The energy industry is undergoing a fundamental transformation. To mitigate the impact of climate change, energy suppliers have to meet new objectives and focus more and more on renewable energies. In addition to growing competitive pressure in the sales markets, regulatory impulses are increasingly encroaching on infrastructure-based business models. Municipal energy suppliers such as Stadtwerke Essen AG (SWE) have to meet further demanding conditions, as their investment volume depends on the municipal budget situation.
SWE's core business is providing public services to the residents of Essen, including drinking water, gas, drainage and, increasingly, electricity. Founded in 1867, today SWE has extensive infrastructures in gas (1,400 km), water (1,500 km) and drainage (1,600 km) sectors, at the moment the company employs almost 900 people.
SWE knew that they were not performing at their maximum capacity, so they put innovative solutions to increase the efficiency of its core and support processes high on their agenda. One of the main aims was to (partially) automate analog process flows that were costing Stadtwerke Essen a lot of time and resources.
It was clear from the beginning that financial accounting would benefit most from new technologies to achieve considerable process efficiency and automate manual processes. For this reason, SWE’s Innovation Management looked for a process mining solution in addition to RPA in 2019.
"Of course, we talked to various providers. What convinced us about Celonis was being able to work with the tool ourselves. We wanted to be able to analyze our data ourselves and take a deep dive into the subject," recalls Kathrin Felderhoff, Innovation Manager at SWE. If the customers can examine their own data and the resulting optimization potential themselves, they have much more trust in the solution.
"With Celonis, we can execute initiatives according to our ideas. And you can start using it right away after a short training period - it's simply user-friendly."
At the beginning, a Value Creation Workshop with Celonis provided fundamental insight into accounts payable: So far, SWE only applied minor and partial automation. 100% of all invoices required manual actions from workers in at least one sub-step of the process. In addition, the rate of paper invoices was around 80% at the beginning of the analysis.
After these initial analysis results, SWE and Celonis were able to identify further potential for improvement: In addition to a comparatively high rate of CpD entries (here, invoices are assigned to a collective account for one-time transactions, for both debtors and creditors), low-price invoices amounted to 25% of the approximately 43,000 invoices per year. This caused a mountain of processing and rework in accounting. In further steps, SWE and Celonis identified cash discounts and advanced digitization of invoices and remittance advice to suppliers as additional areas for optimization.
It became clear from the first that this was a heap of potential, but SWE’s finance department was keen to put in the necessary work.
"We call Celonis our data magnifier with which we discover unnecessary manual steps and then try to automate them"
Stadtwerke Essen used Celonis’ technology to gradually turn the insights gained into action. CpD entries are now a thing of the past. First, processing instructions were developed for all colleagues in the accounts payable department for CpD postings - to improve data quality, the CpD option is now dispensed with entirely. Celonis’ tracking capabilities make sure that invoices do not stray into the CpD account.
Automating low-price invoices as much as possible was a particular concern for the public utility. "Each processing of an invoice costs internal processing time - if the invoice amount is only a few euros, this of course only creates additional unnecessary costs that are out of proportion to the invoice amount," explains Kathrin Felderhoff. In this case, a cross-company accounting solution has been realized for Stadtwerke Essen and one of its subsidiaries, whose invoices account for a large share of the low-price invoices at SWE.
As a result of the system transformation, 25% of all low-price invoices are now processed semi-automatically, while the remaining invoices only require two to three manual verification steps thanks to the partial automation. By leveraging the identified potential, a significant increase in efficiency was realized in accounts payable.
Supported by the insights and control over its own data, accounts payable was further digitized and optimized, even apart from the low-price invoices. With minor exceptions, internal project management executes digitally now. In addition, switching remittance advice to email has reduced turnaround times.
"Every manual step we can remove is an important step," Felderhoff sums up.
Kathrin Felderhoff is thoroughly satisfied with what has been achieved so far - in her role as a problem solver in the finance department, she regularly benefits from using Celonis: "When colleagues come to me with questions, I can quickly find out where exactly the process has problems."
Stadtwerke Essen do not regard Celonis as a management tool; after all, one of the main goals was to show employees how to optimize processes and the benefits of fully using and optimizing their own data. "Our goal is to optimize processes, automate them and thus increase the efficiency of our finance department in core and support processes. This will allow us to take on additional services with a comparable number of employees and provide more variety in our day-to-day business," Felderhoff says.
This is far from being the end with Celonis. In February, SWE implemented their Meter-to-Cash process, which will be ready for improvements after process discovery. In addition, the company is developing new KPIs with Celonis across its departments, and further processes must be scalable for future automations with RPA.
"Needless to say, we also want to advertise this excellent tool a bit within the company," Felderhoff explains. However, it is quite possible that the capabilities and user-friendliness of Celonis will quickly get around by themselves at Stadtwerke Essen.