In the highly competitive oil and gas industry, gaining an accurate real-time view over the total performance of every aspect of the business can unlock significant competitive advantages and give organisations an edge over their peers – it is interesting that Vivo Energy has, sort of, drawn lessons from this fact.
The company has evolved out of traditional ways of doing business by embarking on a total transformation of its business processes to become an intelligent enterprise through an ambitious technology deployment.
“We are now faster in generating sales, order, stocking and pricing data, and can process purchase orders quicker,” says Mike McCormick, chief information officer at Vivo Energy. “The time needed for our account reconciliation process has also been reduced from days to hours, and our end-to-end order process time has been sped up.”
Although the firm is poised to continue riding on this success, achieving these gains required a large and far-reaching digital transformation program to replace outdated “legacy systems” that could not support the firm’s ambitious growth path and make use of intelligent technologies such as the Internet of Things (IoT).
“We had multiple internal departments all running disparate systems, which caused complications with data management, left us blind to deeper operational insights, and made the process of making data-driven decisions near-impossible,” explains McCormick.
To him, a new system ought to serve two purposes – if it is not pushing up growth and expansion, it should lift innovation.
“We needed a powerful technology platform that would support the business as we deliver our vision of becoming Africa’s most respected energy business.”
Vivo Energy is a high growth business that distributes and markets Shell and Engen-branded fuels and lubricants to retail and commercial customers in 23 countries across Africa. The company has a growing network of more than 2,400 service stations that sell nearly 10bn litres of fuel every year, servicing around 1mn customers a day.
“Our legacy systems could not provide the much-needed insight and analysis that would support our growth,” says McCormick. “We made a decision to embark on a large and far-reaching digital transformation process on an extremely ambitious timeline of under two years.”
He notes that the oil and gas player chose “SAP S/4HANA” as a replacement for its legacy systems. But the question is; will the company have an advantage because of the new system?
“With S/4HANA, we are not simply upgrading our technology. The solution is helping us transform our business to meet the needs of our rapidly expanding marketplace and customer base,” explains McCormick.
Working closely with implementation partner IBM, McCormick and his team became one of the first energy companies of its size to deploy the full suite of S/4HANA applications alongside SAP SuccessFactors, SAP Cloud for Customer, and SAP Integrated Business Planning in one integrated, end-to-end business platform.
In addition to the implementation, IBM also provided robust server and storage infrastructure to support the business and systems integration. Actually, the implementation was completed on time and within budget, with McCormick and IBM opting for a “big-bang” approach involving more than 40 application components being enabled simultaneously.
“This was a large-scale business transformation program, not just a software implementation,” says Vinod Goyal, associate services partner at IBM. “This has an impact on the entire organisation, across finance, logistics, supply chain, customer relationship management, HR, customers, partners and suppliers. Every part of the organisation is touched as part of this program.”
Besides transforming core business processes, Vivo Energy, supported by one AdaptIT, adopted intelligent technologies through the implementation of SAP IoT to transform the way the business engages with service station owners and customers, while ensuring the highest fuel quality and uninterrupted flow of products to customers.
“Our IoT capabilities provide constant monitoring of tank gauges and pump conditions, with automatic monitoring of fuel volume and quality at our service stations,” says McCormick. “A custom front-end gives us an aggregated visualisation of tank data combined with other site information, equipping our decision-making teams with deep operational insights and real-time data at a country and service station level.”
Following the implementation, Vivo has unlocked a broad range of business benefits, including in-depth monitoring of performance across every aspect of the business, enabling improved decision-making; automation of administrative tasks and workflows, helping reduce data input errors and enabling staff to focus on value-adding activities; the ability to leverage new technologies to ensure the highest fuel quality and optimised delivery of products to customers; and real-time distribution of data to regional decision-makers which enables data-driven decisions that reduce time-to-market and time-to-value.
According to Pedro Guerreiro, who is the managing director for Central Africa at SAP, the implementation marks a quantum leap in the company’s race to acquire intelligent enterprise capabilities.
“With its industry-leading digital core powering its business processes, Vivo Energy is set to establish itself as an industry leader that seamlessly blends innovative technologies and optimised business processes to gain a healthy competitive edge over its peers,” says Guerreiro.
