A Government Business Enterprise, Hydro Tasmania generates electricity from hydropower, wind and gas from systems with a total capacity of 2,600 gigawatts. The organisation operates 30 power stations and more than 50 major dams. Enterprise software from SAP provides critical functionality to all Hydro Tasmania businesses, with the parent organisation relying on end-to-end SAP enterprise resource planning software to manage its formidable portfolio of assets.

Hydro Tasmania has relied on SAP for about a decade to meet its requirements, initially deploying its software to cover business functions such as finance, human resources, payroll and plant maintenance. In 2020, the organisation moved from a legacy SAP ECC platform to SAP S/4HANA and its current landscape features SAP S/4HANA, SAP SuccessFactors, SAP Concur and SAP Cloud Platform, as well as legacy products such as Supplier Relationship Management. 

“Our SAP platform also leverages out to our data and analytics capabilities, as well as to our human capital management and intelligence platforms,” explains Tristan Coleman, Information Technology Solutions Manager, Hydro Tasmania. “As well as being key to our fundamentals, the platform is crucial to the people and business enablement strategies that underpin our IT and business strategies.”

A Dynamic, Fast-Changing Market

The fast-changing energy market and the emergence of new opportunities for renewable energy providers prompted the organisation to consider how to obtain more value from its strategic assets. This meant understanding the existing Hydro Tasmania SAP footprint and licence status to align them to its future. “The opportunities for us are massive, but very much driven by data, good asset management processes and additional SAP functionality around predictive maintenance and more,” says Coleman. The organisation’s ongoing focus on cost optimisation and obtaining value for money was another driver for the SAP licence review.

“More broadly, we needed to shift the role of technology – including SAP and other multinational providers’ applications – from simply running our organisation to a strategic enabler that can help us make important decisions proactively,” says Coleman.

Hydro Tasmania held discussions with SAP about its existing deployment, its ‘shelfware’ – software purchased but not used – and the energy enterprise’s direction. However, as these conversations continued, the organisation realised it needed a partner with comprehensive knowledge of SAP to assist with negotiations.

“We have extremely good internal business acumen and knowledge about our technology and highly skilled people looking at our complete commercial portfolio, but licensing and contract negotiations are complicated, and we needed to engage with experts to achieve the right outcome,” says Coleman.

A Partner with Deep Knowledge of SAP

The organisation had used other providers in the past to assist with licensing negotiations but wanted a partner with deep experience and knowledge of SAP.

“We didn’t want a generalist negotiation strategy as we can do that ourselves and when we looked at Invictus Partners, we could see the organisation had people who were ex-SAP employees with the knowledge we needed and a network back into areas of the vendor,” says Coleman.

Invictus Partners also received a positive recommendation from Julie Farrer, Head of Information Technology, Hydro Tasmania, based on her work with them on a previous project.

Hydro Tasmania engaged Invictus Partners to understand the state of its SAP footprint and licences, its options for moving forward and how it could work with SAP in an open, honest and strategic fashion. Invictus Partners proposed, and Hydro Tasmania accepted, a fixed-price model that met the client’s requirements.

Recognising the importance of the project as part of a broader strategic review of the relationship between Hydro Tasmania and SAP, Coleman and IT Commercial Manager Charmaine Stanton had full support from the energy organisation’s Chief Financial Officer, to whom the IT function reports.

“Our CFO is a strong proponent of SAP and how it supports the organisation, so it was very important to get this right,” says Coleman. “Invictus Partners was very influential in ensuring we had the right people in the room for discussions focused on resetting the relationship.”

Invictus Partners helped Hydro Tasmania structure its conversations with SAP to ensure the vendor would be receptive to its proposals and negotiating positions, and to understand who to engage in the process and when – both internally and from SAP, including the vendor’s regional utility account manager. Invictus Partners’ expert assistance over six months has laid down the fundamentals of an SAP deployment that can accommodate the organisation’s new direction.

An Excellent Relationship

“The longer we worked on the relationship and understood the value, the more we could bring Invictus Partners to the table in our discussions rather than simply asking them to provide advice behind the scenes,” says Coleman.

Coleman and Stanton were extremely impressed with Invictus Partners’ flexibility and engagement throughout the exercise. The consulting firm’s team members were always available for conversations ahead of meetings between Hydro Tasmania and SAP and to join on teleconference if required, to ensure there were no surprises or misunderstandings.

The IT leaders also welcomed the diligence and detail-orientation of the Invictus Partners team in reviewing documentation and other materials to understand the current state of the Hydro Tasmania SAP deployment and options for negotiation.

“Doug Gibson [Invictus Partners’ Managing Partner] talked about ‘we’ in reference to everyone involved in the project, which put me at ease that we were in this together and working to get a shared outcome,” says Stanton. “He really was after a good result for Hydro Tasmania and that showed in the work he did and the effort he put in.”