OREANDA-NEWS. May 06, 2011. The State Oil Company of Azerbaijan, one of the world’s largest companies, and SAP, a key global supplier of business management solutions, have announced of successful results of introduction of SAP solutions for human resource management, sales management, financial accounting, material flows, supply chain and risk management.

According to the companies, the SOCAR is now in a phase of rapid growth and transformation. Its share in Azerbaijani economy is quite large, and the project is important in nationwide scale. To improve work quality the SOCAR needed to reduce the time of preparation of reports, strengthen financial control and transparency, standardize and computerize business processes. It also needed to obtain real-time accurate information for proper decision-making, control of suppliers and customers, uniformity of HR processes, fasten payroll processing. In addition, it was necessary to diminish the risk of manipulation and fraud, automate checks of security breaches, improve forecasting and cash management, payment control, and interaction with the banking system.

To achieve these goals in the first stage the SOCAR planned and introduced successfully the following solutions from SAP:

• SAP FI (financial accounting on IFRS)
• SAP HR (Human Resource Management)
• SAP MM (materials management)
• SAP SD (sales management)
• SAP FSCM (management of cash flows)
• SAP GRC (SAP solution for risk management and compliance with external regulatory requirements).

As a result of the introduction, time of report making was reduced to 20 days, received reports enabled to determine the necessary level and make optimization of inventory turnover. The payroll cycle was lowered to five days, standardization of payroll processes resulted in significant cost savings and an analysis and elimination of risks in the system was carried out. Payment has become transparent and controlled, the data is automatically transmitted to the bank through the interface.

Introduction of SAP BusinessObjects Risk Management and SAP BusinessObjects Access Control – for risk management and compliance with external requirements (in particular, the requirements of the separation of powers) enabled the SOCAR to reduce the cost of administering authority, as well as develop an understanding of the importance of sustainability issues and the impact of external and internal environment for the implementation of strategic plans.

In addition, SOCAR has introduced another innovative solution - SAP BusinessObjects Planning and Consolidation for consolidated reporting and forecasting, as well as carries out the development of embedded functionality for planning and budgeting. Following the results of the introduction the SOCAR will be the largest user of the solution on the CIS area.

Introduction of this solution will allow a significant reduction in timing of the external and management reporting required for making justified business decisions.

The SOCAR has won the main prize (Gold Winner) SAP Quality Award 2010 in the CIS countries in the category of "Introduction of SAP software in large companies”, demonstrating a high level of quality and efficiency of SAP introduction. This award aims to highlight those SAP introductions, which differ in efficiency and quality of implementation, and is a serious acknowledgment of outstanding achievements in these areas.

In SOCAR plans for the next four years is to continue realizing development program on the basis of SAP solutions. Due to the results of analysis of the first phase of introduction of the SAP modules, it is planned now to introduce several modules to improve the effectiveness of the Company, in particular: SAP ECM (Enterprise Content Management), SAP APO (supply chain management), SAP IS Oil Downstream, and others.

"In recent years, Azerbaijan has strengthened its independence - stable social and political situation in the country was achieved through the development of progress towards democracy, market economy, thereby ensuring their progressive integration into the global economy. Our Company occupies a large share in the economy of Azerbaijan, many strategic issues of the Company’s activities are coordinated personally by the President of Azerbaijan. Therefore, change of the domestic situation, changing market conditions and technical modernization demanded rapid and specific changes in the oil and gas industry. SOCAR adopted in 2008 took as a basis for its development the Programme of SAP solutions introduction for 2009-12 and subjects its changes at both the global and at the operational level to that," Suleyman Gasimov, SOCAR vice-president for economic issues, emphasized.

"We are proud that Azerbaijan’s largest company has selected our solutions to improve its efficiency and competitiveness. Complex, long-term program of SOCAR development is unique experience for the IT market in Azerbaijan, for the overall IT market of the CIS, and so we hope that the results of this project will be useful not only for oil and gas industry, but also for the entire IT community when forming and realizing long-term complex projects," SAP CIS general director Vladislav Martynov said.