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IBM Announces Global Utility and Energy Services Industry Centers of Excellence

Centers of Excellence in Asia Pacific, Europe, Latin America and North America Help Utilities Implement ERP Packages Quickly, Efficiently; EDF Already Seeing Benefits

MADRID - 22 Jun 1998: . . . At SAPPHIRE today, IBM announced the creation of four Centers of Excellence that will focus on satisfying growing demand for end-to-end enterprise resource planning (ERP) solutions for the global utility and energy services industry. These solutions focus on integrating any or all of an organization's key business processes -- from human resources to accounting to supply chain management -- in a collaborative environment.

As part of a virtual team across all industries -- many of which will be dedicated to the utility and energy services industry -- IBM is deploying over 8,000 consulting & services professionals -- through IBM Global Services -- covering project scoping and planning, installation, integration and maintenance.

At each Center of Excellence, IBM is deploying process as well as core business application templates that facilitate the replication of the key aspects of an integrated business solution for any utility and energy services company rolling-out an extensive ERP technology infrastructure. This represents significant gains in time to benefit, return on investment and cost of ownership.

"As utility and energy services companies become privatized and compete in an increasingly deregulated and global marketplace, they are realizing the need to reengineer their core business processes to ensure that they are efficient and cost-effective," said Curtis Tearte, general manager, IBM Global Utility and Energy Services Industry. "To achieve this requires a vast range of business and technology skills -- from front-end consulting and application development and hosting, through integration and support, including financing. IBM is uniquely positioned to provide these integrated services, capabilities and industry expertise ."

EDF Benefits From ERP Solution

The world's largest utility -- Electricité de France (EDF) -- recently partnered with IBM to help implement an end-to-end ERP solution based on the SAP application suite. The project, called Magellan, involved the installation of some 2,600 SAP licenses in 21 companies in 1998; 800 had already been installed in 7 companies in 1997. This coincided with the re-organization of EDF's infrastructure divisions (International Division, Financial and Legal Services Division, Human Resources Division) -- the aim being to enhance the competitiveness of these divisions, like in the operational divisions, which have now been converted into profit centers.

The IBM project, developed with SAP management software, has enabled EDF management to carry out "activity based costing management." This type of management focuses on the analysis of costs and allows the company to closely monitor where value is generated. It offers a very effective way of identifying where real productivity lies, therefore boosting the company's competitive edge in line with the company's objectives.

"We are very satisfied with the project implemented by IBM," said Roland Brette, EDF project manager. "It was our first large-scale ERP project and everything went very well. IBM not only succeeded in the technical area but also on all other aspects of the project and, in particular, the end-user education program. Deadlines were consistently met and users were operational on the new system right on schedule. The transition from the old system to the new was carried out without the slightest problem and the whole system was running smoothly within three months. The results of this strong commitment from both sides are self evident. All project targets were met and costs were kept 25% lower than forecast. The operating budget for the Magellan IT system is now six times less expensive to run than the former system. It has also enabled us to modernize the purchasing, sales, accounting and management systems. Today, the return on investment is earlier than initially estimated. This has been made possible through quick installation and an effective launch strategy. We were able to yield gains by the end of last year even before the project was completed. EDFmanagement and its infrastructure divisions are now equipped with the necessary tools to optimize management and prepare for a market soon open to keen competition."

Contact(s) information

Rod Thorn
IBM
914-642-5467
rthorn@us.ibm.com

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