As any company that is heavily involved in the world of mergers and acquisitions (M&A) knows, the integration of services, systems, and processes can be make or break. This was exactly the challenge—and opportunity—Umar Farooq, vice president of Information Technology at NexTier and one of the leading minds modernizing IT standards across the energy sector, faced as he took over the lead IT role upon the company’s 2019 formation.
We recently sat down virtually with Farooq to discuss the strategy he’s been executing to grow the energy leader’s business since the merger as well as the role SAP S/4HANA Cloud has played in this process.
Merger Gives Rise to New Industry Leader
Houston-based well completion and production services company NexTier Oilfield Solutions has quickly become one of the leading providers of such services in the United States. However, in the grand scheme of things, it is still a relatively new company that emerged onto the global energy scene following a 2019 merger of long-time leaders Keane Group and C&J Services. It was important for Farooq and his team to get some early momentum to ensure a strong footing for the company’s future. This is where NexTier’s digital transformation strategy would play a pivotal role, revolving around boosting operational efficiency wherever possible.
Two examples include the company’s Equipment Health Monitoring and NexHub tools, which help them track activities on the rig site, granting teams a real-time view of operations that enables them to provide centralized monitoring, real-time reporting, and workflow automation—all advancements that are critical in the world of energy production.
Specific to the merger, one of the biggest value drivers within NexTier’s digital transformation strategy—and one of Farooq’s top priorities—is to manage the technological integration of disparate systems resulting from the merger of two different companies so the team could take advantage of the massive scale, technical expertise, and resources the move opened for the company. Enter SAP S/4HANA.
SAP S/4HANA Emerges as an M&A Lever
One beneficial feature of the merger was that SAP ERP was already in use at both companies, so SAP S/4HANA was a natural stepping-stone to help Farooq and his team redesign and simplify business processes. Add this to the oil and gas industry standards SAP has established with the help of leaders like NexTier, and SAP S/4HANA Cloud quickly helped the company unlock millions in merger synergies through reduced costs across IT.
“SAP S/4HANA allowed us to build an ecosystem of tools that were fit for purpose and aligned with the business. In addition, it helped us reduce our run rate costs for the maintenance of an ERP application,” Farooq said.
Since implementing the solution, NexTier’s team has seen significant improvements, including a smooth integration with a third-party solution for integrated field ticketing and customer invoicing, more efficient exchange of supply chain partner information, and greater operational and financial visibility thanks to improved data aided by spread-level profitability reporting and increased process discipline. In an industry where margins are everything, SAP S/4HANA has proved to be a valuable tool in Farooq’s overarching and industry-leading digital transformation strategy. But functionality wasn’t the only ingredient for success.
CIO’s Secret Ingredient: Familiarity with SAP
Farooq has gathered many best practices throughout his extensive career, but one element of his background played a particularly important role in ensuring NexTier’s success with SAP S/4HANA Cloud. His first job out of college was with Nissan Motors, where he led the implementation of their SAP-powered vehicle management system.
“This is where my current role as the leader of technology strategy at NexTier came full circle with the positive career experiences with SAP,” Farooq said. “SAP S/4HANA Cloud became a foundation for NexTier’s ERP system consolidation efforts, and it was thanks to early experiences with the world of SAP that the process has gone smoothly.”
A certified video game tester and avid reader in his spare time, Farooq has seen tremendous success in his career of helping organizations solve large-scale challenges with technology. When asked what advice he’d give to other aspiring IT leaders, he responded, “The biggest mistake you can make is to shy away from taking calculated risks in your career. You never know when a role you maybe thought wouldn’t be the right fit or a project that you believed might be too challenging uncovers fruitful growth opportunities.”
The SAP S/4HANA Success series features content by leaders from SAP North America focused on highlighting customer success with SAP S/4HANA. Learn how customers in this region manage successful implementations with the partner ecosystem and SAP Services as well as leverage the software to transform their industries.
John Tully is senior vice president and managing director of the South Region of SAP North America.