Driving a complex ERP based transformation in the energy sector

Our customer, a FTSE 100 energy and utilities company, had started their transformation journey to change from their legacy SAP ECC6 ERP system to a cloud-based SAP S/4 HANA instance, enhancing business processes covering Procurement, HR, Finance and Project and Asset Management.

 

The business case for the programme was based on the replacement and standardisation of core processes that had inhibited operational performance and resulted in inefficiencies across the business.

 

The programme had delivered a small, initial release of core functionality to support the legal separation of part of the business from the wider group, however this had not delivered the anticipated improvements and the customer had several areas of concern about the programme.

Challenge

The more complex release 2 was underway for the wider business, alongside extended support for the initial release. However, momentum was slow, issues from the initial release were causing stakeholder confidence issues and there was no defined approach to tackle the changes required to the business areas. Key areas of concern included the quality of the initial process design, execution of testing and the level of business change required. In addition, the programme had just switched systems integrator, and this was causing confusion and further delays.

 

Project One was commissioned by the UK CFO and the Programme Director to undertake an independent assurance review of the programme and make recommendations to improve the organisation and ways of working.

Approach

A small Project One team performed a four-week, independent assurance review of the programme, focusing in on the design of future processes, the approach to business change and the structure of the delivery programme. This involved detailed review of documentation alongside stakeholder review sessions and workshops.

 

The main outcome from the review was agreement to progress a 10-week programme reset, with a Project One assigned programme director working alongside the customer business programme director and CFO. The team worked closely with the existing internal team and other external advisors. With the programme stabilised and re-set, Project One then provided a small team of senior change consultants to undertake key roles within the programme.

 

Project One then spent the next 18 months driving release 2 to a successful implementation, which covered core Finance Project and Asset Management systems capability and the migration of the rest of the company onto the S/4 HANA platform. The roles covered were:

 

  • IT Programme Director, owning the plan and driving all internal and external IT activity, working alongside the customer business programme director.
  • Business change and readiness lead, driving the change to chart of accounts, assessing the impact of change on each business area and then planning and executing this change.
  • User Acceptance test lead, planning and then leading the test team to ensure the business areas accepted the changes required.
  • Cutover manager, covering all of the UK operation, involving agreement of data freezes, planning the payments and cash on a £1.8bn annual purchase ledger and keeping continuity on a £4bn sales ledger.

 

In addition, Project One deployed a consultant to work on the Release 3 design, comprising enhanced Project and Asset Management systems
and Reporting capability. This could be a huge opportunity to make the most of the vendor expertise and research that has gone into developing the ERP products, and to re-organise your business processes around this best practice.

Outcome

After a journey lasting over three years, the customer successfully went live with the SAP S/4 HANA solution. The integrated system suite spans multiple business areas, with a major process transformation to a user base of several thousand individuals.

 

The overall cutover period required a three-week complete outage with remaining cutover activities completed in parallel with a phased business
ramp-up. The final programme budget was over £100m and required incremental cashflow for the outage period to cover early supplier payments, deferred customer billing and collection and tax payments.

 

Project One adding value

 

Project One provided the required independence and expertise for the initial review, enabling a rapid assessment of issues and required resolution. This was followed by an injection of external expertise around major ERP programmes, specifically SAP S/4 HANA, and senior level change and transformation experience to supplement their internal team, manage a complex stakeholder landscape and ensure successful programme delivery.

“I’d just like to say a big thank you to the team from Project One who helped reset our SAP S4/HANA programme. They worked collaboratively across the rest of the internal team and provided support for the IT Programme Director role and the Business Change work. They’ve done a great job.”

CFO
UK

Are you looking for critical business transformation?

Let’s talk real change
Sign up to our eNewsletter

Get the latest news, relevant insights and expertise from our change experts