African enterprises seeking to scale into new markets and build new capabilities need access to accurate real-time data about the total performance of the business. For one of Nigeria’s renewable energy providers, a reliance on outdated systems led to inefficiencies that were stifling growth.
“The value proposition for renewables has strengthened significantly over the past year in our market, creating a substantial opportunity for our business to scale,” says James Fabola, chief financial officer at Arnergy. “However, our existing systems could no longer support accurate and effective decision-making. We made a strategic decision to undergo a digital transformation process to build new capabilities that could support our business into the future.”
Arnergy is a = cleantech company that provides sustainable solutions to energy reliability issues across emerging market. The company is headquartered in Lagos, Nigeria, and offers sustainable solar solutions tailored to address pressing energy needs and deliver reliable power to residential and commercial energy users.
Renewable energy is receiving unprecedented attention in Nigeria following the government’s decision to remove favourable fuel subsidies in H2 2023 and the subsequent increase in the electricity Band A tariffs from NGN 68/kWh to NGN 225/kWh in Q2 2024. This has led to a rapid escalation in the price of petrol and diesel, which generates 80% of power in the country.
“The four-fold increase in fuel prices over the past year has strengthened the value proposition for renewable energy in Nigeria,” says Fabola. “Anecdotal evidence from our customers indicates that 40% to 60% of their operating expenses now go toward energy costs, and for some companies energy costs have even outstripped revenue. The result is renewed interest in affordable, clean energy solutions.”
Fabola notes that, where the upfront capital outlay for solar was a deterrent a few years ago, today customers can achieve cost-savings from day one. “This new market dynamic has created a huge opportunity for scaling clean energy solutions across our region and help achieve energy security while accelerating the transition to Net Zero.”
Arnergy chose GROW with SAP for Scaleups S/4HANA Cloud for its technology needs and identified a suitable implementation partner to support the deployment and integration.
Abiola Folawewo, managing partner at ACED Consulting, which holds extensive experience with SAP deployments for customers in a range of industries throughout West Africa, says: “We initiated the project by conducting a visioning session which included active engagement from the Arnergy leadership team, including the CEO, CFO and other key stakeholders.
“We assessed Arnergy’s business model, taking into consideration its value-creation model, the profit model, and the logic that connects both. This afforded us a deep understanding of the business drivers of the project.”
Fabola adds: “As a business we are seeking to diversify and collaborate with other key industry players, but our systems were not optimised. By relying on several systems running concurrent processes, we experienced inefficiency in our decision-making capabilities, which had an outsized impact on our ability to execute our business strategy. For example, data about our financial performance was only available up to a month later, which limited our agility.”
The implementation team leveraged the SAP Activate methodology which includes a comprehensive change management process. Folawewo says this included identifying change agents within the business who would be influential in driving adoption of new capabilities.
“We also provided regular communication about new functionality, benefits, productivity boosts and efficiency gains. By constantly communicating the beneficial outcomes of the implementation, we can ensure there is healthy uptake of the new capabilities, further supporting Arnergy’s business objectives.”
Razvan Barsan, SAP senior account executive supporting the Arnergy digital transformation project, notes the strong spirit of collaboration with the customer team. “From day one we’ve had great buy-in and involvement by the leadership team, who helped communicate a compelling case for adoption within the business to ensure employees leverage the powerful new capabilities introduced by the digital transformation project.”
Fabola adds: “It was also critical for us to fix problems before we scale, lest we replicate issues in other areas of the business as we grow. With our new SAP system and the ongoing support of our implementation partners, our business can confidently look at a new phase of growth and scalability that could see us play a central role in West Africa’s transition to cleaner, more reliable energy.”