A periodic discussion point around C@W is the hash that apparently capable companies (and governments...) make of software procurement and installation. The amounts of $$$ that unscrupulous and rapacious consultancies - "system integrators" - make from these suckers is quite astonishing; and frequently with crap end-results to boot. They advise their clients to spend far too much; they pocket the lion's share (often leaving the software vendor grovelling in the dirt); and their implementation skills & project management are deficient. Yet still it goes on - year after year.
So I snorted loudy, but was not unduly amazed, upon reading this announcement - possibly the biggest triumph of optimism over experience I've ever seen:
E.ON enlists software company SAP to digitalise its power grid and customer service in a 2-year project, the heads of the two companies, Johannes Teyssen (E.ON) and Christian Klein (SAP) said in an interview. In total, E.ON is investing several hundred million euros in the digitalisation of its network and sales division and a “high double-digit million euro amount” in the cooperation with SAP, Teyssen said...
A story. Many years ago I worked for an energy company that knew what it was doing. When gas trading started in the UK we knew, from our US experience, exactly what was needed for deal-capture and processing which, in the early days of trading (with modest deal-flow) was not a massive software requirement. We turned loose two of our own employees who were versed in MS Access, and they designed and delivered a wholly workable system in 6 weeks flat. Cost? Bugger-all, seeing that Access was conveniently on everyone's PC already, licensed as part of the Office suite. Just two guys' time, and a round of training for front, middle and back office staff.
Shortly thereafter I was invited to expensive lunch by a competitor. As always, the reason only came up at coffee. We are outgrowing our gas trading spreadsheets, he said, and we know we need some proper software. Our 'Big 4' consultantcy has advised us to budget £6m - does that sound about right?
I let him carry on in his state of blissful stupidity. Reprehensible, I know. Well, it was their money - and a nice lunch. Their project took nearly a year. You may safely bet the consultancy spent the full budget for them.
Now, about E.ON's high double-digit million euro amount. "... in cooperation ..." ?! €99m buys one f*** of a lot of "cooperation" in my book. All so wearily familiar. Still, I suppose they'll claim it as a necessary outlay to the German network regulator. Add it to the Energiewende bill - it's small beer in that context.
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Footnote: Further to my recent note on Centrica trying to flog off its LNG portfolio: "Centrica resumes talks on potential sale of North Sea oil and gas venture Spirit Energy (Bloomberg). The company is in discussions with 'a number of parties' regarding a sale of its controlling stake in Spirit Energy. The stake could be worth $1.8-1.9bn." Maybe that LNG sale isn't going so well.