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SAP Taps Best-in-Class Functionality from Industry Solution Portfolios SAP® for Oil & Gas and SAP® for Utilities to Cover End-to-End Business Processes in Rapidly Growing Market
TOKYO, Japan - June 2, 2003 - SAP AG (NYSE: SAP) today announced a new initiative to provide a comprehensive solution covering the unique business processes of companies in the rapidly growing natural gas market. As oil and gas companies expand their services and reach across the globe in newly deregulated markets, SAP taps the capabilities of its industry-specific solution portfolios, SAP® for Oil & Gas and SAP® for Utilities, to create the first offering to meet the specific business demands of the natural gas industry. By enhancing its leading solutions for the petroleum and energy industries with tailored functionality, SAP will enable natural gas companies to streamline supply chain processes, efficiently master the financial and logistic complexities of deregulation, and gain a competitive edge as they expand their enterprises into new territories. The announcement was made at the World Gas Conference being held in Tokyo, Japan, June 1-5.
Marked by untapped reserves, steadily increasing demand, and new opportunities opened up by the continuing deregulation of markets across the globe, the natural gas market is widely predicted to experience significant future growth and has thus become a market of key strategic focus for major energy companies. Although billions of dollars have been invested in exploration as well as infrastructure for transporting gas from remote locations, the market faces additional challenges across the complete gas value chain, such as insufficient transparency in financial and logistic processes and lack of data exchange standards for efficient cross-enterprise collaboration.
“As the world economies turn the corner toward renewed expansion, energy will be among the first sectors to anticipate the growing demand. For a number of reasons, natural gas is uniquely suited to satisfy a growing portion of this growth, ” said Dave Woll, vice president, the ARC Advisory Group. “The management of individual operations from production through utilizations has evolved to a high level of operational excellence. However, the breadth of this supply chain and the complexity associated with the movement and scheduling of a compressible product poses a formidable integrated management challenge. SAP’s foresight in identifying the natural gas supply chain for their comprehensive solution has the potential to deliver impressive returns for themselves and their customers.”
The SAP joint initiative pools the expertise of SAP’s industry business units Oil&Gas;, Utilities, Chemicals, and Mining to address the specific business processes of the natural gas industry. Best-in-class functionality from SAP’s industry solution portfolios will help gas companies take advantage of opportunities in newly opened markets by optimizing processes across the entire gas value chain—from exploration and production to transmission, distribution, third-party access, and retail. SAP is tailoring the sophisticated supply chain management capabilities integral to SAP for Oil & Gas and integrating recent developments that are helping utility companies master the complexities of enforced deregulation, such as financial and energy data management from SAP for Utilities.
The solution will cover the entire value chain of the natural gas business from reservoir to end consumers. On the upstream side, the solution fully supports the tracking and valuation of all gas volumes produced across complex production networks. Functionality for joint venture management and production sharing agreements with local authorities will enable gas companies to achieve full transparency of all relevant costs, such as OPEX (operating expenditures) and CAPEX (capital expenditures), and thereby efficiently manage partner relations and accounting for cost and revenue sharing.
To help natural gas companies improve supply chain and work management processes, SAP draws on proven functionality from its leading solutions and industry portfolios, covering offshore logistics management, demand planning, transmission management, and network balancing with SAP® Advanced Planning and Optimizer (SAP APO) in mySAP™ Supply Chain Management (mySAP SCM), as well as management of service processes and assets with Asset and Work Management in SAP for Utilities, a mission-critical functionality especially for transmission and distribution companies. To enable more accurate forecasting and to provide companies the necessary flexibility for gas trading and acquisition, SAP is also making industry-specific enhancements to SAP® Trader’s and Scheduler’s Workbench (SAP TSW), a key component of the SAP for Oil & Gas and SAP® for Mining solution portfolios.
The new industry offering for natural gas companies will also comprise the scalable, deregulation-enabled billing engine in SAP for Utilities to enable fast time-to-market span for new energy products and quick adjustments to rapidly changing legal requirements. By drawing on energy data management and sales capabilities of SAP for Utilities, the solution will enable natural gas companies to efficiently execute complex sales and billing processes caused by deregulation, such as third-party reconciliation and settlements.
To support decision making and enable gas companies to evaluate customer energy usage, plant maintenance, and financial data, mySAP™ Business Intelligence (mySAP BI) will be enhanced with industry-specific content. In addition, mySAP™ Enterprise Portal will provide enterprise-wide, role-based access to key data. SAP NetWeaver™, SAP’s application and integration platform, acts as the open, flexible foundation that supports the cross-enterprise efficiencies made possible by mySAP BI and mySAP Enterprise Portal.
In addition, the offering will leverage the utility industry-specific functionality in mySAP™ Customer Relationship Management (mySAP CRM) to empower marketing and sales forces to better address both residential and industrial customers and enhance customer service with service management capabilities for connection, installation, and meter reading management.
“SAP is tapping a wealth of industry expertise as a trusted and innovative advisor for both utilities and oil and gas companies to create a comprehensive solution that is unparalleled in the natural gas market,” said Nils Herzberg, senior vice president, Manufacturing & Distribution, SAP AG. “With best-in-class functionality from our proven industry solution portfolios, SAP will provide leading edge technology to integrate people, information, and business processes in the natural gas industry, enabling companies to drive new efficiencies and seize revenue opportunities in this fast-growing global market.”
SAP is the leading business application provider in the oil and utilities industries; with 97 percent of Fortune 500 oil companies running SAP and a 40 percent global market share in the utilities industry (85 percent in Germany). The new tailored solution for natural gas companies will be available for customers on a global basis at the end of 2003.
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About SAP
SAP is the world's leading provider of business software solutions. Through mySAP™ Business Suite, people in businesses around the globe are improving relationships with customers and partners, streamlining operations, and achieving significant efficiencies throughout their supply chains. The unique core processes of various industries, from Aerospace to Utilities, are supported effectively by SAP's 23 industry solutions. Today, more than 19,600 companies in over 120 countries run more than 62,000 installations of SAP® software. With subsidiaries in over 50 countries, the company is listed on several exchanges including the Frankfurt stock exchange and NYSE under the symbol "SAP." (Additional information at http://www.sap.com)
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