Sui Southern Gas Company Uses Technology to Benefit Customers.
by David A. Kelly, August 2009
Sui Southern Gas Company (SSGC) is powering up its capacity to do more with less while adding a jolt of energy to its profitability. As Pakistan’s leading gas utility company, SSGC delivers natural gas to more than 2 million customers in the provinces of Sind and Baluchistan. The entire system encompasses more than 120 towns and 930 villages that are geographically spread out across different types of terrain. SSGC uses a transmission network of more than 3,000km of pipeline to bring natural gas from the wellheads to its distribution points and then uses more than 32,000km of distribution pipeline to serve its industrial, commercial, and domestic customers in urban and rural southern Pakistan.
The far-flung nature of the populations it serves means that SSGC has to be exceptionally good at leveraging technology to innovate and deliver services and products more efficiently and effectively. SSGC is currently using high-pressure transmission and low-pressure distribution systems to chart new ground in providing gas to historically underserved populations.
In 2007, SSGC deployed an Oracle-based infrastructure in an ongoing implementation that has helped to reinvent the way the company does business, from tracking and delivering gas to billing customers and handling complaints.
“SSGC’s biggest strengths are our people; technology; management commitment; and a structured, Oracle-enabled re-engineering methodology that took us through the implementation successfully,” says Zuhair Siddiqui, senior general manager, Management Services, SSGC.
According to Irfan Zafar, chief technology innovation officer at SSGC, the results have been nothing short of breathtaking.
“When we closed our 2007/2008 financial year using the new Oracle Utilities customer care and billing system, we saw a very significant positive shift in our unaccounted-for gas [natural gas lost to theft, infrastructure, or accounting problems],” says Zafar. “We were able to reduce it by an unprecedented 2 percent.” The impact on the company’s ledger, he notes, is an additional profit of more than PKR (Pakistani rupees) 400 million per year, equivalent to about US$500,000.
SSGC also deployed (using mostly in-house resources) the entire Oracle E-Business Suite, facilitating a fundamental transformation of the organization’s people, processes, and technology and radically changing the way the company operates. For example, the company has been able to reduce its purchase lead times (PO processing, ordering, and receiving) from nine months to less than two months. Under a special arrangement with the government, SSGC is paid a guaranteed return of 17 percent on its capitalized investments. The company was able to triple its purchase and capitalization of assets through Oracle E-Business Suite, from roughly PKR3 billion per year to PKR10 billion per year. With regulations that allow SSGC to capture a 17 percent tariff on its capital investments, this jump in procurement spending has paid off handsomely for the company.
“Our technology costs for the project are all paid off, just as a result of our lead time being reduced,” says Zafar. “We’ve seen a very, very positive impact from our deployment of Oracle E-Business Suite.”
An important part of SSGC’s success was its use of the Oracle Insight program, a comprehensive business strategy development program that helps organizations understand how technology can address their critical objectives and business challenges.
“SSGC was clearly aligning itself to be a best-in-class organization focused on serving the needs of its constituents. The Oracle Insight program worked closely with the SSGC team to develop a transformational road map that spans across the Oracle product families. This provided the organization a platform and solutions that serve the unique needs of this industry,” says Sharad Sinha, vice president, Oracle Insight.
Handling Industry Challenges “So far there have been two major impacts on utility companies from the financial crisis,” says Rick Nicholson, vice president at Energy Insights, an IDC company based in Denver, Colorado. “The first is that the cost of securing credit for construction of new power plants or pipelines has gone way up, making it important for utilities to defer new construction and become more efficient. The second is that energy consumption is trending down due to the recession, reducing revenues. The combination of these factors makes it more important than ever for utilities to focus on saving money and increasing efficiency.”