Skip to content
SAP S4HANA for oil and gas
6 min read

SAP S/4 HANA for Oil and Gas Industry

Digital transformations have only increased in urgency. This is especially true after the COVID-19 pandemic accelerated the need for businesses to adapt to continuously deliver value to customers. With tighter budgets, many SAP customers have responded to these changing circumstances with increased conviction to leverage their existing ERP investments. These cost-effective decisions are believed to continue to propel success and drive the adoption they are looking for.   

In the case of one Calgary-based energy company, their intent was to drive where they wanted to go and get better, more scalable standardization across all their business processes including procurement. The team had already done quite a bit of work outlining a digital framework for all those items, including having a modern workplace, making sure they had data that could be understood and leveraged in the future, and trying to rationalize applications. All with the intent to determine how to innovate effectively in the future. 

Make the Most of Your Investment  

The team went live on S/4HANA in 2019, taking a brownfield approach to upgrade from ECC. Now they can run BPC embedded right in S/4, GRC embedded, MoC, SAC and BW4/HANA for all reporting, with PPM going live soon, and have started to see more team members get on board with SAP tools. 

The project was deemed challenging but produced many valuable lessons, especially from a process perspective, where team members began to buy into the priority vendor approach. This approach can be defined as leveraging the partners they already have relationships with.  

When considering this improvement, one of the team members, Kyle shares, “we're pushing things out more quickly, and people understand why we're doing it. We've reduced the number of interfaces and have been able to get all our data into the same place, so it's easy to access. This is all setting the foundation to do a lot of things we haven't done previously.” As the team becomes more well versed in these tools, small additions are believed to continue to propel the team forward as they look at the supply chain and HR functionality within SAP

With so many existing tools with extensive capabilities, it is only fitting that efforts be made to make the most of the tools already being paid for. Kyle from the pipeline company shares that, “at the beginning, we used so little SAP and had a whole variety of systems that we were trying to interface and pull data from. It was a real struggle.” When they began to chip away at those systems and consolidate, internal processes saw significant improvement. How so? The team continues to attribute its success to the fact they aren’t dumping data in a variety of different spot solutions to be found and sorted through later. Instead, they’re asking, "why can't this work in the system we already have?"  

Define a Transformation That Will Withstand a Changing Environment  

Despite changing circumstances around COVID-19, the Calgary-based company shares that they will stick to their existing business transformation strategy that was determined previously. The company had already intended to equip their team to work anytime, anywhere, and with any device. They had also already begun to follow SAP's lead in becoming a cloud-first company, which was reflected in their investments. It was through the events at the start of the COVID-19 pandemic that the team was able to step back and reflect on what needed to be completed first and work towards achieving these priorities.  

In Kyle’s words, this approach helped them determine that they were using the “right products and not just listening to the loudest person in the room.” By following this strategy, the team was able to prioritize and complete key initiatives faster. This freed up time to complete other projects that had been pushed to the back burner, including a systems upgrade and other digital transformation efforts. Making these adjustments now will ensure the company is equipped for success when things begin to pick back up again.  

Taking the first steps toward the cloud provided this team with the ability to scale up infrastructure whenever they needed to and set them up for success if circumstances change suddenly. The team shares that while most people recommended a greenfield implementation, they were happy with their choice to upgrade to S/4HANA using an incremental brownfield approach.  

Focus on Driving Adoption 

When determining priorities, business leaders are encouraged to optimize the processes the team will get the most out of. This means selecting a business case, calculating the expected return, and weighing these calculated totals for all proposed projects against each other. Driving adoption is one of the most effective methods to prove the return on investment and is believed to be one of the key differentiators between those that are driving something and having it stick and those that are driving something and having it tumble down the hill. Furthermore, it is also unwise to over-invest in something without having some certainty that adoption is going to follow. There is now a shorter time horizon for realizing the return on investment, and greater emphasis on making sure that people are going to be able to adopt the change.  

This is where many IT teams try to figure out how to do it themselves. But the best ideas within a larger organization are not built in a garage without talking to people. Teams should be encouraged to take an outside perspective on their business and talk to team members about what they are finding time-consuming—even encouraging them to share possibilities of solutions that they believe would make their day jobs more manageable. A good SAP partner can help to show them what can be done to streamline processes and make things easier so that they can start imagining a different approach or a different go-to-market strategy. That's difficult, if not impossible, to do in isolation from the business.  

Teams can be successful when asking, "where can we begin to pull waste out of that process that is not supporting our team?" Often that waste is in places where people have become so accustomed to doing it the way they do today that they forget to look for ways to improve. Often, data is sliced up across different teams, different people, and different transactions in earlier versions of tools. Therefore, finding the opportunities to collapse things down and give people a situation where they see problems highlighted and are presented with a clear path to address those problems are key steps to improvement. That starts to drive a fundamental case for where organizations will get a return on investment.  

Make Frugal Choices 

If you don’t have the right expertise for your integration internally, seeking out a systems integrator will be a worthwhile investment. However, by doing so it is not unheard of to see a quote for $20 million. Most companies can't afford this anymore. Therefore, investigation into cost-effective ways to carry out these investments either through incremental changes or reusing existing infrastructure or licenses can help to present the positive return the investment will bring in a better light.  

The Oil & Gas company recognized that they had not taken Fiori as far as they could. To continue balancing frugally innovative options, the ConvergentIS team can help teams in their digital transformation by providing out-of-the-box solutions to standard business processes. With extensive experience across the Energy industry, the team can offer industry-specific perspective on making the most of your business’ SAP investment. 

To learn more about procurement optimization opportunities, we encourage you to download our free guide.


Organizational Hero-3