Electrica Furnizare is the market leader in the Romanian electrical energy supply market and the supplier with the largest customer portfolio, operating primarily in 18 counties and in Bucharest, with license to supply countrywide.
Besides selling electrical energy, Electrica Furnizare is also provider for various services, and has recently entered the natural gas supply market (licensed since July 2017).
The company was created in July 2011 by merging three state-owned supply companies, each of them using a different SAP ERP system implemented together with their electric power distribution partners in 2002-2003, subsequently upgraded and unbundled from the distribution systems in 2006-2007.
Since 2011 Electrica Furnizare operated in three different SAP ERP systems, consolidating via Excel all its financial data.
In July 2014, Electrica Group (the majority stakeholder for Electrica Furnizare) became publicly traded (Bursa de Valori Bucuresti and London Stock Exchange). This was the biggest IPO in the history of the Bucharest Stock Exchange, its success confirming the investors’ trust and providing both prestige and responsibilities.
The IPO required better period closing reporting accuracy and speed, stronger corporate governance, readiness for IFRS adjustments and reporting, and group reporting requirements (such as accounting for intercompany transactions within the group). From business perspective, Electrica Furnizare needed to prepare to embrace the Group strategy for business optimization and transparency, increased efficiency in the managerial decision process, ensuring that its systems can accommodate the shared services concept.
Given the significant differences on how business processes were executed within the three regions (and SAP systems), the project Steering Committee took a significant decision in the beginning of the project and changed the scope from simple unification to reimplementation. Thus we implemented a new SAP ERP environment, based on a thorough analysis and design phase, with significant business changes in order to align and streamline the processes from each subsidiary. A particular case was the human resource module, including the payroll calculation, previously performed in SAP in only one of the three regions (6 counties out of 18).
Another very important decision was to revert as much as possible the deviations from the SAP standard and best practices. The newest SAP versions (for ERP and BW) were used, thus providing the current best practices and all the up-to-date functionalities. During the project we realized two automated interfaces for revenue estimation / recognition and billing and for receipts accounting.
Sales and distribution processes were now implemented in SAP, so that there would not be any need for direct financial postings, decreasing the manual work and the risk for errors.
The implementation started in mid-November 2015 and the system went live on July 1st 2016. The project included hardware delivery (servers, storage), licenses (the difference required for payroll processing) and the implementation services that helped Electrica Supply adopt the industry best practices.
Processes in all branches are managed in the same way and configured in a single approach, consistent and auditable for the entire organization.
The complex revenue recognition process (estimates recording), followed by revenue reconciliation in SAP ERP (based on specific customer categories) and monthly receivables processing, gained significant accuracy and speed becoming transparent to users and management alike.
Benefiting from the optimization provided by the new SAP configuration and the added interfaces, Electrica Supply users can embrace the “fast closing” concept. Their efforts can now be redirected from reporting and assuring corporate governance to increasing their customers’ satisfaction and optimizing core business processes.