Two weeks ago, we pub­lished the first part of our con­ver­sa­tion with Umar Farooq, the vice pres­i­dent of infor­ma­tion tech­nol­o­gy at Nex­Ti­er Oil­field Solu­tions to speak about how the orga­ni­za­tion imple­ment­ed SAP S/4HANA dur­ing a merg­er. In this sec­ond part, Umar dis­cuss­es the ben­e­fits of lever­ag­ing the ERP solution. 

ASUG: Why was SAP S/4HANA the best solu­tion to use when merg­ing these two orga­ni­za­tions into NexTier? 

Umar: We went through a very rig­or­ous eval­u­a­tion process between pick­ing SAP S/4HANA as our future sys­tem. Keane Group and C&J Ener­gy Ser­vices had strong sto­ries and good use cas­es in each of those appli­ca­tions and oper­at­ing in the most effi­cient and nim­ble man­ner. What we looked at from our per­spec­tive were growth and scal­a­bil­i­ty. And it’s not just our scal­a­bil­i­ty or growth, but it’s also SAP’s. SAP was mov­ing more towards SAP S/4HANA and adding more com­po­nents and addi­tion­al func­tion­al­i­ties that we know we could lever­age as we move for­ward. Look­ing at the strate­gic ini­tia­tives that we had and look­ing at our growth tra­jec­to­ry, we felt SAP S/4HANA was the right plat­form for us to grow on.

The redesign was impor­tant to us. It was also impor­tant for us to share with our stake­hold­ers, espe­cial­ly the supe­rusers of the sys­tem, that our vision was not to start from scratch because we knew there was a foun­da­tion that was laid out in SAP S/4HANA by C&J Ener­gy Ser­vices that would work for the future com­pa­ny. How­ev­er, there were cer­tain process­es that we want­ed to focus on to make them more fit for pur­pose. Those were pri­mar­i­ly in our sup­ply chain orga­ni­za­tion. Exam­ples include the way we want­ed to oper­ate and the way we want­ed to inte­grate with our ven­dors. Those were some key areas that we focused on dur­ing that redesign effort. As with any imple­men­ta­tion that would go through a merg­er, acqui­si­tion, or redesign our biggest focus was data — all the data that we have com­ing in from dif­fer­ent streams when it comes to cus­tomers, ven­dors, prod­ucts, and pric­ing. We went through a very rig­or­ous exer­cise to stream­line that data so that we could have the most effi­cient way of pro­cess­ing our trans­ac­tions as we move forward. 

ASUG: Are you all on-prem or in the cloud? 

Umar: We have an on-prem ver­sion of SAP S/4HANA, ver­sion 1709. 

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ASUG: Why did you all decide to go with an on-prem as opposed to a cloud deployment?

Umar: It’s just because of how the con­tracts were set up with SAP at the time. It is an on-prem ver­sion, but it is host­ed in Google Cloud Plat­form (GCP). So, it’s not tru­ly like on-prem like I hold a serv­er in my data cen­ter. It is man­aged by GCP. It’s just the licens­ing is for on-prem. 

ASUG: How has SAP S/4HANA has helped Nex­Ti­er in its day-to-day oper­a­tions since the merger? 

Umar: Once we went through this redesign effort, we still kept the core prin­ci­ple of find­ing the right fit-for-pur­pose tools for the busi­ness. Not all appli­ca­tions and mod­ules in SAP S/4HANA were uti­lized. There were cer­tain third-par­ty appli­ca­tions that we inte­grat­ed with SAP. And to us, that was one big suc­cess sto­ry. When we inte­grat­ed our field tick­et­ing sys­tem, which is Sales­force-based, with SAP. It was a tool that helped the field be more effi­cient in terms of their tick­et man­age­ment, as well as oper­a­tions in the field. The oper­a­tions folks use that tool to its full capac­i­ty, but we were able to inte­grate with SAP. So we did not have an impact on RDS. Our AR was run­ning direct­ly from SAP through inte­gra­tion with Salesforce. 

SAP also helps us with our day-to-day trans­ac­tions. We have stream­lined the process in the way how we oper­ate with our ven­dors. We’re using SAP Open­Text. It helps us get the doc­u­men­ta­tion from our ven­dors on time, get them processed — on time — and then make the pay­ments on time because we’re an offer­ing ser­vices com­pa­ny. Our rela­tion­ships with our cus­tomers are just as good as our rela­tion­ship with our ven­dors. So a lot of that work is done by our third-par­ty part­ners. SAP does help us a lot, espe­cial­ly when it comes to the vis­i­bil­i­ty of pay­ments and sales. 

Where SAP S/4 HANA adds the val­ue for us is around gov­er­nance and con­trols. We’re a pub­licly-trad­ed com­pa­ny and for us, it’s extreme­ly impor­tant that every­thing that we do has a con­trol para­me­ter defined, and it is seg­re­ga­tion of duties and oth­er ele­ments that are part of those trans­ac­tions that we man­age. We work close­ly with our exter­nal third-par­ty audi­tors as well as our inter­nal audit team. That one par­tic­u­lar piece on gov­er­nance and com­pli­ance is a huge val­ue add because we have every­thing doc­u­ment­ed, every­thing has a rule and some type of appli­ca­tion design set behind it. We can always go and do those audit trails if we need­ed. That was one of the big sell­ing fac­tors of SAP S/4HANA com­pared to oth­er tools: we can retain all infor­ma­tion that hap­pened in our sys­tem of records.

ASUG: We’ve touched on the top­ic of data. With that in mind, I’d love to know what spe­cif­ic hur­dles asso­ci­at­ed with the merg­er of these two orga­ni­za­tions into a sin­gle enti­ty did SAP S/4 HANA help you overcome?

Umar: From a sys­tem of records per­spec­tive, the biggest val­ue add of SAP S/4HANA was the fact that even though we had cus­tomers between the two com­pa­nies, it was very easy for us to iden­ti­fy his­to­ry with one ven­dor or anoth­er. That data helped us give insight when we rene­go­ti­at­ed the future terms for Nex­Ti­er. It was a very seam­less process for us. And then the vis­i­bil­i­ty that we get through that data with­in our day-to-day oper­a­tional tasks, as well as reports and oth­er ana­lyt­ics, that’s very powerful.

With us work­ing direct­ly in SAP S/4HANA, every­thing is real-time. It’s not batch job-dri­ven. It’s not like after the fact. Every time I need to go look at some­thing, I can always go look at the lat­est infor­ma­tion for that par­tic­u­lar func­tion. Our AP team and AR team are always trans­act­ing with­in SAP work­ing with our ven­dors and cus­tomers. That’s the val­ue we add as far as our data is con­cerned. We’re not 100% per­fect, but we make a very con­scious effort to keep that data clean.

ASUG: I assume that those val­ue adds that helped you all dur­ing this process. Is that some­thing that you all are count­ing on for any future acqui­si­tions or mergers?

Umar: Absolute­ly. Hav­ing a clean ERP along with a defined process is a great foun­da­tion for any future acqui­si­tions and growth. We put a lot of effort and are proud of the team that works around our ERP appli­ca­tions that make it hap­pen. This is just one of those things where we took a lot of pride in how we oper­at­ed. That helped us nav­i­gate through the pan­dem­ic as well as the down­turn in oil. We are set for any growth over the next few quarters. 

ASUG: What advice would you give to com­pa­nies that are about to enter into an acqui­si­tion or a merg­er and are look­ing for a cen­tral­ized ERP plat­form to help them along with that process?

Umar: One of the things that I always preach is that no detail is small enough for us to con­sid­er and unrav­el. For every­thing we do, we have to do our due dili­gence, val­i­date the data and its source, and make sure we’re mak­ing deci­sions as a col­lab­o­ra­tive team. There are a lot of impli­ca­tions that hap­pen when you are work­ing in a very inte­grat­ed envi­ron­ment. You can’t lose the focus or sight of any deci­sion that you make that would have a trick­le-down or a down­stream impact. It’s extreme­ly impor­tant that you val­i­date the data and have all the right stake­hold­ers involved ear­ly in the process. That would just make every­thing seam­less and work very efficiently.