While the most important focus for Surgutneftegas is drilling, extracting, and refining oil into petroleum products, the IT department at the Russian oil and natural gas producing giant plays a crucial supporting role — assisting the business with everything that enables those main objectives, including capital construction, transport services, and well repair.
“Our company is always innovative not only in IT, but also in other areas, such as oil well drilling and any technology used for the extraction process,” says Rinat Gimranov, CIO of Surgutneftegas. “This is a deliberate approach of executive management — to identify and explore the latest innovations, including those in information technology.”
Gimranov, who functions as head of information technologies at Surgutneftegas, doesn’t perform what might be considered the “classic” role of CIO. Although he is responsible for implementing and supporting the business’s IT solutions, his focus is more on innovation and seeking out new and exciting functionality. It was over 15 years ago that Surgutneftegas first implemented an SAP solution. Today, according to Gimranov, most of the IT projects on the horizon for 2012 are connected in one way or another to what the business is doing with SAP technology.
The most recent project that Gimranov directed and managed was a proof of concept (POC) for a pilot implementation of SAP HANA, SAP’s offering for in-memory computing and analysis. While this functionality is not yet in production, the final phases of the POC are under way to prepare the solution for commercial operation — and the benefits stemming from real-time analytics and reporting are already apparent.
The Importance of Real Time
Over the past several years, Surgutneftegas has encountered longstanding problems related to the processing of business information. For example, extracting data and loading it into SAP NetWeaver Business Warehouse (SAP NetWeaver BW) could sometimes take 12-15 hours, with an additional 15-40 minutes for users to run reports.
“When I saw a theoretical article from Hasso Plattner on in-memory technology, I immediately realized that it would help us solve our problems related to extracting and processing large amounts of data,” says Gimranov. “So when this functionality was introduced as a specific solution, SAP HANA, I was eager to become an early adopter as soon as the product was available.”
Once the decision was made to become a ramp-up customer, Surgutneftegas set three specific goals for its pilot of SAP HANA:
- Receive actual real-time data every 1-2 hours during a day.
- Save data for analysis to SAP NetWeaver BW once a week at a scheduled time.
- Store data at one closing period, with a firm cutoff time for analysis.
Faster reporting has a direct influence on business user activities. Imagine reducing the time it takes to run reports from two hours to six seconds and what that could mean for employee productivity alone. On the development side, there are time savings as well. “Our reporting is very unique and involves difficult business logic — such as special reports with elaborate tables and an enormous amount of data that is difficult to move — and what we do on SAP HANA will allow us to speed up report generation,” Gimranov says.
What Reports to Start With?
At the beginning of the POC, the project team spent time researching business areas that required improvements in data processing. The idea was to try out the software with analytics calculated for a large volume of data — 200 million rows’ worth, to be precise. Based on a number of criteria, the team chose the area of materials management and set a goal to get reports on materials in seconds. “We wanted to do everything shown: Blink, and receive the report,” says Gimranov.
Previously, instant updates or reports on the stock of materials were impossible. For example, analyzing one month of historical data could take 10 hours to load the data from the materials management functionality in the ERP back end. And then, it could take another two hours for the calculation to be performed in SAP NetWeaver BW, and 10-20 seconds to refresh with the SAP Business Explorer front-end tool.
In selecting materials data as the scenario for the POC, the business laid out three main analysis objectives:
- Gather information about the quantitative valuation and costs of stock in Surgutneftegas warehouses at a certain time (for example, at the end of the month).
- Break down the data into these categories: factories, warehouses, supplies, parties, ledger accounts, and activities of use.
- Receive operative data from the back-end ERP system on the first day of each month.
During the POC, it became clear that there would be certain issues that would continue to happen on a regular basis. Surgutneftegas decided to create a central base — an innovation hub where experts could gather every three weeks to discuss specific issues and define plans of action.
Overcoming the Challenges of Being an Early Adopter
The most important success factor for Surgutneftegas in the project was the cooperation of the team through work in the innovation hub and collaboration with SAP. “To get basic in-memory training, our experts participated in deep-dive workshops along with a team of specialists from SAP, and we sent our experts to Walldorf twice, for two weeks each time, to work together with the SAP development team,” says Gimranov.
The biggest challenge the team encountered, according to Gimranov, was that the SAP HANA product continually changed. There were more than 20 updates to the in-memory appliance during the project. But because the team expected these changes and collaborated so closely with SAP, they were able to work through them with minimal disruption.
Another challenging factor related to the internal systems at Surgutneftegas. The business runs the SAP R/3 system, which does not support Unicode and doesn’t work directly with some elements of SAP HANA, such as table synchronization. “To deal with the difficulties associated with transmitting data from older systems, we installed the System Landscape Transformation tool (SLT), which worked out well and solved our problems.”
Benefits of In-Memory Analytics
Many advantages were brought to light through the POC of the materials data. First and foremost, processing speed is the most concrete. For example, with SAP HANA in place, the business can now run stock of material reports in 10-30 seconds, and it only takes 15 minutes to extract a year’s worth of materials data. “This was an exponential change, and it is measured and confirmed by statistics today,” Gimranov says. “Previously, a user working in SAP R/3 would request a standard report, which could be hundreds of pages long, and receive it within 40 minutes. Now, when he or she makes a new request for the report, it produces in 6-8 seconds with SAP HANA. And most of these seconds is spent on visualization, not calculating the report.”
The second advantage is that the technology brings significant advances in analysis. “For example, previously, we couldn’t analyze this huge database of materials by the group of the material or by the group of the stores, because the report would involve a complicated process or require a ton of resources,” he says. “Today, we can type in three letters of the name of the material, like in Google Search, and receive the list of materials.”
Another major advantage of the SAP HANA project is an improved and simplified infrastructure. Surgutneftegas has a huge landscape with many processors and lots of memory. Moving to in-memory means smaller, simpler, and more reliable servers. “This technological breakthrough makes it possible to reduce investment in infrastructure by simplifying the landscape,” says Gimranov.
Finally, user acceptance of the new technology is a non-issue because the underlying functionality is virtually invisible to the user. “There was no negative feedback about the technology and no new training required. Users work in the system just as they did before,” he says. “It’s not like one system is being replaced with another. We have simply set up a system that can provide reports hundreds of times faster.”
Future Plans for SAP HANA
As a result of the completed proof of concept, Surgutneftegas has decided that as soon as the solution goes into the production landscape, all new analysis across all directions of the company will be made on SAP HANA. This year, all the data in SAP NetWeaver BW will be migrated to SAP HANA. Also, all operational reporting from the ERP systems will be done in SAP HANA.
“With the SLT tool, we can take any table to SAP HANA and write a report. It will be quick and efficient,” Gimranov says. “From what we’ve observed in the proof of concept thus far, these changes are real. If you estimate how much we have invested in SAP HANA or in old technology, there will be an undoubted advantage for SAP HANA. These investments will come back very quickly.”