What modules of SAP were implemented by SOCAR to a vpesta with SAP ERP

The state oil company of Azerbaijan (SOCAR) completed in August, 2010 implementation of the automated accounting system of SAP ERP at the central office. Along with end of this stage of automation, process of SAP implementation of ERP in structural divisions of the company began. Within the global project the first group of 15 specialists of Azerikimya production association took part in special rates. Further other specialists of consolidation will be involved to them.

The SOCAR is in a phase of rapid growth and conversions now. The company occupies a big share in economy of Azerbaijan and therefore the implementation project is important on a national scale. For improvement of quality of a company performance it was required to reduce a set-up time of reports, to make strengthening of financial control and transparency, to standardize and automate business – processes. Also it was necessary to obtain in real time reliable information for the correct decision making, to exercise control of suppliers and clients, uniformity of HR of processes, to accelerate settlement process of the salary. Besides, it was necessary to reduce risk of manipulations and fraud, to automate checks of violations of security, to improve forecasting and management of cash flows, control of payments, interaction with a banking system.

For achievement of these tasks at the first stage by the SOCAR company planned and successfully implemented the following solutions of SAP company: SAP FI (financial accounting according to IFRS), SAP HR (human resources management), SAP MM (management of material stocks), SAP SD (management of sales activity), SAP FSCM (management of financial flows), SAP GRC (the SAP solution for risk management and compliance to external regulatory requirements).

As a result of implementation the set-up time of reports was reduced to 20 days, the received reports allowed to determine necessary level and to make optimization of turnover of trade inventories. The cycle of payroll is reduced to five days, standardization of processes of salary accrual led to significant savings of means, the analysis and liquidation of risks in a system was carried out. Payment became transparent and controlled, data are automatically transferred to bank via the interface.

Implementing solutions SAP BusinessObjects Risk Management and SAP BusinessObjects Access Control — for risk management and compliance to external requirements (in particular, to requirements about separation of powers) allowed SOCAR to achieve cutting of costs for management of powers and also to develop understanding of importance of problems of stability of the company and influence of external and internal environment when implementing strategic plans.

Besides, the SOCAR implemented other innovative solution — SAP BusinessObjects Planning and Consolidation for preparation of the consolidated statements and forecasting and also performs development of the implemented functionality for the purposes of planning and budgeting. Based on implementation the SOCAR will become the largest user of the solution in the territory of the CIS. Implementation of this solution will allow to provide considerable reduction of the terms of preparation of the external and management reporting necessary for acceptance of reasonable business solutions.

In plans of SOCAR for the next four years — continuation of program implementation of development based on SAP solutions. As a result of the carried-out analysis of results of the first stage of implementation of modules of SAP, implementation of several modules which will allow to increase efficiency of the Company, in particular is planned now: SAP ECM (management of corporate information), SAP APO (supply chain management), SAP IS Oil Downstream, and others.

"In recent years Azerbaijan strengthened the state independence — achieved stable social and political status in the Republic thanks to development of progress on the way to democracy, market economy, having provided thereby their gradual integration in world economy. Our company occupies a big share in economy of Azerbaijan, many strategic issues of activity of the company are coordinated personally by the President of the Republic. Therefore change of a situation within the country, the changing market conditions and technical upgrade required operational and specific changes in the oil and gas industry. The SOCAR assumed in 2008 as a basis the development program implementation of implementing solutions of SAP for 2009-2012 and subordinates to it the conversions both on global, and at the operational level" — Suleyman Gasimov, the vice president of SOCAR for economic problems noted.

Development of the project

On October 7, 2015 the SAP CIS company announced continuation of the project.

In 2012 from automation of corporate functions the SOCAR company passed to increase in efficiency of production processes and began implementing solutions of SAP:

• planning and accounting of production (SAP PP),
• accounting management of production and primary preparation of crude oil, discrete production and production cost accounting, maintenance and repair of the equipment (SAP PM),
• process management and investments into maintenance and repairs of the equipment (TORO),
• project management (SAP PS),
• quality (SAP QM),
• material requirement planning (SAP MM).

SOCAR (2013)

Development was gained by the functionality implemented earlier for process management of purchases and stocks, financial and management accounting of costs and revenue (SAP FI SAP CO and SAP BPC). Team of experts of the companies SOCAR and PwC with support SAP quickly prepared start of a system, having increased the accuracy of the operational solutions given for acceptance.

"For effective management of business processes of SOCAR actively cooperates with SAP corporation, the world market leader of the software for business management, creating based on SAP ERP a basis for achievement of strategic objectives of growth according to the tasks set for the oil and gas industry the government of Azerbaijan. Use of SAP solutions became a basis of new level of transparency and efficiency of business processes of SOCAR that allowed to create favorable conditions for business development, including — using foreign investors and also for implementation of the large projects having a strategic importance for the whole country. For implementation of the transformational program, the strategic partner we selected PwC. The PwC company, with its recognizable brand rich with the international experience and profound professional knowledge, became for us the reliable partner. One of the major advantages is our confidence that, working together, we will be able to create effective and well debugged system" — Suleyman Gasymov, the vice president of SOCAR for economic problems noted.

Project Results

Among results of implementing solutions of SAP the management of SOCAR selected implementation of International Financial Reporting Standards, mastering of the industry standards, best in the class, on creation key business of the processes covering different fields of activity of the company.

"The largest oil and gas companies of the world, including Total, BP, Statoil use SAP solutions. For SAP these companies are strategically important clients, and for SOCAR — business partners. Work in the uniform ecosystem constructed on the best world practices considerably increases efficiency of cooperation and simplifies carrying out joint projects. Moreover, business according to international standards of transparency and operational efficiency creates favorable conditions for global cooperation of Azerbaijan with other countries, inflow of foreign investments into projects of the government in the country and abroad" — Vyacheslav Orekhov, the CEO of SAP CIS said.

"For last years the SOCAR company passed a huge way on implementation of the advanced international practice in the field of improvement of business management systems. It became possible thanks to permanent care and control from the management of SOCAR, the president of the company Rovnag Abdullaev and the vice president for economic problems Suleyman Gasymov. We are proud of the fact that the SOCAR company entrusted PwC company support of the program of improvement of management systems and automation based on SAP" — Alexey Burlatsky, the partner of PwC told.