For many SAP customers, a move to SAP S/4HANA becomes a journey that is far more complex than they originally envisioned. For others, that move can be a once-in-20-year opportunity to simplify a vastly complex technology landscape.

That was the experience Dominique Tessaro had when he took on the role of CIO of VINCI Energies Group in 2010. He entered into a technology environment that was defined by the assets at each of the smaller companies that the group acquired year over year. This meant the business had little to no visibility across the multiple ERP systems and spreadsheets used by its multinational units. Its highly decentralized operational approach made this an even bigger challenge.

Out of Many ERP Systems, One

Any strategies to simplify this tech environment must work for the company’s 1,800 business units and 83,000 employees around the globe. Dominique and his leadership team launched an ambitious digital transformation project to bring finance, accounting, project management, service management, and strategic planning together on a single, central digital core. That digital core would start with SAP ECC 6.0 but with a plan to eventually move to SAP S/4HANA.

We caught up with Dominique to learn about how the transformation is going and what benefits the company is experiencing so far. We heard about the innovations it has been able to bring to finance using machine learning and automation, the benefits of adding SAP Fiori apps, as well as the advice he has to share with other SAP customers who are about to take on a similar SAP S/4HANA journey. For VINCI Energies Group, the key to success was staying firm on using one system, one way, across the organization.

Ann Marie: Can you tell us a bit about what VINCI Energies Group does and who your typical customers are?

Dominique: We help our customers with their energy transitions and digital transformations by providing broad services for transportation, energy, communication, sustainability, infrastructure building, smart factories, and information systems. What is very interesting is that we accomplish this through more than 1,800 business units and 83,000 employees around the globe. We are very decentralized in the way we do business—we consider ourselves 1,800 entrepreneurs. We are part of VINCI Group, which is a more than 48-billion-euro company.

Ann Marie: How is it that your work helps make plants, cities, and power grids safer, greener, and more efficient?

Dominique: We work on energy installations including wind farms, solar farms, and power stations. We put the best technology and the best engineers to work with our customers to improve their electricity consumption or improve how they produce electricity. We are committed to cutting our carbon dioxide emissions by more than 40% by 2030. We have made big energy commitments and we help our customers meet their own energy commitments.

For example, a big industrial customer in Europe could come to use and say they want to reduce the energy consumption at their factory. We work to find innovative solutions with the suppliers and with the people who will build the machines. Then we install the solutions that will reduce the energy consumption.

Ann Marie: What inspired your digital transformation project to move to one central digital core and what you were aiming to accomplish?

Dominique: Every journey has a start. I will go back to when I joined the group in 2010 and it was a 4-billion-euro company. Now we have close to 14 billion euros today. VINCI Energies is acquiring local and small businesses every year. It’s part of our DNA to bring new entrepreneurs into our business and make our footprint bigger. When you are appointed as the CIO to a company doing lots of acquisitions year over year, you discover that you have almost all of the IT solutions in the world in your group.

Ann Marie: That’s definitely a challenge. How did you begin the simplification process?

Dominique: To continue to grow, we must integrate companies more quickly into the VINCI Energy model. In 2010, I started to work on the infrastructure first because it was easier for the business—email systems, security, workstations, and so on. And then in 2013 and 2014, we had the discussion about the ERPs. At that time, we were running 17 ERPs—some SAP and some other solutions.

We discussed this with the C-level executives, and we decided to build a new core model that brings the best business processes together at the center of the company. We went live in 2015 and, since then, we have been deploying this core model all over the world. When we started, it was an SAP ECC 6.0 single client solution—so, one database, one chart of accounts, and one supplier customer database. Then we migrated to SAP Suite on HANA one year after. And then at the same time we were deploying our ERP all over the world, we were migrating in 2018 to SAP S/4HANA over a weekend during the summer in France.

And now, as we speak in 2020, I am live on SAP S/4HANA with more than 12 billion euros of turnover running on this single instance. I have more than 34,000 users. And we are using SAP S/4HANA with most of the classic modules of SAP, which is finance, purchasing, sales, project management, timesheets, and management of inventory. And we are continuously deploying this solution as we acquire new companies. It is a never-ending story now.

Ann Marie: How did you make the business case for moving to SAP S/4HANA from SAP ECC 6.0.? Did your business leaders question moving to SAP S/4HANA? And how did you work through those questions?

Dominique: We took a big-bang strategy in 2018 when we migrated to SAP ECC 6.0 on a single day. When we designed SAP ECC 6.0, we knew there would be a point in time when we would have to migrate to SAP S/4HANA. We said to the business, there are some functionalities we will not do upfront. We will not try to develop them internally. We will wait to migrate to SAP S/4HANA.

We saw it as a normal evolution of the ERP and the technical migration because we had already completely redesigned and rebuilt all of our business processes in 2014–2015. We saw SAP S/4HANA as an evolution rather than a revolution from a business standpoint. We were not challenged to build a strong business case because we saw this move as part of the normal evolution of our ERP.

Ann Marie: How were you able to get the rest of the business on board to help you migrate your ERP? When some organizations want to migrate to a new ERP, sometimes it’s those business processes that hold them back rather than accelerate the process.

Dominique: On a journey like that, the answer will never be, “I am the one who did it.” It was a real partnership—a strong collaboration between the IT department that I lead and the business side. And when we decided to design a single solution for all over the world, my boss (who is the CFO) and I determined that we will only succeed if we have the highest-performing people in the group. The group acknowledged that, if we want to build a solution that will last for 20 years, we must put the best and brightest people into this program full time.

So, we brought the best people together to work on the program for two to three years and help as much as they can to develop the solution. Then they went back to their normal jobs. We had business process owners working full time on the program. And then during the four or five months of the generic design, people from all over the world came in for two to three days each week to design the processes.

Of course, there were lots of disagreements and challenges. Some people didn’t agree with the processes, but the concept was always the same. We can have two or three options on the table, but at the end of the day, there will be only one way. And we have been able to stick to that. We have set up a very strong steering committee process with the business and the IT department. Still, after five years, we have a one-day review process.

That’s really the secret sauce to make it happen—a strong team, very good knowledge of SAP, and very strong people from the business. Every committee should have one goal—to make the project a success.

Ann Marie: How much customization did you allow into the system?

Dominique: On some processes, we remained very close to the standard. But for other processes, like any customer, we have redesigned our own screens and reports because we have a very specific way of managing projects and business units. Standard SAP will never do it the way we need it. The core of our business is project management, and we are doing 500,000 projects a year. I would say for about 80% of the processes, such as purchase requests, we’re using as much as we can that’s standard. But a big part of our ERP is custom because this is our secret sauce to be profitable.

Ann Marie: You described your company as entrepreneurial. Do you think that helped with the project to work on your business processes? Or was it an obstacle at times?

Dominique: Everyone wants to have their own processes, but this is where you have to say we have to define one way. I will give you a very practical example. In every ERP, there is a defined calculation to determine the interest cost of the cash on the project. There are various formulas. But one day, we decided we don’t care about the formula. We just need one. And this is the same formula that will be implemented everywhere. Some people liked the way they were calculating this. They thought the German way was better than the French way, and the French way was better than the Spanish way, and the Spanish way was better than the German way. But at the end of the day, we need just one rule. So, we implemented it. And then, every time we’d look at the numbers, the P&L statement, the balance sheet, or the figures of a project—no matter where we looked at every place in the world—the cash interest was the same number that means the same thing so we can understand what is behind it.

Ann Marie: What data challenges were you experiencing with all of the different ERP systems that you had before that you solved through this transformation?

Dominique: I don’t know if SAP has many customers like us. As of today, VINCI Energies has about 1,000 legal entities. And each of these legal entities has its own clerks managing its own accounting processes and doing monthly closures. Of course, we are on the stock market, which means that four times a year at the end of the quarter, there is a cutoff date when they need to produce the numbers for our financials.

When you customize a new company, you need to define who will validate the purchase orders. In one business, it will be required at 1,000 euros that it will go to the business unit manager. In other businesses, it’s 5,000 euros. So, it’s a very decentralized way of customizing your ERP while maintaining a strategy for how you approach it. That was one of the difficulties we faced.

Another challenge is when your company has various ERPs and you suddenly discover different financials in other ERPs. You cannot have a discrepancy between both while running on SAP S/4HANA. So, when you are doing a data conversion, it is a big point of discussion about how to manage any discrepancies and maintain one single source of the truth.

Ann Marie: What benefits have you seen after the implementation?

Dominique: In our business, which is project-oriented, is it always difficult to follow and track these activities. When we were expanding and making acquisitions, we realized that there were some discrepancies in the way project managers were making their calculations on many KPI indicators. It can impact our business if we are not referring to the same numbers. A part of the ROI of this transformation program is avoidance of risk in our financials. If you have full control of all the financials of the group, you may be able to discover more quickly if you have a problem somewhere. So, it’s cost avoidance.

Secondly, it is obvious for everyone that there are new accounting rules coming. If you have 17 ERPs, you multiply the cost of implementation by 17. As we move forward, every new evolution and new development we’re doing comes with savings of money and time.

Ann Marie: Where is automation helping with your transformation?

Dominique: When you have this core model in place, you can build a lot of SAP Fiori apps to help you automate and simplify all of your processes—for example, all of the apps around the digitization and validation of timesheet entries, purchase order validation, invoice validation, and entry of the new estimate of completion for your project. Once you have digitalized all of these processes, you can put them on a screen on a PC, on a laptop, or on a phone and you have quicker processes in place. When someone is waiting for a meeting, they can use their smartphone to complete a task. You save time, you save money, you are quicker, and you are better.

When you have a big platform like this, you can start to put in innovations. We have implemented supplemental machine learning to automate all the incoming payments on the incoming statements from the bank to indicate that we’ve received a payment from the customer. That was a very manual process for the local clerk to take the incoming payment, incorporate it into SAP, then check the sales invoice, and make the reconciliation.

Now we have automated that process. Saving time for this clerk is very important because this task is not a very interesting one to do. They are very boring tasks. As new legislation comes in every year, these clerks have a lot of other important things to do.

Ann Marie: Did you implement SAP Fiori? How long did it take to implement the reports and analytics that you were looking to launch?

Dominique: So, our project had three phases. The first phase was just to implement SAP Fiori in 2015 and 2016. We set up a couple of SAP Fiori apps as a way to test the solution.

We were missing some feeds for some dedicated business processes, so I trained my internal development team to build some SAP Fiori apps for us. For the very first time, they developed an app for purchase order validation and for invoice validation—very classic SAP Fiori apps. Then, in 2018, once we migrated to SAP S/4HANA, we started to build apps like timesheets that are much more complex. These were beyond doing only validation and were about really building apps. That was the next phase.

We just went live about six months ago with a new type of SAP Fiori app that works on top of our ERP. We are delivering a real-time dashboard for the business unit manager. We built about 15 tiles that showcase all of the main indicators and KPIs on their projects. It’s so easy now for the manager just to log on and check all of these tiles on a single screen. They just have to click on the tiles to get more data, thanks to SAP S/4HANA, which feeds the data. That was another way of bringing innovation through SAP Fiori apps to the business.

Ann Marie: I’m curious, were you able to develop these SAP Fiori apps with your existing team? Did they have the right skill set, or did you have to bring in a partner to help you build them?

Dominique: Very good question. I prefer to build them on my team, because developing these SAP Fiori apps that way is more efficient. We have developers who can expand their training and knowledge to HTML development. We have some UX designers on my internal team and they’re working closely together when developing these SAP Fiori apps for the business. So yes, you have to improve your team’s skills.

They need to know the full stack of SAP technology, as well. It’s a new way of thinking and doing things with HTML. I’d rather do it this way than to try and bring expertise from an outsourced provider.

Ann Marie: That makes so much more sense. If they’re closer to your business, their level of understanding of the technology and processes is so much deeper.

Dominique: And I have one piece of advice: If you’re running SAP and you are on SAP S/4HANA, you must have a very strong internal development team. These are the people who will be working closely with your team and with the business so they can deliver better value. Sure, you can have some developers offshore. But they can be doing very simple reporting that doesn’t need a strong link with the business. As soon as you start to do SAP Fiori and other types of development, you must have your developers at the heart of the business and taking part in the design meetings.

Ann Marie: That’s a great piece of advice that I’m sure will help other customers who are just starting their SAP S/4HANA journeys. Thank you for talking about your journey, Dominique.

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