Hana-hana-hana: No it's not your dad trying to start a motorboat... It's Northern Gas, renewing its SAP software
- Reference: 1587375726
- News link: https://www.theregister.co.uk/2020/04/20/northern_gas_networks_sap_contract/
- Source link:
NGN, a private sector company that is regulated under public procurement, has just [1]awarded SAP a contract worth £5,985,385.60 over five years. (We'd love to have been in the room when they were fighting over the last 60p.)
The company delivers gas to 2.7 million homes and businesses in the North East, Northern Cumbria and much of Yorkshire through a vast network of underground pipes. It has total revenue of £409m and assets worth £2.1bn.
NGN pretty much had to go with SAP once more. The tender notice says: "Without this renewal, NGN will lose access to key critical business applications like SuccessFactors… The optimal approach is to continue using SAP products, as the alternative would be a re-implementation of new technology, infrastructure and middleware, plus integration with our back end ERP... the development of these apps, along with the integration into ERP has taken over 2 years."
It's perhaps understandable NGN wants to stick rather than twist as it has "invested heavily in SAP Hana and licences to optimise its ability to capture regulatory and non-regulatory data via on-premise/cloud software and applications".
Furthermore, NGN "intend[s] to extend the agreement with SAP and expand the scope of their SAP licensing model" to meet strategic objectives.
But despite this expansion in SAP licence spending, the gas network believes it can save money overall. Efficiencies through SAP include "information reporting and processing" that it said "are now dramatically quicker. For example, payroll has reduced from six hours to five minutes, and outstanding escape reports can be accessed in real-time, whereas previously, it would take eight hours," according to NGN's [2]2021-2026 Business Plan [PDF] published earlier this year.
Meanwhile, standardised, simplified processes across the business have removed manual processing of information, NGN added.
NGN's Business Plan also states IT operating costs have fallen from a high of £12.2m to £6.6m, a reduction of 45 per cent. Overall, it expects IT and telecoms spend to fall from an average of £8.6m over the last six years to £7.2 million in 2021/22.
NGN's software investments include Ariba, Concur, SuccessFactors, and Analytics Cloud from SAP but it also runs also OpenText content management and Microsoft Office 365 applications. Its SCADA control systems run on AWS' public cloud.
The gas infrastructure company now plans to use its SAP S4/HANA platform for more access to real-time data, artificial intelligence, automation, Internet of Things and predictive analytics, according to its five-year plan. NGN began migrating from ECC 6.0 to SAP S4/HANA in 2017 and has been running SAP since 2005.
Our only consolation maybe that Sod's Law of megaprojects will eventually kick in and what can go wrong will go wrong. Watch this space. ®
Sponsored: [3]How To Accelerate Brilliant Digital Experiences With Low-Code
[1] https://ted.europa.eu/udl?uri=TED:NOTICE:178994-2020:TEXT:EN:HTML&src=0
[2] https://www.northerngasnetworks.co.uk/wp-content/uploads/2019/12/NGN-RIIO-GD2-Business-Plan-2021-2026.pdf
[3] https://go.theregister.co.uk/tl/1936/-8552/how-to-accelerate-brilliant-digital-experiences-with-low-code?td=wptl1936
...worth £5,985,385.60 over five years.
I'm betting 7m euro-washers using the exchange rate applicable on SAPs internal systems at the time the contract was drawn up.
who on earth uses exchange rates with 7 significant digits?!
SCADA In the Cloud? You Cannot be Serious
I'm absolutely gobsmacked that they've pushed SCADA Off Premises. Some of the valves etc are very old and have literally zero security features. If you can connect to the valve through an RS232 port you can do anything you want to. Hopefully no one has felt the need to attach an insecure comms device to these. Even if the comms is secure the idea of someone hacking into the control system is quite terrifying.
These systems are usually on a private network air-gapped from the internet for a reason! With an IT spend of 8 million and over 1 million of that being on SAP licences I wounder just how much they spend on security and how experienced their in house team is.
Re: SCADA In the Cloud? You Cannot be Serious
experienced teams are expensive, so they replaced them with the bosses kids friends sisters cousin who made a youtube video once.
payroll has reduced from six hours to five minutes - really?
Extolling the virtues of their self imposed SAP lock-in they said that "payroll has reduced from six hours to five minutes". I cannot see how SAP would do this. Even if their payroll was run on a 1980's PC running MSDOS, this sort of "improvement" exposes some other problems in their systems.
It is easy to see why SAP consultants are amongst the highest paid; it's a job for life!
Re: payroll has reduced from six hours to five minutes - really?
I'm not sure how that's a saving anyway Is the computer processing wages for 6 hours so desperately needed for other tasks that the time saving is really valuable? Or are they not quite explaining all the fine detail here and when they say "payroll", implying the entire payroll takes 6 hours, they actually mean payroll per department or payroll per person takes 6 hours, and now that is what is reduced to 5 minutes?
"NGN will lose access to key critical business applications like SuccessFactors"
Still not seeing what the problem is.
"a contract worth £5,985,385.60 over five years"
That is the projected cost. Given that it's SAP, there will be an orbital drift and the final cost will differ by an amount no less than equal to the initial cost, plus interest.
Sod's Law ? It's going to have a field day with this one.