Eskom energizes its business performance with SAP and IBM


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Eskom, South Africa’s leading energy
utility, 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.

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Eskom energizes its business performance with SAP and IBM

  1. 1. we know they knowEskom energizes its business performancewith SAP and IBM Overview The Challenge  The Benefits  Key Solution Components Eskom, South Africa’s leading energy Introduction of employee self- Industry: Energy & Utilities utility, wanted to find new ways to service tools has simplified Applications: SAP® Industry streamline processes and cut costs, administration and reduced costs Solution for Insurance, SAP ERP® especially important during times of by an estimated 15 percent, with applications, including financials, economic uncertainty. In particular, accurate time and attendance, SAP Supplier Relationship managing almost 40,000 people payroll and employment data Management, SAP Customer and their pay was a demanding available throughout the business. Relationship Management, SAP task. The complexity of supporting Month-end reporting, which ERP Human Capital Management, multiple legacy applications and previously took two months and SAP NetWeaver Portal server platforms hindered progress, required at least one full-time- Hardware: IBM ® Power® 595 which was reflected in slow monthly equivalent employee, will be Software: IBM AIX®, Oracle, IBM financial consolidation and difficulties cut to 12 days. Single source of Tivoli® Storage Manager in gaining an enterprise-wide view transaction and financial data Services: IBM Business Partner of budget and performance from allows management to gain TCM different business units. enterprise-wide view of activities, based on accurate information The Solution that is not subject to re-statement Replaced SUN, HP and Dell or change. Flexible virtualization hardware, operating systems and technologies on IBM Power 570 support contracts and standardized allow greater utilization of existing on the IBM Power 595 platform for hardware investments, introduce SAP applications, and consolidated more resilient infrastructure in information storage to IBM System case of disaster, and reduce Storage DS8100, managed by capital outlay. Reduced processor IBM Tivoli Storage Manager. This numbers, down by 66 percent, replaced server deployments based leads to lower software license fees. on each Eskom Business Unit running their own SAP instances on discrete server stacks purchased in separate procurement processes.
  2. 2. “With virtualization Eskom of South Africa is one of the “IBM Power 595 servers combined with on the IBM Power global top ten utilities, measured by IBM System Storage offer us a flexible, generation capacity. The company powerful and integrated platform platform, we can generates some 95 percent of that is ideally suited to running large, consider the total electricity used in South Africa, sold centralized SAP solutions. Using this compute capacity, and to more than 4.3 million customers. powerful combination, Eskom has reassign resources or Eskom employs 37,857 people, and cut financial reporting times from two even shift applications devotes R823 million ($110 million) to months to twelve days, enabling an training from total annual revenues of enterprise-wide view of operations that within the existing R53.8 billion ($7.2 billion). was simply not possible before.” physical estate at no risk... With this IT The company relies on SAP Current applications Simplification solution applications to help run this diverse Questions over legacy applications’ from IBM, we can business, from financial controls ability to handle the so-called Y2K through to employee payroll problem had prompted Eskom to achieve much more with and attendance. During times of review ERP solutions, leading to the a more compact and economic uncertainty, reporting selection of SAP applications. The close efficient infrastructure.” on every aspect of business business fit between the core business performance was of increasing applications within the SAP for Utilities Sudash Raghubir, Infrastructure Advisor, importance. In particular, managing offering allowed Eskom to establish a Eskom 37,857 people and their pay was a cost-effective, standardized business demanding task, based on paper solution across all the operating units. processes and on isolated local From that point, the SAP landscape systems. has gradually grown to replace legacy applications for its core commercial Over time, many of Eskom’s SAP processes, including solutions such as and other business systems had finance, materials management, plant been implemented on different maintenance, and latterly SAP ERP hardware platforms. Collecting data Human Capital Management. from different systems, checking and integrating it before being able The first versions of the SAP software to produce meaningful and reliable were implemented on a location- results, was causing delays and, in by-location basis, and group-wide some cases, inaccuracies. reporting was managed by manual consolidation and analysis. Sean Maritz, Infrastructure Manager, comments, “We wanted to speed “We had collected an array of Sun, HP up our reporting, which meant and other systems, often bought as a increasing information flow and result of hardware-only RFPs in a drive improving accuracy. It was clear to reduce acquisition costs,” says Sean that SAP applications had the ability Maritz. “As Eskom’s business needs to provide the business information changed and grew, migrating the SAP we needed, from core commercial applications from one server brand to operations through to human another was difficult and relatively risky, resource management. Once we had and it was clear that a change in thinking decided to implement SAP solutions, was needed.” we turned to the choice of hardware platform. We wanted infrastructure Switch on the power that would provide a long-term Faced with the costs and complexity of solution for a growing business, able the mixed platforms, the Eskom team to respond to changing workload at reviewed both its acquisition policies competitive commercial terms. and infrastructure strategy. Working
  3. 3. with its technology business partner, providing almost instantaneous, hands “From a strategy pointTCM of South Africa, Eskom planned to off allocation of Disaster recovery of view, we viewstandardize on one platform for the SAP partitions to systems that require them. infrastructure as alandscape. For the duration of the Disaster, non production partitions are scaled back, service, to be provided toThe initial aim was to make it easier in line with business rules defined as meet the business migrate applications to more part of the system scoping exercise. The IBM approach ispowerful servers as the workload grew. IBM, IBM Business Partner TCM and exactly in line with thatDeveloping the logical argument, TCM ESKOM Corporate IT worked closely thinking, simplifyingmade the case to use virtualization to with ESKOM’s Audit division, to ensureallow several applications to run on each that the DR profiles and functionally the infrastructure andphysical system, and allocate resources match and satisfy the Corporate DR providing dynamicaccording to business requirements standards. delivery of the requiredrather than move applications to other services to the Eskomservers – reducing the business risk. Sudash Raghubir, Infrastructure business units at Advisor, remarks, “RunningEskom originally implemented two applications on a one-per-server basis reduced costs and betterIBM Power 595 servers at its primary tends to encourage you to buy over- quality.” data center, and a single Power 595 size equipment to allow for expansion, Sean Maritz, Infrastructure Manager, Eskomat a secondary center. This footprint which absorbs capital. With limitedwas subsequently expanded with an headroom on each physical machine,additional server at each location. TCM realistically you are only able to plan aprovided implementation, configuration year in advance.and commissioning as well as ongoingsupport and maintenance contracts. “With virtualization on the IBM Power platform, we can consider the totalEskom has divided its production compute capacity, and reassignservers into multiple logical partitions resources or even shift applications(LPARs), in effect providing more than within the existing physical estate20 separate virtual servers for the SAP at no risk. This gives us a planningapplications. For example, several horizon of around five years, with muchinstances of SAP ERP Human Capital lower need to refresh the physicalManagement run on each server, infrastructure and hence reducedallocated a share of the total processors capital expenditure. With this ITavailable. If the workload increases, Simplification solution from IBM, wethen additional CPU resources can can achieve much more with a more TECHNICAL LANDSCAPEbe allocated as required. Additionally, compact and efficient infrastructure.” Servers: IBM Power 595 with IBMresources, such as additional memory POWER5+ and POWER6 processors,or CPU, can be added to virtual servers Sean Maritz explains: “The IBM Power replacing HP, Sun Microsystems andduring production, with no service 595 platform offers virtualization Dell hardware. IBM System Storageinterruption. capabilities and resilience that we DS8100 replacing EMC Clarion could not obtain on other systems. Storage.The second data center acts as a For Eskom, this ensures continued Software: IBM AIX, IBM Tivoli Storagebackup and disaster recovery solution, operations for business-critical Manager, SAP Industry Solution forwith the servers divided into multiple applications at commercially attractive Insurance, SAP ERP applications,LPARs reflecting the production servers’ rates.” including financials, SAP SupplierLPARs. Less important applications are Relationship Management, SAPassigned a restricted CPU total, and Eskom has deployed IBM System Customer Relationship Management,business-critical applications continue Storage DS8100 systems for SAP ERP Human Capitalwithout interruption. This functionality is information storage, with 23.2TB and Management, SAP NetWeaver Portal,provided by IBM’s virtualization, Virtual 35TB at the production and backup OracleIO and dynamic LPAR functionality, sites, respectively.
  4. 4. Sean Maritz explains: “The DS8100 provided the local technical supportprovides reliable, centralized storage and implementation services, backedthat removes the need for costly and by the global resources availableinefficient direct-attached disks. through the IBM connection.”The business benefit is simpleradministration, and lower costs per The flexible IT landscape based ongigabyte.” the virtualization capabilities of the IBM Power platform reduces theNext generation capabilities effort and downtime associated withEskom is migrating its four principal re-allocating applications acrossSAP instances from legacy systems different servers. The disaster recoveryto a single, centralized Platform resources can also be used for IBM Deutschland GmbHon IBM Power 595. This approach development and quality assurance, D-70548 Stuttgartreduces complexity, eliminates the providing a 70 percent reduction, manual data collection and in the size of the “non-production” IBM, the IBM logo, and are trademarks of International Business Machines Corporation,consolidation process, and cuts the footprint with associated reduction registered in many jurisdictions worldwide. Alikelihood of errors when preparing in floor space, power, cooling and current list of other IBM trademarks is available on the Web at “Copyright and trademarkmonthly and annual reports. depreciation costs. information” at copytrade.shtmlAdditionally, the IBM Power platform Automation of disaster recovery Intel, the Intel logo, Intel Xeon and the Intel Xeon logo are trademarks or registered trademarks ofallows Eskom to introduce new and provisioning provides “hands off” Intel Corporation or its subsidiaries in the Unitedexpand its SAP solutions exactly as capability, replacing a manual process States and other countries. UNIX is a registered trademark of The Open Group in the Unitedthe business requires, without the that had a 96-hour recovery time with States and other countries. Linux is a trademarkbusiness risk of migrating from server a solution that now has an “instant on” of Linus Torvalds in the United States, other countries, or both. Microsoft, Windows, Windowsto server. Existing CPU capacity can capability. Virtualization allows rapid NT, and the Windows logo are trademarks ofbe allocated according to need, or provision of development and quality Microsoft Corporation in the United States, other countries, or CPU capacity can be increased assurance resources On Demand, and Other company, product or service names mayon the Power 595 servers. reduces lead time on development be trademarks, or service marks of others. and quality assurance projects by This case study illustrates how one IBMSean Maritz explains: “The Human up to six months, providing quicker customer uses IBM and/or IBM Business Partner technologies/services. Many factors haveCapital Management capabilities response to business requirements, contributed to the results and benefitsare already proving a great success, described. IBM does not guarantee comparable results. All information contained herein wasand, using SAP NetWeaver Portal, Sean Maritz concludes, “From provided by the featured customer and/or IBMemployees can now access essential a strategy point of view, we view Business Partner. IBM does not attest to its accuracy. All customer examples cited representpayroll, time and attendance, training infrastructure as a service, to be how some customers have used IBM productsand other information, wherever they provided to meet the business needs. and the results they may have achieved. Actual environmental costs and performanceare.” The IBM approach is exactly in line characteristics will vary depending on individual with that thinking, simplifying the customer configurations and conditions.Make the right connections infrastructure and providing dynamic This publication is for general guidance only. Photographs may show design models.In planning its strategic move to the delivery of the required services to © Copyright IBM Corp. 2011. All rights reserved.IBM Power platform, Eskom reviewed the Eskom business units at reducedthe hardware capabilities, the long- costs and better quality. At Eskom weterm roadmap for the technology, and are confident that we chose the rightthe business assistance available from platform in IBM to support our SAPpossible vendors. solutions.”Sudash Raghubir comments, “The © Copyright 2011 SAP AG SAP AGcan-do attitude demonstrated by Dietmar-Hopp-Allee 16IBM was very important, showing us D-69190 Walldorfa positive willingness to assist. TCM SAP, the SAP logo, SAP and all other SAP products and services mentioned herein are trademarks or registered trademarks of SAP AG in Germany and several other countries. SPC03299-ZAEN-00 (January 2011)