From ERP transition to enterprise transformation
How one leading company navigated a complex, $500 million transformation portfolio to deliver results
Client
Global oil and gas company
Industry
Energy
Primary Goal
Major enterprise transformation, including new ERP
Enterprise transformation initiatives are complex, high-stakes journeys that require meticulous advanced planning to navigate from Point A to Point Z—and avoid costly wrong turns along the way. Our client, a leading oil and gas company, was contemplating a multipronged, $500 million transformation portfolio that included fully replacing its enterprise resource planning (ERP) system. But the company knew it needed help getting such a large-scale roadmap right—creating the vision, strategies, and step-by-step plan for smooth execution that would deliver impactful changes. Here’s how KPMG helped our client map out a smooth and successful transformation journey on multiple fronts.
KEY OUTCOMES
Making a measurable difference
- New integrated target operating model that enables more rapid change
- Streamlined RFP process for both system integrators and technology providers
- Organizational change management to drive alignment across multiple transformation projects
- $500 million transformation portfolio delivering budget and timeline milestones
- Enterprise vision and growth strategy driven by standardized operating model
Client transformation journey
Click on each part of the journey to learn more about our client’s transformation.
We needed a leader to guide us through the enabling projects and software/SI selection processes that would set us up for a successful ERP implementation. KPMG provided both the leadership and experience to guide us and assist us in the up-front work required before the design and build phases of the project. And in the end, this front-end work was critical and set us up for success.
Senior transformation program leader
A global oil and gas company
How KPMG helped our client map out a successful transformation journey
When its initial planning efforts for this massive enterprise transformation program had stalled in early 2019, our client brought in KPMG to do a reset and get things back on track. The objective: An overall vision, set of strategies, and detailed roadmap for execution that would guide the company’s interconnected, often simultaneous transformation initiatives, slated to kick off in late 2021. The centerpiece of the program was the push to replace the soon-to-be legacy ERP with a cloud-based solution.
Over the course of the project, our KPMG resources ranged from 30 to 50 people, drawing from teams that cover transformation delivery, strategy, finance, supply chain, procurement, human capital, enterprise technology, data management, major projects, and more. We quickly developed a proactive working relationship and tightly integrated project flow, driven by a two-in-the-box project leadership model in which each of the multiple project teams had a single dedicated lead from both the client and KPMG. This allowed us to work with the client and truly work side-by-side with them every step of the way. Crucially, this allowed us to navigate the onset of the pandemic one year into the project with little disruption. In fact, we were able to work with the client to create more flexible business terms due to the pandemic’s dramatic impact on companies in the energy sector to keep the project on track.
The program focused on four simultaneous workstreams that were the drivers for the final RFP process that kicked off the company’s transformation projects. Here’s a closer look at each area.
Vision and strategy
- Development of overall business case, strategic plan, and program governance
- Integrated execution roadmap (based on multiple initial options) to effectively manage and deliver on business outcomes, including detailed technology roadmaps and timelines
- Design and deployment of a new target operating model to facilitate more rapid change, streamline processes across functions, and standardize ways of working
- Evaluation and rationalization of the company’s current set of applications
- Built out value stream process flows that were foundational to design and testing
- Drove the decision-making and definition of enterprise design decisions that set the stage for the client’s simplification and standardization efforts during design and construct
- Establishing enterprise design framework in this phase gave the client a head-start on overall standardization decisions, allowing them to streamline design, development, and deployment once the SI was in place
- Identified and documented more than 50 risks and issues relating to the next-generation ERP
- Created 23 user personas to understand how users perform their roles
- Fixed-versus-float assessment that determined that 80 percent of processes should be standardized in the future state
- Planned and defined support model for enterprise performance management system (EPM) solution
- Established an Integrations Center of Excellence to provide leading practices and encourage standardization
- Overall project management across all transformation planning workflows
Change management
- Managed complex mix of changes with a pragmatic approach that drove awareness, alignment, and adoption across the portfolio
- Used anchored agility as part of a strategy to help the organization prioritize initiatives based on principles of simplification, business benefit, and time to value
- Established overall governance framework to inform decision-making, define deviation processes, steadily nurture new capabilities, and support sustainable benefits
- Developed program’s “Start Here” page to help the organization understand changes and track progress
Enterprise data quality
- Established enterprise data quality (EDQ) standards to support key business outcomes
- Identified data gaps and quality issues that were tied in part to recent acquisitions as well as structural changes in how the company operated
- EDQ team worked to identify more than 500 required improvement options, including legacy data cleanup, data quality monitoring, data standardization, and conversion requirements
- Leveraged Informatica to set up daily data quality reports that tracked ongoing improvements to hold teams accountable
- Helped prepare the in-scope data for conversion to a new system, which significantly streamlined migration once the new solution was selected
RFP process and vendor selection
- Designed consistent, templated RFP process to help the company identify a single SI while also having the ability to evaluate multiple technology solutions (whether for overall ERP or specific application functions)
- Created more than 130 total use cases, based on wide-ranging taxonomies, used to strategically evaluate product vendors
- Worked with the various SIs and product vendors to help them understand the target operating model and handle questions and responses during the RFP process
- Worked with client on the selection of all final vendors, on flexible, competitive business terms
The power of choice
Successful transformation journeys can take many routes. They rarely follow a simple path from “start” to “finish.” Evaluating a wide variety of potential choices—the pros and cons of each and how potential scenarios intersect—is essential for defining the right roadmap.
Empowering our client with that power of choice was a big focus of our work on this project, from identifying a new target operating model to choosing a new ERP. Rather than simply reacting to the SAP end-of-life deadline for its current ERP and moving headlong into SAP’s cloud-based S/4HANA platform, our client chose instead to step back and consider all its options. That meant reviewing a wide variety of pitches in the RFP process—for both new software and how the competing SIs would plan to deliver it.
In the end, our client chose SAP for its new ERP, but only after considering other technology service providers—and negotiating more flexible and favorable business terms. But along the way, the company also fundamentally redefined its ERP and enterprise systems, adding new functionality from Oracle, Workday, GEP, and others to deliver new capabilities in key areas and expand its capabilities across multiple technologies.
And even when SAP announced mid-project that it was extending its end-of-life deadline to 2027—and many other companies took a deep sigh of relief and hit “pause” on their ERP work—our client made another important choice: To keep moving ahead on its multifaceted, big-swing transformation portfolio and pioneer new trails for its organization.
Meet the team that made the difference for our oil and gas client
Enterprise transformation projects can sometimes feel like you are trying to orchestrate a symphony in which the players are all playing in different keys, at different speeds—not to mention that it’s also another full-time job for teams that are already maxed out to begin with—which is why many organizations seek help. KPMG has a deep track record of orchestrating successful transformation initiatives—including multiple transformation projects at the same time—led by our transformation delivery team and subject matter specialists across a wide range of business functions. Please reach out to us if we can help you think about how to plan, design, and implement your enterprise transformation goals. KPMG. Make the Difference.
Todd Durocher
Principal, Advisory, KPMG US
Kelly Stephenson
Director, Program Delivery Services, KPMG US
Todd Durocher
Principal, Advisory, KPMG US
Kelly Stephenson
Director, Program Delivery Services, KPMG US
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