Petroleum Consortium Integrates a SAP Implementation
A client's SAP implementation created the need for integration. The organization was experiencing problems with account reconciliation, causing thousands of open transactions.
Help the client integrate a SAP implementation by analyzing the data integrity problems and recommending appropriate controls. After working with a global accounting firm to install SAP, the client, a major petroleum consortium, had been unable to reconcile accounts for nine months, resulting in thousands of open transactions. The reliability of intercompany transfers and revenue allocation among the three participants in the consortium could not be substantiated.
The project required detailed analysis of the client's business processes and close cooperation with the client and its SAP systems consultant. Our Enterprise Risk Services (ERS) team worked collaboratively with the client to understand the data integrity issues, reconcile account inbalances and map legacy systems into the SAP implementation. This occurred during the merger of downstream operations of the three multinational companies that formed the consortium.
Identifying and Addressing the Problem ERS consultants brought several key skills to this project, including project management, internal audit, industry know-how and operational analysis. Originally, the consulting team was engaged by the client's controller to reconcile inventory inbalances resulting from the SAP implementation. The consultants determined the scope of the problem, which ultimately involved more than 300 terminals at operating plants in the United States. As the magnitude of the problem became clear, the client's executive management became involved. Reconciling accounts and improving data integrity required peak staffing of 75 consultants and involved 21,000 work hours.
Early in the process, the consulting team designed an exception reporting system that reduced the monthly time required in reconciliation. The consultants then addressed the data integrity issues. ERS professionals worked with the client and its SAP implementation consultants to run parallel systems, train the client's personnel and test interfaces.
Analyzing the Plants The consulting team analyzed the client's operations to spotlight information flows that were not adequately addressed in the SAP implementation. Each of the plants was unique, and many were not mapped correctly into the enterprise resource planning system. In addition, transactions in each plant were of two different kinds: equity transactions among consortia members, and merchant transactions for others. The automatic invoicing systems used in the oil and gas industry for billing inventory transfers were propagating the problems from the client to the industry, so it was critical to correct the problems as quickly as possible.
As a result of the project, open transactions were cleared up and closed, and the client began sending and maintaining reliable data. In addition, information flows were created to increase efficiency, enabling the client to focus more management time and resources on core business.