the project was specifically created for one customer, there is no documentation and training material available. Mature products typically have this information accessible; however, another factor to consider is the amount of training an end-user needs to undergo before being able to execute processes. Since this effort needs to be replicated across the complete user base (which might easily span +100 people in large projects) it might form a large part of the implementation costs. MECOMS is based on Microsoft Dynamics AX, and uses the typical Microsoft user interface, familiar to users of Microsoft Word, Excel and Outlook. The general ERP-processes are covered using standard AX functionality, and therefore users can leverage the vast amount of learning material available from Microsoft. For MECOMS specific training, Ferranti has created the MECOMS University. MECOMS University offers training and certification to partners and end-customers. Six training tracks are available, ranging from Sales Professional to Professional Developer. Trainees can certify themselves by successfully passing exams. Trainings are given by dedicated Microsoft Certified Trainers in classrooms in Belgium or India.

10 8 Will the product match my business out of the box? The level of coverage between the out-of-the-box product and your business model will be one of the main drivers for the cost of implementation. If the complete product needs to be customized or developed towards your business (like in bespoke development or non-utility focused ERP-solutions), the cost of implementing this solution, but also supporting the solution after go-live will be enormous. When selecting an ERP-solution for your utility business, be sure to assess the vertical expertise of your partner and/ or solution provider, to ensure the right knowledge and stability is present to successfully implement and support your project. MECOMS is the result of more than 35 years of experience in the utility sector. With offices and a network of certified partners across the globe, Ferranti offers worldwide capabilities for successful, on-time implementations with outstanding training and support. The product is targeted specifically towards energy and utility companies, and seamlessly combines CIS, EAM and MDM functionality. The system is highly configurable to match your business processes, but comes with a multitude of best practices available in the out-of-the-box product, which will provide benefits in a greenfield implementation.

11 9 How future proof is the solution? Implementing a utility ERP system that fits your current needs is one thing. But making sure the solution is futureproof, taking into account the changes which are inevitably coming your way, such as smart-metering, smart-grid, demand response and energy consumerization, is an equally important factor to consider. The changes the energy and utilities sector is likely to undergo in the next decade will incur massive changes to your business, both from a business process point of view as well as the technology supporting your business. The amounts of data coming from a large roll-out of smart meters, combined with critical peak pricing and time-ofuse rates, will require a business support system capable of handling a multitude of processing cycles compared to the current systems. When investing in an IT system, make sure the system is either already capable of handling these volumes, or there is a clear roadmap and upgrade path towards these scenarios. MECOMS has always been at the forefront of innovation and efficiency, with management-by-exception and instant-processing features. But with the new release of MECOMS 2012 2.0, Ferranti raises the bar in utility Meter Data Management. By optimizing the Smart Metering Communication Bus (SMCB) and analyzing incoming meter data in real-time and in-memory, combining it with the latest technologies in large data storage, MECOMS 2012 2.0 is ready for large smart metering roll-outs ensuring your investment in technology is future-proof in this rapidly changing market.

12 10 Is the user interface easy and consistent? Offering one-size-fits-all for all roles and types of users is no longer a satisfactory option. Users expect different ways to interact with a system, depending on their location, connectivity requirements etc. Offering these different interaction channels should not impose different user experiences and replication of data across multiple systems. The user interface should be as familiar to users as possible, ideally using the same look-and-feel that people are experienced with executing other tasks in their daily routine. MECOMS offers multiple ways of interacting with the system: thick client, thin client through Citrix or Terminal services, SharePoint interface and even a mobile application. However, as all user interfaces are based on Microsoft Dynamics AX, which uses the same look-and-feel and interaction designs as familiar Office components such as Microsoft Word and Outlook, the user requires hardly any training to be able to use MECOMS. Secondly, when a user wants to export specific data for further analysis, he can export data towards Microsoft Excel or other familiar Microsoft tools. Utility customers can access the system through an out-of-the box Utility portal, offering them a real-time view on their data without data duplication in the system.

13 Conclusion Ask the right questions Every organization is unique and no solution fits the needs of every utility company. However, these 10 questions should be considered for choosing a solution, for any company. We consider MECOMS to be the right solution for many situations, and are eager to elaborate on our answers to these questions and any other questuions you might have. We invite you to take a look at www.mecoms.com and get in touch with us to discuss your challenges and questions.

Global contact info@mecoms.com www.mecoms.com Antwerp, Belgium info@mecoms.be Oberhausen, Germany info@mecoms.de Gurgaon, India info@mecoms.in Singapore, Singapore info@mecoms.com.sg Amsterdam, The Netherlands info@mecoms.nl London, United Kingdom info@mecoms.co.uk 10 Questions whitepaper V1.0 2012 Ferranti Computer Systems NV, all rights reserved. MECOMS is a trademark of Ferranti Computer Systems NV. Microsoft and Microsoft Dynamics AX are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.