The Situation

Petrom S.A. is a former state-owned conglomerate comprising over one hundred independent companies throughout Romania, covering the whole value chain of oil and gas exploration, production and selling.  The Petrom finance system was split into 74 independent accounting departments, which were operating multiple instances of five ERP systems, with over two thousand accountants throughout the country. The consolidation functions used Romanian Accounting Standards in Petrom’s Headquarters in Bucharest, with a year-end closure often taking as long as eight months. Acquired by the OMV Group (the Austrian Mineral Oil Authority), which is listed on the Austrian and London Stock Exchange, Petrom sought to standardize and meet the specific requirements of International Financial Reporting Standards (IFRS) as well as improve the speed and accuracy of its accounting processes.

The Solution

During a post merger integration project led by Capgemini in early 2005, Petrom management decided to implement a centralized shared service center for finance and IT. Bucharest was chosen as a suitable location, and furthermore a corporate wide SAP solution was identified to achieve Group-wide consistency based on an existing process model. Capgemini Consulting was contracted to lead both these projects, which commenced in mid 2005. The financial shared service center consists of six operational streams and a strong support function. The functional streams include accounts payable, accounts receivable, general ledger and closing, fixed assets, cost accounting and planning and payroll. The support stream concentrates on invoice scanning, printing center for invoices and payroll slips, archiving, office administration and mail services.

The Result

In the first quarter of 2007, Petrom Solutions – the shared finance and IT service centre – was operational. The centre operates with over 800 accountants and 300 IT resources, serving all 74 operational units of Petrom, including Marketing, Refining and Exploration and Production sites, covering all of Romania. The centre is the largest of its kind in South Eastern Europe.

How Petrom and Capgemini Consulting Worked Together

Petrom and Capgemini Consulting worked in collaboration with a large project team comprising of international and local Capgemini consultants, as well as Petrom employees. Throughout the project, resources were ramped up as required, in order to cover all the complex and widespread project activities. To achieve an effective mix of experienced Petrom personnel and fresh employees in the shared service centre, Petrom and Capgemini Consulting decided to split the staffing between internal and external resources.

In order to ensure the right talent was obtained, all internal applicants underwent an accounting test, which was conducted for over two thousand people in a central location, the American University of Bucharest. For the external resources, more than eight thousand applications were screened so that the right calibre of people was found. Ultimately, more than four hundred and fifty accountants were sourced externally for the shared service centre. In parallel, Petrom and Capgemini Consulting conducted the SAP implementation. They worked together to define more than 300 end-to-end processes and document flows for the implementation process. A wave based approach was taken with adequate training, commencing with the implementation of SAP products including SAP Finance and Control (SAP FICO) and SAP Materials Management (SAP MM).

From January 2006 onwards, selected accountants were rolled into the various branches in a predefined sequence and undertook extensive training on the new processes. Together with this, Capgemini Consulting helped Petrom to centralize their nineteen-plus legacy systems, which were used for a further three months until the SAP implementation went live for each branch.

With the help of Capgemini Consulting’s quality assurance managers, the project team ensured that month-end closings were an achievable target, thus improving speed and quality amongst the branches already operating from the shared service centre.

In addition to setting up the operational teams, Capgemini Consulting also centralized the paper archives of the legacy accounting and payroll systems for all the branches. The vast number of these archives accounted for more than ten kilometres in length. Today, they are archived in a central location near Bucharest.

Reinhard Pichler, CFO of Petrom, comments on the partnership: “Capgemini’s program and change management know-how has been a key success factor to the overall business transformation of Petrom”.