To increase its oil and gas production across Asia Pacific, OMV aimed to acquire additional production assets in New Zealand. How could OMV complete a complex merger on time?
OMV partnered with IBM Services to deploy a brand-new instance of SAP S/4HANA® in just seven months, allowing OMV to manage every aspect of the newly acquired assets from a single solution.
7 monthsto deploy a brand-new SAP S/4HANA platform
Multi-milliondollar acquisition completed on time
PositionsAsia Pacific as a core region for OMV, driving growth
Business challenge story
Bridge to the future
Even as we move to cleaner, greener sources of power, we know that oil and gas solutions will play a crucial role in bridging the gap between today’s needs and tomorrow’s energy technologies. To help satisfy global energy demands, OMV specializes in producing and marketing oil and gas, and delivering innovative, high-end petrochemical solutions in a responsible way.
Ali Syed, Head of Accounting and Special / SAP projects at OMV Upstream, explains, “We operate up and downstream oil and gas businesses around the world, from the exploration, extraction and production of raw materials to the refinement and distribution of finished products. Naturally, we are always looking for ways to enhance our business processes. In the transition to a green future, while so many consumers and industries continue to rely on oil and gas, it is essential to improve efficiency to help reduce carbon impact.”
OMV has a substantial international portfolio, with operations spanning Central, Eastern Europe and Russia, as well as the Middle East, Africa, and Asia-Pacific regions. When a major player in New Zealand’s upstream oil and gas sector prepared to divest its production assets, OMV saw a significant opportunity to boost its Asia-Pacific presence.
“We have been active in the New Zealand oil and gas market for more than two decades, and the many industrialized nations across Asia Pacific make it a key growth market for OMV,” Ali Syed explains. “By acquiring these production assets, we would significantly increase our oil and gas production in Asia Pacific almost overnight, and become the number one oil and gas producer in New Zealand. But there was a catch: we had to be ready to take over the end-to-end operation of the entire New Zealand business in just seven months.”
Like many energy leaders, OMV has relied on SAP solutions to drive its global operations for many years. A future-looking enterprise, OMV has set out a long-term roadmap to transition from SAP ERP to the cutting-edge SAP S/4HANA platform.
“Our ultimate aim is to move all our global operations to SAP S/4HANA,” adds Ali Syed. “We saw the New Zealand acquisition as an excellent opportunity to prove the concept and explore the possibilities of new digital technologies. The first critical step was to build a brand-new SAP S/4HANA environment in a very short space of time—a prerequisite for completing the acquisition on the handover date. To achieve that goal, we knew we’d need the support of expert partners.”
Following a rapid tender process, OMV selected IBM Services to help configure, test and deploy the new SAP S/4HANA solution. IBM would also help to bring business data from the outgoing company’s business systems—also based on SAP solutions—into the new SAP S/4HANA environment.
Erich Reiter, IT Project Director S/4HANA at OMV, recalls, “One of the things that impressed us most about the IBM team’s proposal for the SAP S/4HANA deployment was the IBM methodology. By combining agile and waterfall development practices with pre-configured deployment patterns and accelerators, we felt confident that the IBM approach would help us meet our aggressive go-live target.”
He continues, “We have worked with IBM Application Management Services in our Europe business for several years, and our positive experiences with IBM have made them one of our preferred partners.”
Mobilizing the experts
OMV decided from the outset that having experienced teams working independently in New Zealand was a crucial requirement, as deferring decisions to personnel based thousands of miles away in Europe would have introduced unacceptable project delays.
With the clock ticking for the merger deadline, IBM immediately mobilized its global resources to kick-start the SAP S/4HANA project. In a week of signing the project contract, IBM Services dedicated a team of experts to the OMV project, completing in-depth workshops to map out the critical path that would lead to business success. On the OMV side, the project was driven by Günter Brunner (Project Lead) and Brigitte Behawetz (Finance Lead), supported by major contributions from the local OMV New Zealand team. On the IBM side, the project was led by Sau-Fong Foong, Delivery and Sales Leader at IBM Global Services.
Brigitte Behawetz, Upstream SAP Finance Advisor at OMV, comments, “We were preparing to inherit a complex operational structure comprising several legal entities with multi-million-dollar assets. Because this was such a large project, we felt it was absolutely essential to have experienced consultants from IBM, SAP and OMV working side-by-side with us on site in New Zealand. IBM and SAP went out of their way to ensure that the resources we needed were available to us, and the close strategic partnership between IBM and SAP was evident from the very beginning.”
With the project due to complete in a matter of months, OMV selected solutions based on SAP HANA Enterprise Cloud, which could be implemented very rapidly at an SAP data center.
“We were already using SAP HANA Enterprise Cloud to support some of our SAP solutions in Europe, so we knew first-hand that the platform was capable of delivering on our demanding requirements for production workloads,” adds Erich Reiter. “For the SAP S/4HANA project, the added benefit of SAP HANA Enterprise Cloud was that it is a pre-configured, turnkey platform—enabling us to move quickly on the deployment without compromising on cost-efficiency or security.”
Following the sun
By harnessing its global presence, IBM offered OMV the benefits of a follow-the-sun approach to delivery. In this way, IBM turned the time-zone differences between New Zealand, Europe and North America to OMV’s advantage.
Brigitte Behawetz remarks, “When our teams working in New Zealand encountered an issue, they could pass it onto the IBM technical team in the USA, and come into work the next morning to find a solution ready and waiting for them—it was an ideal way of working.”
Meeting the deadline
Throughout the project, IBM, SAP and OMV worked shoulder-to-shoulder to keep the project moving forward. Thanks to the effective collaboration between the companies, OMV successfully moved all the data from the legacy SAP ERP environment to SAP S/4HANA, completing the operational integration on time.
Ali Syed comments: “I’d compare the experience of our SAP S/4HANA project to a turbulent flight between Austria and New Zealand. Even though there were bumps on the way, everyone involved knew exactly what the destination was, and there was no doubt in our minds that we’d get there. The IBM Services team put in a phenomenal effort, and they were always willing to be flexible. All of the late nights and early mornings resulted in a great success at the end of the initiative, and we were delighted when the acquisition completed successfully.”
Building the business
OMV has significantly increased its production in Asia Pacific, building its footprint across the region and driving its growth. Looking ahead, OMV is preparing to harness the capabilities of the SAP S/4HANA solution to augment the efficiency of all its operations.
Ali Syed comments, “Now that we have become the operator of more upstream assets in New Zealand, we can make strategic and operational decisions to promote production synergies, lift efficiency, and increase our influence in the Asia Pacific market.”
Brigitte Behawetz continues, “Since the immediate time-pressure of the merger has passed, we’re free to optimize the structure of our New Zealand businesses. At the moment, we have 11 different legal entities in the country, each with its own time-consuming accounting, governance and reporting processes. By consolidating 11 entities into five lean companies—all managed with automation capabilities from SAP S/4HANA—we predict that we will be able to unlock significant operational cost-efficiencies.”
Enhancing key processes
Although its journey with the next-generation SAP solution is just beginning, OMV is already exploring its cutting-edge capabilities. For example, the company is piloting the SAP Fiori® user experience to make it faster and easier for employees to perform key business processes—including on-the-move for busy executives.
“We are currently trialing SAP Fiori mobile applications to allow our management teams to review and approve invoices and time-writing direct from their mobile devices,” explains Ali Syed.
“One use case for SAP Fiori that we are particularly excited about is to improve our asset management process. By creating mobile-enabled digital workflows in SAP S/4HANA, maintenance personnel will be able to record asset inspection data directly into SAP instead of re-keying it into the system later from paper notes. In addition to saving time, we believe that near-real-time access to asset condition data will help us to shift from planned to condition-based maintenance, and eventually to predictive maintenance. Ultimately, this capability would allow us to repair faults before they cause downtime, which will maximize asset availability and boost operational efficiency.”
Ready for what’s next
Based on its successful partnership with IBM Services to deploy SAP S/4HANA, OMV is moving forward with the transformation initiative for its corporate organization as well as its global downstream operations. These projects are part of a group-wide strategy to move the entire business from the previous SAP ERP business systems to the new SAP S/4HANA platform.
“We see that our SAP S/4HANA platform deployed by IBM Services is contributing to a more future-proof business—particularly for our upstream operations,” concludes Ali Syed. “The oil and gas industry is going through major changes, and commercial imperative to contain costs has never been stronger. With digitization and automation capabilities enabled by our SAP solutions, we’re in an excellent position to grow our business and create value.”
OMV Aktiengesellschaft (OMV, external link) produces and markets oil and gas, innovative energy and high-end petrochemical solutions—in a responsible way. With Group sales of EUR 23 billion and a workforce of around 20,000 employees in 2019, OMV is one of Austria’s largest listed industrial companies. In upstream, OMV has a strong base in Central and Eastern Europe, with Middle East and Africa, the North Sea, Russia and Asia-Pacific as further core regions. In downstream, OMV operates three refineries in Europe and owns a 15 percent share in ADNOC Refining and Trading JV.