Oil & Gas Industry: How Process Improvements Contain Costs and Improve Time Savings
By Jorge Ruiz on Jul 29, 2015
In the oil and gas industry, data-driven optimization has become an essential form of digital business.
As oil prices decline, both IT and business leaders begin preparing for significant changes in management methods. CIOs are often called upon to integrate data across organizational domains, utilize advanced analytics to drive innovation, enhance the quality of business modelling and support stronger data-driven decision making.
In this asset-intensive industry, many companies have multiple ERP systems as a result of mergers and acquisitions and/or a two-tier ERP strategy. These organizations are becoming increasingly frustrated by the problems that multiple purchased maintenance, and repair and operating (MRO) part masters cause when they wish to exploit inventory across the organization, or analyze enterprise-wide demand for MRO.
In a recent whitepaper, IDC Energy Insights: The Production Mandate, a series of in-depth interviews were conducted with IT and line of business across major oil and gas companies. The results revealed that trustworthy data used for decision making was not accessible in a timely manner. 37.8% of oil and gas companies couldn’t gain access to onshore production data for at least three days and revenue figures weren’t available for an average four to eight days. This lack of availability was largely due to the difficulty of working with complex legacy systems and poor data quality.
Top-Ranked Attributes of Data, based on a survey of professionals from oil and gas companies:
Their findings also showed that optimizing well profitability, and reducing exposure related to deferments were top business objectives. For example, reducing deferments in a large upstream company from 10% to 5% could result in up to $1 billion in incremental annual revenue.
With margins under immense pressure, companies can use IT tools and applications to drive operational improvements and increase efficiency. Most of the companies surveyed planned to cut capital spending, but wouldn’t be curtailing technology projects that promised financial and efficiency payback. Companies who fail to invest in digital technologies risk being left behind.
Winshuttle in the Oil & Gas Industry: Get More with Less
Winshuttle can help industries experiencing similar changes and obstacles to the oil and gas industry in a variety of ways. Here are three examples:
Business process reengineering should focus on both top-line revenue growth and cost containment.
Effective business process reengineering should examine both sides of the business benefits equation: containing costs to deal with these economic realities, while also looking for ways to leverage additional top-line growth.
A significant amount of users spend numerous hours a day dealing with manual ERP data entry and transcription work. As a result, delays and errors creep into data maintenance and creation activities. Delayed or distorted strategic decisions based on inaccurate data leads to oversight in waste, high costs and missed business development opportunities.
Winshuttle’s Lean Data Management platform enables companies to implement a continuous improvement methodology for enhancing cycle times and data quality through the elimination of waste.
Winshuttle improves our productivity as a team and as an organization.” – Andy Hart, Assistant Controller, Rowan Companies. Read Full Case Study
Process improvements should cover all major areas within a company.
Business processes should be addressed with an integrated implementation so that you can generate more “bang for the buck” and deliver a solid return on investment (ROI). This approach also ensures that inefficiencies aren’t simply shifted from one functional area or business process to another, which is often the case when business processes are improved in isolation.
Winshuttle customers in the oil & gas industry have successfully optimized over 300 different SAP transactions across all major departments within an organization, including Materials Management, Sales & Distribution, Plant Maintenance, FICO, HR, Production Planning, Inventory Management, Project Systems, Quality Management, Warehouse Management, Logistics, etc.
* 2014 data for SAP Records processed and time saved estimations from Winshuttle’s customers in the oil and gas industry
Business process reengineering efforts should precede any ERP implementation or IT initiative.
Too many organizations in the oil, gas and energy industry fall into the trap of “implement a new ERP system and the process improvements will come naturally.” In order to reap the full benefits of a new ERP system, it’s important to define and implement several of the process changes prior to selecting and implementing a new ERP, CRM, SCADA, fixed asset or mobile workforce management system.
Forward-looking companies start with an enterprise approach, but phase in asset by asset. This allows them to use resources that are in short supply more efficiently. They also take what they’ve learned in each rollout to influence the overall enterprise strategy.
Winshuttle’s Lean Data Management platform focuses on high ROI solutions that can be rapidly developed and deployed, increasing responsiveness to changing business needs and also helping oil and gas companies identify value activities in a few weeks, rather than the months or years it takes to deploy new systems.
8 of the 10 largest Oil & Gas companies in the world are using Winshuttle software.
Learn more by reading one of our customer case studies today.
About the author
After studying Computer Engineering and working as a software developer and project manager for 10 years (Microsoft Technologies), Jorge joined Winshuttle in 2013 and is currently our Product Marketing Manager.
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