For energy providers, IT is now more important than ever before. Thüringer Energie AG (TEAG), from Erfurt in Central Germany, shows how energy providers can get in shape for the future with a cloud and platform strategy. The company is aiming to achieve maximum integration and master data quality.
Philipp Lübcke, CIO at Thüringer Energie AG, has worked in the industry for 20 years and is thrilled by the dynamism it is currently going through. But that wasn’t always the case. “When I got started in the energy sector, the business was relatively static, and I’ll admit that I was tempted by other industries over the last decade,” he says. Today, he no longer sees any need to change. Just the opposite, in fact: in recent years, the business “has become extremely exciting, and it will stay exciting,” Lübcke adds.
To understand his enthusiasm, all it takes is a look at his current employer, TEAG. The company, headquartered in Erfurt and with over 2,200 employees, supplies households and businesses with electricity, natural gas, heating, and water. It also added a telecommunications subsidiary to its portfolio several years ago, which offers broadband access, mobile telephony, and additional services such as storage. It has a new subsidiary for electromobility and another for photovoltaics.
In addition to these new business areas, the company’s core business—supplying electricity—is undergoing drastic changes. Lübcke emphasizes: “The energy transition is irreversible, and that doesn’t only mean the end of nuclear power, but also the end of coal-fired generation in the long term.”
Decarbonization requires decentralization and digitalization
The future lies in the central supply of natural gas and hydrogen through power plants, along with decentralized power generation through photovoltaics and wind power, according to Lübcke. “We give the municipalities in Thuringia all the support we can when it comes to executing the transition locally,” he says. To succeed, this energy transition requires perfect coordination of what experts refer to as “the three big Ds”: decarbonization requires decentralization, which in turn is only possible with maximum digitalization.
Which brings us to SAP, TEAG’s largest and most important strategic partner. In 2022, TEAG decided to move all its core processes for the energy sector—meter reading, billing, device management, contract and customer management, information exchange, and subledger accounting—to SAP S/4HANA Cloud in the long term. “That made us the first energy supplier with a comprehensive RISE with SAP S/4HANA Cloud strategy,” Lübcke says. “The energy sector is undergoing fundamental change, and data interchange within the companies will increase significantly. Decentralization and maximum digitalization mean that we will be processing much more data much faster, offering a variety of new cloud services based on AI, and creating many more automated decision-making processes.” All of which will require maximum integration and high-quality master data. And they also need the right partner.
Learning to manage complex projects
TEAG intends to migrate all seven of its deployed systems that manage master data to the new platform incrementally, a plan that has been divided into three large-scale projects. The first involved the implementation of the SAP S/4HANA core—initially on premise—including master data cleansing and version management of large amounts of legacy data. This project, which has been completed in the interim, involved around 200 internal employees and externals. Along the way, the team gained the ability to manage even complex SAP projects.
In the second step, TEAG implemented SAP S/4HANA Utilities, an ERP solution specifically for energy suppliers, together with the SAP Customer Experience portfolio based on SAP Service Cloud, divided into the three market roles of electricity supplier, grid operator, and metering point operation. This project has been underway for 18 months, and TEAG will go live with it on December 1, 2025, initially with the role of electricity supplier.
Last but not least, the third transformation project involves implementing SAP SuccessFactors solutions for workforce management. To this end, the company developed a road map in 2024, “so we can optimally leverage everything we need for this,” Lübcke says.
Demographic change is forcing the transition
The utility company aims to decommission all its current SAP systems by the end of 2027 and move them to SAP S/4HANA Cloud. The fact that TEAG has decided to run its central applications in the cloud in the long term, in addition to going all-in on SAP, is a result of the fourth “big D” in this story: demographics. “We won’t be able to completely replace the many employees who will be retiring in the next 10 years,” Lübcke says. “That’s why we need to become more independent of labor-intensive processes overall.”
Working in the cloud means getting a boost from AI
The company’s cloud strategy supports this goal, because it means TEAG will not only need less expensive hardware in the future but it will also require fewer highly-trained people to run and provide the systems.
And people who work in the cloud—with the resulting consistent focus on platform strategy and standardization—can take advantage of artificial intelligence in many areas. Take Joule, for example. This copilot is based on generative AI and learns from SAP data to help give users context-sensitive support.
All in all, “IT will take center stage more than ever for energy suppliers,” Lübcke says. “And business IT is also getting closer to key business decisions than ever before. That’s what gives the job so much variety and makes it so exciting.”
And it will certainly protect the TEAG CIO from temptation from other industries in the future.
