Supply and Pricing Director
Full speed ahead
E.ON calculates the best pricing proposal – in real-time
With 30 million clients worldwide and 86.7 billion euros in sales revenue, E.ON is one of the largest private energy groups in the world. In Italy – where it has operated since 2000, serving more than 800,000 clients – E.ON is creating an integrated system in collaboration with a group of technology partners, including SAS, to take advantage of new production capabilities. The system is intended to strengthen the one already used by E.ON to manage energy sales in order to guarantee the efficient flow of information and timely reporting.
With the implementation of the system, each change and adjustment can now be calculated before the energy is actually supplied. This instrument, useful both before and after supply, is particularly useful in years like this, with significant changes in consumption trends.
The project deals primarily with the possibility of creating business offers using recalculation and pricing functions. In fact, the system was designed to closely follow an offer’s life cycle and to ensure that it would be handled in a supervised manner.
“The first problem was integrating the makeshift systems of the three sales divisions that had formed within the group and that used three different billing systems,” explained Marco Rocco, Supply and Pricing Department Manager. “We needed to revisit the application’s architecture to allow the three areas to work in unison. The systems are currently integrated directly and vertically. We created an accessible, intelligent and strong system based on our past experience in area trading.”
The areas in question included a forecast portfolio that integrates all data about anticipated client consumption, a collection of consumption and price data, and an area for billing and credit checks. “From a technical point of view, data security was strengthened and offer management was improved. At the same time, data access became stricter, because it was restricted to a limited number of people, as well as more flexible, because it could be used more intuitively to improve business offers and identify market trends,” said Alessandro Cugno Garrano, Senior IT Manager.
The goal was to permit integrated portfolio management with real-time reporting in order to manage data during the energy and gas pricing and offer processes. “Our partnership with SAS allowed us to develop an architecture that provides a foundation for future steps like rapid portfolio analysis, product development and improved integration with the German parent company," added Rocco.
SAS for Sustainability Management includes a back end, a calculation engine and a front end. “We organized the client database, processing it using SAS' analytical module to obtain real-time energy pricing proposals and, later, gas pricing proposals. Finally, E.ON's customized interface allows us to obtain a specific formula for the offer and to use analytical capabilities to formulate the best offer for the end user,” explained Maria Luisa Mignemi, Business Consulting Manager at SAS. “The retailer can then make offers with complete control over the formulas, monitoring each phase and evolution of the project and of the offer. One of the increased risks for a company that supplies electricity is certainly sales, specifically in terms of volume, so we needed to create a system that could follow each phase of the offer, step by step.”
“In the beginning,” said Rocco, “we were able to estimate a client’s consumption, but with the implementation of the system, each change and adjustment can now be calculated before the energy is actually supplied. This instrument, useful both before and after supply, is particularly helpful in years like this, with significant changes in consumption trends.” The company’s goal will now be to expand the operative front end to develop a managerial reporting system in order to conduct post-sales performance analyses.