Recently, SAP's user group hosted a conference entitled "Sustainability for the New Energy Era," for the software company's utilities customers. Much like SAP's annual Sapphire event (you can read my take on last year's gathering here), it brings together technical people who want to talk about implementing the software for their business.

For most IT departments, implementing a large system like SAP goes hand-in-hand with changing business processes and streamlining how your business operates. In fact, when enterprise resource planning (ERP) was the New New Thing in the late 1980s and early 1990s, it seemed as if every company undertook business process re-engineering.

In many of the industries where SAP delivers solutions, the best practices are now fairly well-defined. Companies understand how the software will help them run their business. But things aren't as simple for energy utilities. According to Al Fohrer, chairman and CEO of Southern California Edison, there will be "as much change in the next 10 years as they've seen in the previous 120."

As I talked with a number of utility executives and industry advisors, what emerged is that no one seems to really know what that change is going to be, but they all believe it will happen. That's creating an excitement in the industry that probably hasn't existed since, well, Thomas Edison. Think about how the telecommunications industry or television has changed in the last 20 years -- both technology and biz models -- and then multiply that by 10 and you'll begin to understand the potential scale of change for utilities.

The Gap That's Driving Transformation

Prognosticating is a tricky business. As smart as Edison was, he predicted the primary form of electricity generation would be solar. Southern California Edison's Fohrer succinctly described the historical perspective of the utility industry as follows: "Electricity flowed in one direction, we read a meter once a month and sent you a bill." That, he contends, will no longer be a relevant description in the future. But what is behind this anticipation of change?