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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