All companies in the oil and gas industry face the unpredictability of the ups and downs of the commodity markets. The technology team at Canada’s largest drilling rig contractor, Precision Drilling, decided to use a downturn as an opportunity to rebuild its ERP system for the future with a sweeping greenfield SAP S/4HANA implementation.

Since first adopting SAP in 1996, Precision Drilling has grown from a Canadian company into a global corporation that now runs operations in North America and the Middle East. Company leaders recognized that they needed to reduce the complexity in their systems while also standardizing processes across regions.

As the market slowed down, many companies would have cut back teams and put projects on hold. But Darren Ruhr, chief administrative officer of Precision Drilling, and his team made the bold move to gather the best talent and use that slow time to tackle an extremely ambitious project to reinvent its tech landscape.

Going Greenfield in Downtime

Not only did Precision Drilling decide to transition its 20-year-old system to SAP S/4HANA, the company also chose to deploy it in the cloud while eliminating its data centers. It also added SAP SuccessFactors to the mix to help address its demanding HR requirements, as well as SAP Concur for expense management. And, for the first time, the company brought its SAP technology to the field operations at its rig sites. Precision Drilling accomplished all this in an incredible 12 months.

Ruhr spoke with ASUG about how he got executive buy-in, the advantages of being an early adopter, and how this change is helping the company innovate and deliver high-value services to customers.

Ann Marie: What business challenges were you looking to solve through your SAP S/4HANA project?

Darren: Since starting with SAP, our company had gone from a Canadian company to an international company with operations across the U.S. and the Middle East. Our existing system worked for us, but there were so many interfaces into legacy systems that we wanted to do a greenfield implementation. At the same time, we wanted to eliminate our data centers, as well as add SAP SuccessFactors Employee Central and SAP Concur. And we wanted to incorporate this into all of our field operations at our rig sites, which previously had very limited exposure to SAP.

We had 20 years of data sitting in our old environment. We had interfaces to a lot of custom applications. Our entire billing process was outside of SAP, sitting in a custom application. We also didn’t have great connectivity on our rigs. And we wanted to switch to tablet devices and go paperless on the rigs. It was a big project.

Ann Marie: How did you get executive buy-in for the initiative?

Darren: Everybody knew we had to do something. We were living in a 20-year-old house that needed a major renovation. So, do we renovate the existing system or implement a brand-new one? The main argument I used with the executive team was that the oil and gas industry tends to be boom or bust. If we waited until a boom, then the business would be so busy that we wouldn’t be able to implement. Our logic was, “We’re a long term strategic company. We need to address these kinds of ambitious projects and implementations while we’re not as busy in the field and we have our best people available.”

Being an early adopter of SAP S/4HANA meant that the consulting companies were all very eager to help with this project. So, we were getting the best resources from all the companies that were able to assist.

Ann Marie: That’s a really important point, I think, as some companies might be dragging their feet about the 2025 date. The resources closer to that time will start to get booked, whereas you had their undivided attention as an early adopter. So, you decided to rip down the 20-year-old house and rebuild it?

Darren: Our analysis pointed to doing a brand-new implementation. We spent a lot of time on data cleanup and deciding what data needed to come over to the new system. We parked the old environment so it was available for the finance people and auditors and for other users who want you to keep everything alive forever. But we kept the new system completely separate.

Ann Marie: How did you approach customizations?

Darren: The existing environment had tons of customizations that were implemented over 20 years. We made a conscious decision for the new environment that we were only going to customize when it was beneficial and unique to our business. We were hard on the departments, asking, “Do you really need this modification here?” The only customizations that we ended up doing had to do with processes that were specific to our drilling rigs.

Ann Marie: Let’s go back to implementation. What were some of the most helpful steps you took?

Darren: First, the data, the design, and the hierarchy were critical. The second thing was taking a hard look at our business processes and really challenging people on customizations. Then there was establishing global standards. We had to spend a lot of time on that. The more we dug into business processes, we found, “Oh, Canada is doing it this way, but the U.S. is doing it this way.” And so on.

Ann Marie: What were some of the steps that helped with adoption and acceptance of global standards?

Darren: Everything from setting up an executive steering committee, to the business stream leads, to the communication and change management of the project. We focused on why we were doing this and how this was going to benefit us. We needed the executives on our side because we are very geographically organized. We convinced the senior vice presidents for Canada, the U.S., and international that we need global standards and we needed to drive that down through the business.

Ann Marie: How did you bring your field ops teams into the SAP circle for the first time?

Darren: You have to look at each rig like a $25 million business. The rig manager had to be engaged pre-go-live in lots of training sessions— and the same for the drillers who report to the rig manager. They’re so geographically dispersed that it was a big effort and challenge for us.

We deployed new tablet devices on Windows 10 to the field, using satellite communications. We have rig managers who are in their 50s and 60s who don’t even use computers, and we have other rig managers in their 30s. They just embraced this stuff right away and told us, “Give us more!”

Ann Marie: I’m glad you brought up the mobility piece because I can imagine that’s a huge challenge. If you’re in the middle of the Arabian desert, then you must be connected for the cloud to work, right?

Darren: We partnered with Unvired, which provided mobile software with offline capability that interfaced with SAP. If you need readings on an engine and there isn’t connectivity, you can walk around the rig and do them. Whenever the connectivity kicks in again, it will sync up.

Ann Marie: What advice would you give to other oil and gas companies that may be hesitating to take on a big transformation project like this one or may be waiting to move to SAP S/4HANA?

Darren: First of all, the technology works, so don’t worry about that. Next, focus on your data and your processes and try to eliminate custom code. Using our best people from different areas of the business made our 12-month implementation project successful. We had six sprint cycles using Agile methodology and then moved to the Waterfall method to finish up the project.

Ann Marie: How did you balance the use of internal versus external people?

Darren: We considered turning the project over to one of our big partners. Besides the cost, we were also limited to the resources that they could bring to the table. We partnered with Deloitte, IBM, and others to find people who knew the modules, but Precision Drilling project managers ran the project.

Ann Marie: What are some of the benefits you’ve experienced since going live in April 2018?

Darren: The reporting and analytics are definitely better, and our data is much cleaner. We see more information sooner because everything’s coming in live from the field. Supply chain data, financial data, HR data—it’s all live and coming in much faster. If some rigs perform better on costs or retention or safety, we can really slice and dice the data and get better insights into our business in real time.

Moving from your old data center to a cloud, there’s a lot that is still expensive. But at the end of the day, we’re way more efficient and we have a better platform to build on because it’s so clean, it’s all on the cloud, and we’re using all the standard SAP products. And because we don’t have a lot of customizations now, any improvements that we do we can roll out much faster. Our turnaround since go-live on making the system processes even better has been very quick. Also, we’ve moved much more into an internalized model now. Our billing and invoicing are all inside SAP, and we’ve been able to reduce a lot of reliance on external consultants.

Then there’s HR. We have about 5,000 employees around the globe, and we have a lot of turnover in the lower-level positions on the rig. We’re pretty much automated now from the time that you first apply to a job to when you get sent out to a rig.

We also deal with seasonality. In Canada, we typically do a lot of drilling in the winter, so we hire up to 2,000 temporary workers who stay with us until winter ends. We go through a lot of these cycles. Our whole HR process is critical to our company because anybody can buy a drilling rig. The secret sauce at Precision Drilling is really the people who run the rig, how we maintain that rig, and how we deliver service to our customers. That’s where we differentiate ourselves.

Don’t miss your opportunity to hear about trends in the industry from other oil and gas SAP customers at our virtual experience ASUG Best Practices: SAP for Industries in September 2020.