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Case Study

 

VINCI Energies Becomes “Future Ready” with 10-Month Program to Innovate with SAP S/4HANA

by Lauren Bonneau, Senior Editor, SAPinsider | SAPinsider, Volume 20, Issue 1

February 26, 2019

VINCI Energies P1 main image

Due to its aggressive acquisition strategy, professional services company VINCI Energies – which has already grown to 77,500 employees spread throughout more than 1,000 global companies – needed an updated ERP program and IT strategy to integrate its new companies into the fold as quickly and easily as possible. To accomplish this, the business decided to consolidate on a single-instance environment with over 30,000 users running on SAP S/4HANA. Learn how VINCI Energies underwent a 10-month project that culminated in a migration over the weekend that imparted some valuable lessons. With 14 countries live so far and plans to deploy it universally, uncover the benefits the business is already reaping from the capabilities that SAP S/4HANA has introduced and innovating with SAP Cloud Platform, SAP C/4HANA, and more intelligent reporting and analytics.

VINCI Energies is different from other companies in the energy industry in that it doesn’t produce energy, nor any other product for that matter. The project-based business is a professional services company offering support and expertise to customers in more than 53 countries in the areas of energy and transport infrastructure, industrial performance, smart and sustainable building solutions, and telecommunications services.

A child company of VINCI S.A., the largest construction company in the world by revenue (€43.5 billion), VINCI Energies itself is responsible for more than a third of that annual turnover. Currently a €12.6 billion company — the business has more than tripled its returns in the last decade. This growth was due to a host of acquisitions between 2014 and 2018 that expanded its global footprint to a network of more than 1,000 companies delivering services to a strong diversity of customers through approximately half a million projects each year.

“VINCI Energies is a growing company with an extremely aggressive external acquisition strategy currently operating with 77,500 employees around the globe,” says Dominique Tessaro, the company’s CIO. “Every new company purchased meant bringing on a new ERP system. In 2014, we decided to build a new ERP program and IT strategy so we could integrate the new companies into our VINCI Energies world as quickly and easily as possible.”

VINCI Energies P1 image

Instead of having a decentralized solution where each business unit managed projects in its own fashion, VINCI Energies wanted to consolidate onto one global system with one version of the truth. “In our industry, it’s very important to have a clear vision of the financial and project numbers of each business unit, and for each unit to be built the same way and share the same definitions,” Tessaro says. “We decided to build a unique single-instance SAP system with one database for customers and suppliers and one chart of accounts all over the world. Currently, we have over 30,000 users running on a single SAP client. We have already rolled out SAP S/4HANA in 14 countries, with plans to deploy it globally.”

The Journey to a Single SAP Instance

Back in 2014, when VINCI Energies first decided to undergo its SAP transformation, it was running more than 15 various ERP applications, including different versions and instances of SAP ERP as well as non-SAP ERP systems. In addition, there were more than 150 applications connecting to these various ERP systems. When considering the software to consolidate on, the business narrowed down the selection to two choices and looked at the product roadmap for both. According to Tessaro, SAP’s roadmap was the clear winner. “I’ve been working with SAP software for almost 25 years now, starting back on SAP R/2, and the SAP S/4HANA concept really spoke to me. I understand the value behind reducing the number of ERP systems, and I think the in-memory solution was a key move that will deliver a lot of business value,” he says. “It was in my mind since the beginning of this project that we would end up migrating to SAP S/4HANA to speed up the innovation in VINCI Energies.”

However, the business took a pragmatic approach to the adoption of SAP S/4HANA. The first step of the journey was to upgrade its existing SAP ERP 6.0 environment with the new general ledger functions, which is a pre-requisite to move to SAP HANA. In 2015, VINCI Energies migrated its SAP ERP system data to SAP Business Suite on SAP HANA. Immediately, the business users noticed improved system performance. “We have about 1,500 concurrent users transacting on our platform, and we when migrated to Suite on HANA, the average response time for these user transactions reduced by 30% (from .9 seconds to .6 seconds). The compression and memory really played its role, and we were happy with the strong improvement.”

At the same time VINCI Energies was deploying SAP Business Suite on SAP HANA in many countries across different business units, it began to start work on the technical migration to SAP S/4HANA. “We wanted to enable new technology to run the business without limits and be ready for the future,” says Tessaro. “We were convinced that to create more business innovation and have a competitive advantage, we would have to migrate to SAP S/4HANA.”

To undertake the SAP S/4HANA migration, the IT team at VINCI Energies supplemented its internal resources with help from SAP consultants and a third-party implementation partner. In 2016, the project team tested the 1511 version of SAP S/4HANA and, due to some technical issues with the migration path, decided to postpone the migration for a year to wait for the bugs to be worked out. One year later, the team performed a successful test with the 1610 version — and ultimately decided to select the more mature 1709 version, which required several technical pre-requisites (such as upgrading to SAP HANA 2.0, SAP Enterprise Portal 7.5, and SAP Fiori 3.0).

The 10-month project kicked off in October 2017 and involved approximately 4,000 person-days, culminating in a go-live the last weekend in July 2018. “Now that we are a single-client SAP shop, we had to do the migration for all the 600 companies that were running on our SAP system in 11 countries in one weekend,” says Tessaro. “Because it was such a big-boned project, we were happy to have SAP on board from a very early stage with strong technical and program management skills as well as strong support from SAP in Walldorf.”


Tessaro VINCI Energies

 

In 2014, we decided to build a new ERP program and IT strategy so we could integrate the new companies into our VINCI Energies world as quickly and easily as possible.

— Dominique Tessaro, CIO, VINCI Energies

While the migration was a success, the journey to SAP S/4HANA had some difficulties for VINCI Energies to overcome, according to Tessaro. (For some insights regarding the migration details, refer to the “7 Lessons Learned” sidebar at the end of the article.) “After a few weeks of post-migration stabilization, we are now live, running well and smoothly, and I’m a happy customer,” he says. “We have completed a successful year-end closure in December without any major issues, and we can do so much with this solution that my team is now busy thinking about all the new and interesting things we want to deliver to the business.”

Innovating with SAP Cloud Platform, SAP C/4HANA, and Intelligent Analytics

In addition to the desired results of getting acquired companies up and running faster, having one version of the truth, and operating with one single-instance ERP system, VINCI Energies is also seeing many benefits due to the capabilities that SAP S/4HANA has introduced. “Now that we have migrated to SAP S/4HANA, we are starting in 2019 our innovation agenda with the business,” says Tessaro. “We have embedded analytics we are excited about, we are integrating SAP Analytics Cloud in SAP S/4HANA (we will have deployed this pretty largely within the business by March 2019), and we have lots of new SAP Fiori apps available to us that we want to deploy.”

The business has already been able to achieve great improvements around reporting and analytics. Instead of users implementing various business intelligence (BI) tools, they can build personal reports using embedded analytics on their local dashboards to analyze trends. The business is also looking into connecting SAP Analytics Cloud directly to SAP S/4HANA to provide some more advanced reports that are fed from the SAP system and other data sources as well. According to Tessaro, quarterly reports are delivered 60x faster and built-in BI capabilities provide for real-time analysis never possible before. “Business users can access the system in real time without having to extract data and waste time connecting the information to another solution on top of that,” he says. “And because the data remains in the SAP system instead of being sent elsewhere, users have more control of the data and therefore less risk.”

Along with this real-time reporting being delivered, VINCI Energies is incrementally rolling out new solutions as a result of the SAP S/4HANA innovations — providing a new user experience and mobile capabilities. New applications developed on SAP Cloud Platform will be rolled out to users — of which, the first pilot application for timesheet entry has been successfully deployed. (See the companion piece immediately following this article for more information on this application.)

VINCI Energies has also connected its SAP S/4HANA platform with SAP C/4HANA to extend functionality and deliver new business scenarios for the maintenance side of the business. “We want our field workers and managers to be able to better control the planning and ticketing processes for equipment maintenance,” says Tessaro. “Extending SAP S/4HANA together with SAP C/4HANA, we are starting to see value, and we are going to expand this solution and definitely focus on deploying more SAP C/4HANA throughout the business.”

Also, the IT team is testing the SAP Leonardo portfolio to automate the accounts receivable clearing process for incoming payments from customers. “Even with the new SAP functionality to help make this financial data clearing, unfortunately, this is a very manual task with a lot of time wasted,” says Tessaro. “So extending SAP S/4HANA with SAP Leonardo in this small way will eliminate a couple of hours of work for our 1,800 business unit or local finance managers, which will save us a lot of money at the end of the day.”

The business is also in the early phases of testing out some new Internet of Things (IoT), robotic process automation (RPA), and artificial intelligence (AI) technology — including a small test of SAP CoPilot, which is a digital assistant that uses an AI chatbot to help users communicate with software. “SAP CoPilot is the new frontier for the ERP system,” says Tessaro. “Voice is everywhere, and people want to use it now to make requests of the system rather than having to type it in the keyboard. That is something we need to start investigating — not necessarily to implement in 2019 — but at least to learn how it works so we can best convey its value to the business.”

 
7 Lessons Learned from VINCI Energies’ SAP S/4HANA Migration

Communicate realistic system-performance expectations: “We got a boost in performance when we went to SAP Business Suite on SAP HANA. Then, when we went to SAP S/4HANA, the performance wasn’t as good, which surprised us. We investigated and found that we needed to redesign our old reports to fit the new SAP S/4HANA data model,” Tessaro says. “All of the reports you developed on SAP ERP 6.0 will still work on SAP S/4HANA, but to see performance improvements requires a lot of rework on some reports to develop them on the new data model. So be careful when communicating this — and don’t underestimate the challenges of deploying the new data model.”

Anticipate a big effort to clean finance table inconsistencies: “In SAP ERP 6.0, your financial and controlling tables are separate and sometimes there are discrepancies between a line item and the sum of the aggregates in the Controlling module, for example, but when you move to SAP S/4HANA, everything will be in one single table, and you cannot have any more discrepancies,” he says. “Before migrating to SAP S/4HANA, you run the SAP S/4HANA migration cockpit where functionality checks all the financial data open items in the system, which can generate a lot of migration errors for various reasons. The cockpit uncovered nearly 44,000 open items that needed to be resolved, and we worked with SAP Consulting and the SAP Customer Care Program to go through each error. After three weeks, all the errors that impacted the business were corrected — the remaining ones (under 300) were not important because they originated from inactive company codes — and we had the green light to migrate our SAP S/4HANA.”

Train your internal staff in advance: “If you are considering a migration from SAP ERP to SAP S/4HANA — you have to prepare yourself way in advance,” he says. “Train your internal staff on how SAP S/4HANA is built because it is completely different from how SAP ERP worked previously. When training your team, it’s important that some of the members have strong technical skills because implementing SAP Fiori and SAP S/4HANA involves changing quite a large number of technical parameters.”

Choose your partner wisely: “We chose SAP Digital Business Services as our main partner to work with us to implement this solution. The consultants were very professional in managing all the issues that arose and worked very hard with Walldorf and the development team to support us,” he says. “We had faith in this program and expected errors, problems, and small issues, but we were always able to recover quickly, find a solution to overcome the problem, and move on.”

Don’t oversell the ROI to the business: “Focus first on the technical migration, and then try to do the business process improvements and re-engineering,” he says. “Don’t push too far with trying to put all the new fancy SAP S/4HANA capabilities into your migration process. Get the technical migration done, and then you can work on delivering new functions for the business afterward.”

Practice, practice, practice: “Completing the migration tasks involves an incredible amount of hard work. It is very important to do five, six, or seven dry runs before the migration so you can be prepared for unexpected errors that may happen,” he says. “We were able to perform our migration and have our ERP system closed and shutdown in three days, and I cannot say how proud I am of my team for what they were able to deliver during those days.”

After you go live, it’s not over: “We spent almost three weeks after go-live managing a lot of small technical errors we discovered that we had not anticipated,” he says. “Don’t think that Monday morning, once you are live, it’s over and the program is finished. It’s not. It’s important to still have a strong team mobilized because you might have more weeks of retooling your production environment.”

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