Eskom, South Africa’s leading energy utility, wanted to find new ways to streamline processes and cut costs, especially important during times of economic uncertainty. In particular, managing almost 40,000 people and their pay was a demanding task. The complexity of supporting multiple legacy applications and server platforms hindered progress, which was reflected in slow monthly financial consolidation and difficulties in gaining an enterprise-wide view of budget and performance from different business units.

1.  The Challenge
Eskom, South Africa’s leading energy
utility, wanted to find new ways to
streamline processes and cut costs,
especially important during times of
economic uncertainty. In particular,
managing almost 40,000 people
and their pay was a demanding
task. The complexity of supporting
multiple legacy applications and
server platforms hindered progress,
which was reflected in slow monthly
financial consolidation and difficulties
in gaining an enterprise-wide view
of budget and performance from
different business units.
 The Solution
Replaced SUN, HP and Dell
hardware, operating systems and
support contracts and standardized
on the IBM Power 595 platform for
SAP applications, and consolidated
information storage to IBM System
Storage DS8100, managed by
IBM Tivoli Storage Manager. This
replaced server deployments based
on each Eskom Business Unit
running their own SAP instances on
discrete server stacks purchased in
separate procurement processes.
Eskom energizes its business performance
with SAP and IBM
we know
they know
Overview
 The Benefits
Introduction of employee self-
service tools has simplified
administration and reduced costs
by an estimated 15 percent, with
accurate time and attendance,
payroll and employment data
available throughout the business.
Month-end reporting, which
previously took two months and
required at least one full-time-
equivalent employee, will be
cut to 12 days. Single source of
transaction and financial data
allows management to gain
enterprise-wide view of activities,
based on accurate information
that is not subject to re-statement
or change. Flexible virtualization
technologies on IBM Power 570
allow greater utilization of existing
hardware investments, introduce
more resilient infrastructure in
case of disaster, and reduce
capital outlay. Reduced processor
numbers, down by 66 percent,
leads to lower software license fees.
 Key Solution Components
Industry: Energy & Utilities
Applications: SAP®
Industry
Solution for Insurance, SAP ERP®
applications, including financials,
SAP Supplier Relationship
Management, SAP Customer
Relationship Management, SAP
ERP Human Capital Management,
SAP NetWeaver Portal
Hardware: IBM®
Power®
595
Software: IBM AIX®
, Oracle, IBM
Tivoli®
Storage Manager
Services: IBM Business Partner
TCM

2. “IBM Power 595 servers combined with
IBM System Storage offer us a flexible,
powerful and integrated platform
that is ideally suited to running large,
centralized SAP solutions. Using this
powerful combination, Eskom has
cut financial reporting times from two
months to twelve days, enabling an
enterprise-wide view of operations that
was simply not possible before.”
Current applications
Questions over legacy applications’
ability to handle the so-called Y2K
problem had prompted Eskom to
review ERP solutions, leading to the
selection of SAP applications. The close
business fit between the core business
applications within the SAP for Utilities
offering allowed Eskom to establish a
cost-effective, standardized business
solution across all the operating units.
From that point, the SAP landscape
has gradually grown to replace legacy
applications for its core commercial
processes, including solutions such as
finance, materials management, plant
maintenance, and latterly SAP ERP
Human Capital Management.
The first versions of the SAP software
were implemented on a location-
by-location basis, and group-wide
reporting was managed by manual
consolidation and analysis.
“We had collected an array of Sun, HP
and other systems, often bought as a
result of hardware-only RFPs in a drive
to reduce acquisition costs,” says Sean
Maritz. “As Eskom’s business needs
changed and grew, migrating the SAP
applications from one server brand to
another was difficult and relatively risky,
and it was clear that a change in thinking
was needed.”
Switch on the power
Faced with the costs and complexity of
the mixed platforms, the Eskom team
reviewed both its acquisition policies
and infrastructure strategy. Working
“With virtualization
on the IBM Power
platform, we can
consider the total
compute capacity, and
reassign resources or
even shift applications
within the existing
physical estate at no
risk... With this IT
Simplification solution
from IBM, we can
achieve much more with
a more compact and
efficient infrastructure.”
Sudash Raghubir, Infrastructure Advisor,
Eskom
Eskom of South Africa is one of the
global top ten utilities, measured by
generation capacity. The company
generates some 95 percent of
electricity used in South Africa, sold
to more than 4.3 million customers.
Eskom employs 37,857 people, and
devotes R823 million ($110 million) to
training from total annual revenues of
R53.8 billion ($7.2 billion).
The company relies on SAP
applications to help run this diverse
business, from financial controls
through to employee payroll
and attendance. During times of
economic uncertainty, reporting
on every aspect of business
performance was of increasing
importance. In particular, managing
37,857 people and their pay was a
demanding task, based on paper
processes and on isolated local
systems.
Over time, many of Eskom’s SAP
and other business systems had
been implemented on different
hardware platforms. Collecting data
from different systems, checking
and integrating it before being able
to produce meaningful and reliable
results, was causing delays and, in
some cases, inaccuracies.
Sean Maritz, Infrastructure Manager,
comments, “We wanted to speed
up our reporting, which meant
increasing information flow and
improving accuracy. It was clear
that SAP applications had the ability
to provide the business information
we needed, from core commercial
operations through to human
resource management. Once we had
decided to implement SAP solutions,
we turned to the choice of hardware
platform. We wanted infrastructure
that would provide a long-term
solution for a growing business, able
to respond to changing workload at
competitive commercial terms.

3. with its technology business partner,
TCM of South Africa, Eskom planned to
standardize on one platform for the SAP
landscape.
The initial aim was to make it easier
to migrate applications to more
powerful servers as the workload grew.
Developing the logical argument, TCM
made the case to use virtualization to
allow several applications to run on each
physical system, and allocate resources
according to business requirements
rather than move applications to other
servers – reducing the business risk.
Eskom originally implemented two
IBM Power 595 servers at its primary
data center, and a single Power 595
at a secondary center. This footprint
was subsequently expanded with an
additional server at each location. TCM
provided implementation, configuration
and commissioning as well as ongoing
support and maintenance contracts.
Eskom has divided its production
servers into multiple logical partitions
(LPARs), in effect providing more than
20 separate virtual servers for the SAP
applications. For example, several
instances of SAP ERP Human Capital
Management run on each server,
allocated a share of the total processors
available. If the workload increases,
then additional CPU resources can
be allocated as required. Additionally,
resources, such as additional memory
or CPU, can be added to virtual servers
during production, with no service
interruption.
The second data center acts as a
backup and disaster recovery solution,
with the servers divided into multiple
LPARs reflecting the production servers’
LPARs. Less important applications are
assigned a restricted CPU total, and
business-critical applications continue
without interruption. This functionality is
provided by IBM’s virtualization, Virtual
IO and dynamic LPAR functionality,
providing almost instantaneous, hands
off allocation of Disaster recovery
partitions to systems that require them.
For the duration of the Disaster, non
production partitions are scaled back,
in line with business rules defined as
part of the system scoping exercise.
IBM, IBM Business Partner TCM and
ESKOM Corporate IT worked closely
with ESKOM’s Audit division, to ensure
that the DR profiles and functionally
match and satisfy the Corporate DR
standards.
Sudash Raghubir, Infrastructure
Advisor, remarks, “Running
applications on a one-per-server basis
tends to encourage you to buy over-
size equipment to allow for expansion,
which absorbs capital. With limited
headroom on each physical machine,
realistically you are only able to plan a
year in advance.
“With virtualization on the IBM Power
platform, we can consider the total
compute capacity, and reassign
resources or even shift applications
within the existing physical estate
at no risk. This gives us a planning
horizon of around five years, with much
lower need to refresh the physical
infrastructure and hence reduced
capital expenditure. With this IT
Simplification solution from IBM, we
can achieve much more with a more
compact and efficient infrastructure.”
Sean Maritz explains: “The IBM Power
595 platform offers virtualization
capabilities and resilience that we
could not obtain on other systems.
For Eskom, this ensures continued
operations for business-critical
applications at commercially attractive
rates.”
Eskom has deployed IBM System
Storage DS8100 systems for
information storage, with 23.2TB and
35TB at the production and backup
sites, respectively.
“From a strategy point
of view, we view
infrastructure as a
service, to be provided to
meet the business needs.
The IBM approach is
exactly in line with that
thinking, simplifying
the infrastructure and
providing dynamic
delivery of the required
services to the Eskom
business units at
reduced costs and better
quality.”
Sean Maritz, Infrastructure Manager, Eskom
TECHNICAL LANDSCAPE
Servers: IBM Power 595 with IBM
POWER5+ and POWER6 processors,
replacing HP, Sun Microsystems and
Dell hardware. IBM System Storage
DS8100 replacing EMC Clarion
Storage.
Software: IBM AIX, IBM Tivoli Storage
Manager, SAP Industry Solution for
Insurance, SAP ERP applications,
including financials, SAP Supplier
Relationship Management, SAP
Customer Relationship Management,
SAP ERP Human Capital
Management, SAP NetWeaver Portal,
Oracle

4. SPC03299-ZAEN-00 (January 2011)
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Sean Maritz explains: “The DS8100
provides reliable, centralized storage
that removes the need for costly and
inefficient direct-attached disks.
The business benefit is simpler
administration, and lower costs per
gigabyte.”
Next generation capabilities
Eskom is migrating its four principal
SAP instances from legacy systems
to a single, centralized Platform
on IBM Power 595. This approach
reduces complexity, eliminates the
slow, manual data collection and
consolidation process, and cuts the
likelihood of errors when preparing
monthly and annual reports.
Additionally, the IBM Power platform
allows Eskom to introduce new and
expand its SAP solutions exactly as
the business requires, without the
business risk of migrating from server
to server. Existing CPU capacity can
be allocated according to need, or
total CPU capacity can be increased
on the Power 595 servers.
Sean Maritz explains: “The Human
Capital Management capabilities
are already proving a great success,
and, using SAP NetWeaver Portal,
employees can now access essential
payroll, time and attendance, training
and other information, wherever they
are.”
Make the right connections
In planning its strategic move to the
IBM Power platform, Eskom reviewed
the hardware capabilities, the long-
term roadmap for the technology, and
the business assistance available from
possible vendors.
Sudash Raghubir comments, “The
can-do attitude demonstrated by
IBM was very important, showing us
a positive willingness to assist. TCM
provided the local technical support
and implementation services, backed
by the global resources available
through the IBM connection.”
The flexible IT landscape based on
the virtualization capabilities of the
IBM Power platform reduces the
effort and downtime associated with
re-allocating applications across
different servers. The disaster recovery
resources can also be used for
development and quality assurance,
providing a 70 percent reduction
in the size of the “non-production”
footprint with associated reduction
in floor space, power, cooling and
depreciation costs.
Automation of disaster recovery
provisioning provides “hands off”
capability, replacing a manual process
that had a 96-hour recovery time with
a solution that now has an “instant on”
capability. Virtualization allows rapid
provision of development and quality
assurance resources On Demand, and
reduces lead time on development
and quality assurance projects by
up to six months, providing quicker
response to business requirements,
Sean Maritz concludes, “From
a strategy point of view, we view
infrastructure as a service, to be
provided to meet the business needs.
The IBM approach is exactly in line
with that thinking, simplifying the
infrastructure and providing dynamic
delivery of the required services to
the Eskom business units at reduced
costs and better quality. At Eskom we
are confident that we chose the right
platform in IBM to support our SAP
solutions.”