To drive its global growth, AES wanted to gather insights from its operational and financial data covering over 1,000 legal entities in 17 countries.
AES worked with IBM® Services to build an analytics platform based on SAP solutions—enabling accurate and timely insights into profitability across its worldwide business.
Fasterprocessing for month-end data will enable deeper insights into profitability
Granularreporting helps business analysts drill down to identify growth opportunities
Betterinformed decision-making will drive lower operational costs and greater efficiency
Business challenge story
Targeting global growth
To move towards its goal of becoming the world’s leading sustainable provider of reliable, affordable energy, AES wanted to expand its most profitable business areas. To uncover opportunities for growth, the company needed to provide its decision-makers with accurate, granular insights into financial data across its global organization—but reporting posed complex challenges.
Gogita Gogiberidze, Director—Global Technology Solutions Delivery, Global IT & Governance at AES Corporation, explains: “In the past, each of our businesses had their own approaches to financial reporting, which made rolling up our position at an enterprise level a tough task. At the end of each month, our finance team would have to spend a significant amount of time collating data from across the organization.
“Because there was no enterprise-wide reporting standard, it was extremely difficult to build reports to answer important questions such as: ‘how much are we spending in each part of the business?’, ‘are we obtaining value from our global supplier base?’, and ‘are our business processes cost-effective?’”
AES relies on a suite of SAP® ERP solutions to drive its end-to-end business processes, including management of its power generation and storage assets, accounting and finance operations and human capital resources. To provide analytics insights, the company utilizes the SAP Business Warehouse application.
Alvaro Alegria, Manager at AES Corporation, continues: “We see our SAP solutions as a strategic platform for our future growth. For more than eight years, our SAP solutions have helped us to manage our people, processes and systems effectively. To achieve our goals for enterprise-wide reporting, we realized we needed to accelerate our monthly data and calculation driven processes, and provide our decision-makers with timely information to steer the business.”
Connecting the business
As a next step, AES evaluated its existing analytics infrastructure, and mapped the changes required to transition to a new approach to manage, consolidate and leverage its global business data. The company determined that its existing database for its SAP Business Warehouse application was unable to provide the performance it needed to realize its enterprise-wide reporting vision, and decided to search for a new solution.
“After evaluating in-memory database solutions from a number of vendors, we decided that powering our SAP Business Warehouse application with SAP HANA would provide the rapid reporting capabilities we needed,” recalls Gogita Gogiberidze.
Following a request for proposals that involved a number of leading solution integrators, AES selected IBM Services to drive its migration to SAP HANA.
Alvaro Alegria comments: “Because SAP HANA was going to be the foundation for our global reporting environment, it was crucial that our database migration was as fast and straightforward as possible. IBM Services delivered all of the capabilities that we needed to ensure the success of our migration to SAP HANA.
“As well as possessing deep experience of similar projects in our industry, IBM offered us the global reach we needed to coordinate the migration efforts across all parts of our business. Crucially, AES considered that IBM had the technical expertise to complete the entire process more efficiently than any other vendor we evaluated.”
In parallel to its analytics transformation project, AES had taken the decision to migrate its SAP solutions from its in-house data center to a cloud-based platform. The aim was to reduce the cost and complexity of managing a physical infrastructure, and enable the business to focus on its core competencies. AES realized that outsourcing the hosting and management of its SAP solutions to a single vendor would enable it to achieve greater cost-efficiencies, and selected the IBM Cloud for SAP Applications platform—a fully managed and highly secure platform designed specifically for SAP Applications.
“Supporting our environment with the IBM Cloud for SAP Applications platform enables us to achieve the optimal balance between operational and capital spend,” says Gogita Gogiberidze.
“Working together, the team from IBM Services helped us to run the existing database environment and SAP HANA side-by-side throughout the testing and quality assurance phases, which enabled us to remediate potential issues before we moved our SAP HANA environment into production. The migration was a great success, and we are now preparing to decommission our legacy databases.”
Closing faster for deeper insights
Today, AES is building a truly global analytical and reporting platform that will enable it to analyze data generated by 1,000 legal entities in 17 countries faster than ever. The platform extracts and homogenizes source data on vendor spend from six SAP applications and two Oracle applications automatically, substantially reducing manual reporting work for AES employees.
“Our work with the new SAP solutions is just starting, but we are already seeing promising results,” says Alvaro Alegria. “Leveraging SAP HANA, we have been able to develop fast and robust analytics solutions, which include dashboards and reports that enable our procurement and supply chain teams to monitor and control USD23 billion in annual spend, and measure procurement cycles for purchasing, planning and inventory management.”
Alegria continues: “These new insights are helping us drive year-on-year improvements in inventory-level optimization for up to USD550 million in assets. Better still, by automating time-consuming month-end data processing tasks, we are freeing our finance teams to spend less time on low-value activities and more time drilling down into our financial results.”
AES is confident that SAP HANA will support the reporting requirements of more than 1,000 employees across its business—empowering its people to make better budgeting decisions on everything from its supply chain and plant maintenance to substantial investments in new generation and storage facilities.
Gogita Gogiberidze says: “We believe that the new SAP solutions delivered by IBM Services will offer our decision-makers the information they need to make better-informed strategic decisions.
“For example, by pinpointing the actual operational cost of our global inventory management and procurement processes, we will be able to shape best-practice approaches to reduce waste and shrink spending. And most importantly, it will be easier than ever to determine our most profitable activities, and make them the focus of our ongoing growth efforts.”
He concludes: “Our journey with SAP HANA is just beginning. Looking ahead, we predict that our SAP solutions from IBM will foster a culture of data-driven decision-making that will power our growth for years to come.”
The AES Corporation owns and operates a diverse portfolio of electricity generation and distribution businesses that provide reliable, affordable energy to customers in 17 countries. Employing 19,000 people, the company generated revenues of USD14 billion in 2016.
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