In a benchmarking study of utilities companies,** those that run SAP outperformed non-SAP customers on key performance indicators for the industry over a three-year period – improving asset utilization faster and controlling costs better.

Fixed Asset Utilization (FAU)

Maintaining a low FAU is critical to minimizing your investment in fixed assets and maximizing the return for your existing investment. By optimizing the use of facilities and equipment and disposing of unnecessary fixed assets, you will save time and expenses.

Leveraging SAP solutions that support centralized generation and production planning, proactive maintenance, and utilization of production, services, and/or distribution assets, SAP customers outperform non-SAP customers. According to the Stratascope benchmarking study, in 2003, SAP customers operated with 11.3% less invested in fixed assets – requiring $1.47 to generate one dollar of revenue as compared to $1.66 to generate one dollar of revenue by non-SAP customers.

Days Sales Outstanding (DSO)

Achieving a low number of days sales outstanding is key to maintaining your cash-to-cash cycle. In the utilities industry, cash flow is a critical issue and there is usually no room to finance extended or longer-than-average credit terms.

By implementing SAP solutions that address long meter-to-cash cycles, late payment escalation, and inefficient or erroneous invoicing, SAP customers outperform non-SAP customers. According to the Stratascope benchmarking study, the three-year trend (2000 - 2003) shows that SAP customers controlled negative market pressures 65% better – with an 11% degradation for SAP customers as compared to a 31% degradation for non-SAP customers.

Operating Income Margin (OIM)

Maintaining your operating income margin while still being able to sustain ongoing infrastructure investments and retain shareholder support is essential to remaining profitable over the long-term. A high operating income margin enables you to evaluate your company in terms of budgeting, forecasting, and project planning.

With SAP solutions that address issues related to poor information access and decision-making, limited customer and supplier forecast collaboration, and over-reliance on spot market transactions, SAP customers outperform non-SAP customers. According to the Stratascope benchmarking study, in 2003, SAP customers generated 14.2% more operating income margin; the three-year trend (2000 - 2003) shows a 0.5% improvement in OIM for SAP customers as compared to a 0.1% improvement in OIM for non-SAP customers.

Cost of Goods (and Services) Sold (COGS)

Reducing the cost of goods and services sold is an important element in controlling costs and improving profits. A low COGS can help you optimize purchasing power, inventory management, production, and service costs.

Using SAP solutions that can alleviate issues related to poor information access and decision-making, limited customer and supplier forecast collaboration, and over-reliance on spot market transactions, SAP customers outperform non-SAP customers. According to the Stratascope benchmarking study, the three-year trend (2000 - 2003) shows that SAP customers controlled costs better – showing a 1.1% improvement among SAP customers as compared to a 0.2% improvement among non-SAP customers.

Days in Inventory (DII)

Reducing your days in inventory is evidence that your company is maintaining acceptable service levels and carrying a smaller investment in the inventory. A low DII requires close attention to detail and systems that allow planning, visibility, and supply chain management.

By implementing SAP solutions that address unsupported repair/service order sequencing, inaccurate inventory levels, and unpredictable or long purchasing lead times, SAP customers outperform non-SAP customers. According to the Stratascope benchmarking study, in 2003, SAP customers managed inventory 5.8% better – with inventory on hand for an average of 27 days among SAP customers as compared to an average of 29 days among non-SAP customers.

Revenue Growth (Rev Growth)

Revenue growth is one of the most important factors considered by investors. And revenue growth is usually the driver that has a positive impact on most of the other factors, assuming the company is profitable.

SAP solutions that address issues associated with unreliable demand and service level forecasts, weak call center/customer interaction, and limited support for specialized contracts and pricing help SAP customers outperform non-SAP customers. According to the Stratascope benchmarking study, in 2003, SAP customers grew revenue 7.1% faster – with a 13.3% improvement in revenue growth for SAP customers as compared to a 12.4% improvement in revenue growth for non-SAP customers.

* Based on a 2005 Stratascope Inc. analysis of publicly available fiscal results of all non-financial companies listed on NASDAQ and NYSE.
** Based on September 2004 Stratascope Inc. utilities companies benchmarking study.