A New Digital Core Helps VINCI Energies Manage Its Growing Business

When Dominique Tessaro joined VINCI Energies as CIO in 2009, it was a €4 billion company. Since then, it has tripled in size, acquiring hundreds of companies around the world and reporting a revenue of €12.6 billion in 2018.

With so many acquisitions, management’s top priority was to ensure visibility and data integrity across the business and its subsidiaries. To achieve this, the company decided to create a digital core and standardize all processes on one enterprise resource planning (ERP) system worldwide.

Headquartered in France, VINCI Energies operates in 53 countries worldwide with 1,800 business units that cover solutions for infrastructure, industries, building, and information and communications technology (ICT). The company creates technologies and services that help organizations undergoing digital transformation and develops and maintains efficient energy infrastructures. Part of the VINCI Group — one of the largest construction companies in the world — VINCI Energies accounted for 29 percent of the Group’s revenue in 2018.

“When I first started,” Tessaro says, “my job was to rationalize our IT systems. I got our email systems down from 40 to one as an example. But we were running on 17 or 18 different ERP systems — all from acquisitions.”

As Tessaro explains, VINCI Energies’ business is project-based and each project has its own financial arrangements with clients — it is a very decentralized business model. Tessaro needed to provide both the corporate and local management teams with complete visibility into finances for any project, anywhere in the world.

“In a project business, it is ‘easy’ to trick the results, and bad things have happened elsewhere in our industry,” he says. “We needed a way to be able to spot any irregularity and act immediately.”

Innovation Start with a Digital Core

In 2014, VINCI Energies launched the process of standardizing on SAP ERP. The solution went live in 2015 on SAP and last year the company migrated to next-generation ERP software SAP S/4HANA. Today VINCI Energies runs €10 billion of revenue on the system, including all major business functions such as finance, sales, purchasing, and project management.

“We have about 700 companies running on a single SAP S/4HANA client,” says Tessaro. “We’re live in 14 countries with 32,000 users, and due to our acquisition strategy, these numbers are increasing every year. Now, with one source of the truth, it’s easier to track each business and see if there’s an issue. If one of the business is running well or not, we can see it.”

Tessaro also points out that with one system, it is easier to integrate new acquisitions and ensure consistent use of the company’s procedures for managing a business unit and its associated projects.

“Even if we have many big projects, most of our business is what we call ‘local flow,’” he explains. VINCI Energies manages about 400,000 projects worldwide each year, each valued at about 20,000 to 25,000 euros. “We’re on the top of our industry with 5.8 percent EBIT margins. With one digital core for all its businesses, it’s easier to keep costs down and maintain profitability.”

Embedded Analytics and Machine Learning Improve Business Processes

Now that the company is operating on a digital core, Tessaro says it’s ready to begin its innovation journey. His team has already embedded analytics, making it easier for business unit managers to track key metrics.

“We’ve created a user interface with 10 to 15 tiles that represent the key metrics,” he says. The tiles show if business areas are green, red, or yellow, so managers can see — and fix — issues immediately. Live data feeds the tiles so they can be refreshed to show real-time updates. For example, if a manager tracks unpaid invoices, once the customer payment is registered, the tile goes from yellow to green.

The IT team has also automated accounting procedures with machine learning from the suite of intelligent technologies within SAP Leonardo. Tessaro explains that accountants spend an average of 20 to 40 days yearly per each of the company’s legal entities clearing customer payments.

“Using machine learning from SAP to match customer invoices in SAP S/4HANA, accountants can save half of this time on the clearing process, freeing them up to do more strategic work,” Tessaro shares. The project is currently in the pilot phase.

Having worked with SAP applications for more than 25 years, Tessaro is especially enthusiastic about SAP Fiori, which brings a consumer-grade user experience to business applications. For example, now people can validate purchase orders, expenses report, or manage invoices – all from their mobile phone. Using design thinking principles, the company has developed its own apps based on SAP Fiori, like a time sheet application now used by 300 companies within VINCI Energies. According to Tessaro: “With SAP Fiori, I can say that SAP finally gets it. All of our users can use it — whether they’re in the field or the office.”