Dynamics 365 powers system harmonization and growth for energy company St1 Nordic

Acquisitions create disparate processes and systems

St1 operates in multiple business areas in the energy sector, including fuel supply and refinery operations and the sale and distribution of liquid fuel through direct deliveries to industrial customers and to consumers through retail stations. Since 2016, the retail business has grown significantly through acquisitions of companies with complimentary or innovative capabilities. But with acquisitions came additional complexity in operations. Each of the largest acquisitions ran country-specific processes and systems, even though the businesses were quite similar.

St1 faced several challenges following the acquisitions—multiple aging and disparate systems, fragmented and disparate business processes, and poor data quality and visibility. The company had four different ERP systems. They outsourced some functions like accounts receivable for certain payment types. And due to the complexity of the customer data, they lacked visibility of customer credit and faced unnecessary credit risk exposure. Without common processes and systems, it was also impossible for St1 to implement automation and new business models to unlock operational synergies.

Strengthening the organization for the future

St1 set out to harmonize their multiple disparate systems. They aptly named the project “Golda,” after the lake located in the middle of the Nordic regions where St1 operates. It symbolizes the middle ground—a guiding principle for this ambitious project. Golda successfully harmonized the company’s systems and enabled St1 to undergo a dramatic transformation toward a renewable future.

The company selected Microsoft Dynamics 365 as the single ERP system for the entire organization. They also considered SAP, but St1 felt that its industry-specific template was too limiting. The flexibility and extensibility of Dynamics 365 has enabled St1 to integrate with more than 100 applications, such as Salesforce for CRM, Magento for e-commerce, and Kalibrate for POS pricing. Dynamics 365 Supply Chain Management supports direct delivery and retail sales order processing, retail station management, and customer invoicing. Dynamics 365 Finance provides general ledger, accounts receivable, accounts payable, fixed assets, and purchase invoicing.

To accomplish all this, St1 established a Dynamics 365 Center of Excellence and worked with development and consulting resources from Microsoft Cloud Partner Program member, Digia.

Harmonized systems ensure agility and visibility

St1 had two clear and ambitious goals for the system harmonization project: to enable strategic initiatives and to reduce costs.

The system harmonization laid the groundwork for greater business agility and innovation. In addition to near real-time reporting of financial data across the entire company, St1 can now quickly scale new business models across all regions, amplifying positive performance.

For example, the new self-service order management solution provides B2B customers in all regions with convenient, personalized experiences like a 24/7 view of available products, near real-time pricing, and order, delivery, and invoice history. At the same time, St1 teams gain a coherent view of customers across their offerings, allowing employees to better understand customers during sales and service engagements. Furthermore, this self-service solution increases operational efficiency since St1 can scale to handle more orders without increasing staffing.

Harmonization facilitates growth...

With unified processes and systems, St1 has been able to roll out other Nordic-wide initiatives, including a mobile application for refueling and car washes, a web portal to pilot the sale of carbon credits, and a network of EV charging stations.

System harmonization also serves another ongoing strategic initiative. It enables St1 to minimize business disruption and unlock synergies while providing the company with a reliable and repeatable framework for onboarding future acquisitions.

In addition to long-term benefits, St1 has gained immediate cost savings and increased efficiency. System consolidation and economies of scale have reduced technology expenditures and allowed the company to bring back previously outsourced work like accounts receivable for some payment types.

…and automation

The company can create free-text invoices with ease, thanks to robust workflows powered by Microsoft Power Automate. The workflows reduce manual data entry and ensure accuracy of invoices and downstream financial postings.

Data is shared seamlessly across Dynamics 365 and the other systems. Kalibrate, a third-party POS pricing tool for fuel products, combines sales volume data from Dynamics 365 with other sources to determine prices at gas stations. By bringing together the right data and processes, the unified system ensures St1 stays agile with continuously updated prices that maximize margins.

St1 is also using Power Apps to eliminate manual processes. In the past, obtaining inventory from the 24/7 spare parts warehouse produced paperwork that needed to be entered manually into the inventory system the next day. Now, employees simply use an app to log the spare parts they pick up. The app automatically updates the inventory journal, eliminating the time-consuming and error-prone manual data entry.

Tangible results

Improved cash flow: The self-service order management solution provides accurate, timely order and invoice details directly to customers, helping St1 enhance the customer experience while handling higher order volumes without additional resources. With direct access to their data, customers are paying faster, resulting in better cash flow for St1.

Increased productivity: With the unified solution, St1 has been able to bring the previously outsourced accounts receivable function back in-house without adding resources. St1 has also seen an increase in invoice accuracy and a decrease in days outstanding.

Enhanced data visibility: A fully integrated system with Dynamics 365 at the core provides St1 with the accurate, reliable financial data they need, when they need it.

Higher efficiency: With a streamlined and automated procure-to-pay process that quickly and accurately matches vendor invoices to purchase orders and goods receipts, St1 can obtain inventory and services more quickly.

Eliminating manual processes: The inventory automation app—powered by low-code Power Apps and connected to Dynamics 365—has eliminated all the paperwork, time, and errors associated with the previous manual process.

Embracing change

St1 plans to continue its partnership with Microsoft in the years to come. The company started the transformation with their retail sales business. With finance, procurement, and warehouse management up and running in their refinery business, St1 has already seen process improvements. In the next chapter, the company plans to expand the scope of Dynamics 365, Power Automate, and Power BI in the refinery business to solve the system needs of their new biorefinery, set to go online in 2023. The solutions will play a key role in helping St1 gain better visibility and control over supply-side margins, which face increased risk exposure from volatile crude prices, geopolitical tension, and currency fluctuations.

Later, the unified system will directly support St1’s transition to renewable energy. The system will automate operations, manage the end-to-end supply chain margin, and manage price exposure of renewable feedstock processed in their new biofuel refinery in Sweden, expected to commence operations in 2023.

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