extensive customer-focused research
2015 Hot Topics Research Report Introduction To set a context for this year’s report and the subsequent annual Best Practices for Oil & Gas conference this September – we asked oil and gas leaders from across all segments to identify the top focuses of the CSuite in 2015. The below represents, in order, the key leadership focuses in 2015: 1. Cost Reduction, Capital Control, Spend Efficiency and Prioritization 2. Maximizing Productivity with Optimized Business Processes 3. Maximizing Value Realization and Value Driven Activity 4. Driving Organizational Alignment and Transparency 5. Effective Risk Mitigation and Regulatory Compliance 6. Workforce Optimization and Talent Acquisition, Management and Retention 7. Data Driven Situational Awareness 8. Maximizing Asset Utilization and Operational Productivity The crux of this report is focused on the day-to-day challenges experienced by professionals, managers and leaders from across all segments and roles in the industry, their day-in and day-out obstacles. We asked oil and gas leadership, management and professionals to identify the most critical challenges they and their teams face on a daily basis in 2015. The challenges and questions that are most critical to them. The conference, this September, will provide evidenced backed best practice solutions to overcome challenges in the below topic areas and leverage opportunities to improve. 1. The Networked Economy 2. Repositioning IT & the Evolving Workforce 3. Making More Informed Decisions – Data, Analytics & Reporting 4. Leveraging the Cloud, Mobility & HANA 5. Enhancing Business Processes 6. Indirect Supply Chain, Logistics & Procurement 7. Asset Integrity, Maintenance & Reliability 8. Finance, Accounting & Capital Management 9. Operations & Production 10. Large Capital Projects 11. Maximizing Technology Efficiency, Delivery & Innovation 12. Risk Mitigation, EH&S & Compliance 13. Hydrocarbon Supply Chain 14. Enhancing the User Interface & User Experience (UI & UX) © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 1 1. The Networked Economy The Networked Economy is the future of big business. Technology is opening new doors, markets and channels. There have been significant leaps in the way businesses interact with their suppliers, customers and themselves – the sharing of information is the strategic enabler and advances in an enhanced user experience are driving simpler and more efficient transactions. End users are demanding a simple, intuitive and end-to-end “eBay” or “Amazon” like experience. Driven forward by progressions in cloud and in-memory computing and empowered by “Internet of Things” and the IT/OT Convergence, the Networked Economy and the Industry 4.0 landscape are enabling organizations to streamline operations, reduce costs and interact more wholly with their ecosystems. How can oil and gas organizations position themselves now, and in the future, to leverage the role of the networked economy? How can SAP’s suite of Integrated Business Planning (IBP) tools be best leveraged throughout the value chain? 2. Repositioning IT & the Evolving Workforce Perhaps one of the greatest topics of interest this year is how the IT organization can reposition itself as true partners with the business, driving proactive, agile and timely solutions. One of the greatest challenges being faced this year is how to prevent the IT organization from falling victim to budget cuts and cost controls, and instead empowering the IT organization, with proper resourcing, to provide solutions that will cut costs throughout the entire organization. From cost center – to hub of investment and deliverer of value. However, it’s not just the IT organization that is under diligent focus, the entire organizational makeup is a critical topic of interest. Oil and gas organizations are leading the charge to fight against the skilled labor workforce crisis. They are deploying solutions that allow them to maximize workforce productivity, reduce the workforce and enable their organizations to do more with less. Talent management is critical as companies fight to hold onto internal talent and their accompanying intellectual property. Perhaps equally as critical as managing the badged workforce is managing the contingent and contractor workforces. Key areas of interest include: How the workforce can be most efficiently managed and planned, and how tools like Human Capital Management (HCM), SuccessFactors, Fieldglass and Concur can support this A better understanding of how to extract analytics from HR tools and systems 2.1 Talent Management There are new trends and paradigms driving global talent management – organizations need to maintain a streamlined and efficient workforce, without attrition of future talent. The industry wants to know: What tools are organizations using to track and manage talent © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 2 Oil and gas case studies about how Cloud technology has been deployed to support talent management Talent forecasting – what is needed on a rolling basis to ensure correct placements? Which mechanisms can be used to retain talent other than increased compensation How to ensure rotational flexibility of the workforce and talent How SAP tools like SuccessFactors can maximize the talent management approach 2.2 Training & Education What is the right amount of spending when it comes to initial SAP training in your business? Most organizations have this investment as a part of the project budget, but what happens after the project is completed? How do you transfer knowledge from the project phase to the business-as-usual phase? Other areas of interest: How organizations are tracking training, skill sets and certifications Which mechanisms can reduce the costs of training while still ensuring competency The best delivery mechanisms for training Whether it is better to train people on business process first, then technology, or vice-versa Best practices in role-based and data-driven approaches to training How companies can encapsulate all the knowledge they have in their working community How super-user networks and Centers of Excellence can best be leveraged What about 10 years post SAP go-live, when staff have turned over, and the implementation partner has gone - Is training still up to speed? For many organizations, after the project, training and Knowledge Management falls into the lap of IT – but should it? 2.3 Change Management An organization can invest and attempt to deploy the very best processes and tools, however, without strong adoption driven by effective change management – the investment will never reach its full realization. Topics of interest include: How change management practices differ from functional projects to technology projects How process simplification enable greater user adoption and reduce costs in change management Innovative strategies that companies have deployed to drive change management Organizations should consider where the stewardship for the project lies and how they set up the project Key Performance Indicators (KPIs). 2.4 Tools to Enhance Workforce Optimization and Productivity How is mobility driving workforce productivity? When does it make sense to deploy mobile solutions and in what functions are they driving the greatest Return on Investment (ROI)? Enhancing productivity through effective user interfaces What systems and tools are most effective? How can SAP’s Concur solution support? 2.5 Managing Contractors and the Contingent Workforce How organizations are maximizing contractor value Best practices for taking the decision to embed contractors in-house How tools like SAP Fieldglass can help control costs & drive efficiencies in managing contract labor Ways to align the contractor workforce with company culture and safety adherence © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 3 3. Making More Informed Decisions – Data, Analytics & Reporting 3.1 Data Cost control, productivity and efficiency improvement are enabled with accurate data. The data that one puts into an SAP system and the way in which one approaches data, creates a framework on which your data strategy hangs. The method with which one governs and standardizes data, will yield the reporting on the other end. Management and leadership are frustrated with failing to have a single source of truth and seeing conflicting data on similar reports. As organizations continue to grow both organically and inorganically, the focus is on how best to aggregate data from across disparate sources to drive a single source of truth that leadership can rely on to make accurate and timely decisions. The culture of your organization and the importance that leadership places on data, sets the tone for the disciplines around data. The data issues are more about people and process and less about technology. Oil and gas companies are eager to hear: Best practices on how to govern master data Best practices on how to manage (technically) master data Best practices on how to test, clean, “re-clean” and validate master data for organizations who have been on an SAP platform for a decade or more Best practices on how to define master data objects in a standardized format Best practices on how to create a tangible business case for investing in master data management teams, processes and tools How does one match data across disparate data sources or systems? Who is responsible for data accuracy and governance? Business or IT? Should management and governance be centralized or de-centralized? How to handle Mergers, Acquisitions, and Divestures data - Would any companies share how they have managed major acquisitions from a data and systems perspective? When configuring systems from different businesses – what is best practice? Do we always need to merge them? How can HANA and cloud solutions create a paradigm shift in data storage, management and analysis? The workforce needs to better understand how their data specifically effects all other functions and ultimately organizational profitability – end-to-end mapping of data flows 3.2 Reporting & Analytics Successful business analytics relies on good quality data. In fact, reports based on unclean data are useless, only serve to drive a wedge between business and IT, can have significant safety and compliance implications, undermine future credibility and ability to make critical business decisions. In 2015, in particular leadership and management need to be equipped with accurate data that they can rely on to enable agility and timely action. Organizations need to better understand the suite of SAP tools and best practices to manage, analyze and report on data. What is the SAP roadmap for data analysis and reporting? How can tools like SAP © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 4 BusinessObjects and HANA be leveraged to accelerate analysis? With regards to reporting and analytics, oil and gas companies want to hear: Best practices on toolsets for performance and adoption Best practices for heterogeneous reporting and analytics (combining SAP & non-SAP data) Ways to eliminate dead-end reporting Accelerating the speed of reporting How smart analytics drive optimization of business processes Best practices on governance Best practices in training and adoption – an organization may have the greatest and latest Business Intelligence (BI) tools, but without proper user adoption, those tools can be ineffective Different reporting UI’s for different roles - executives may have different dashboards and functionality needs than field engineers There are many common user frustrations – report development speed, usability and costs; How to help drive your BI team to provide a tool that is more usable and appealing SAP’s Tools - SAP’s Business Intelligence toolset has been undergoing significant improvements in recent years. Although the innovation that has taken place has vastly improved SAP’s offerings in this space, it has caused some confusion in the community regarding what each tool should be used for. As such, oil and gas companies want to learn about: An outline of which tool should be used for which business situation, including tools in Analytics, Business Intelligence, Data Warehousing and Information Management Managing source data coming from different systems and aggregated into single source reporting What presentation mechanism/tool do successful organizations adopt when delivering information to the C-Suite Understanding differences in enterprise reporting vs. functional reporting and financial reporting How can our tools more quickly keep up with evolving regulations by way of reporting 4. Leveraging Cloud, Mobility & HANA Cloud solutions have been overtaking the technology market within the past five years. Oil and gas companies are eager to understand when and where to deploy cloud technology, the cost-benefit analysis and the security implications of cloud technology. Furthermore, SAP has developed a suite of in-memory options called HANA, and in Q1 of 2015 rolled out S/4HANA, the latest advancement in in-memory systems. There is a great deal of confusion around benefits and implications of the private cloud vs. public cloud and costs and cybersecurity of both. There is also interest in how HANA and S/4HANA can be leveraged to drive operational efficiencies and profitability – the community needs a clear understanding of the value proposition. Cloud solutions can be difficult in Oil & Gas because of the industry being capital focused – business users don’t understand the implications, costs, value of going to the cloud. Oil and gas companies want to hear: Best practices in integrating cloud and on premise solutions What is S/4HANA; how can it benefit our organization; can we easily migrate from existing platforms to S/4HANA; what are the technology implications; what solutions are currently available and what solutions are coming down the road on the S/4HANA platform? © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 5 What is the current stack of cloud solutions offered by SAP and SAP partners? What are the data integration implications of moving to the cloud? How is HANA tied to the cloud and how does HANA support cloud solutions? Deploying mobile solutions in a cost-constrained environment and the success stories Who is governing? Are their data laws? Oil and gas companies want a detailed understanding of cybersecurity of cloud solutions Who is governing? Are their data laws associated with going to the cloud? When will the cloud architecture be ready for production hosting? There are a limited pool of partner solution providers with cloud expertise – how can we ensure we aren’t paying for their education? 4.1 Mobility Driven Productivity Companies want effective use cases of SYCLO enabled mobility solutions Understanding the implications of a Bring Your own Device (BYOD) policy How is mobility driving field data capture and accuracy? What are the regulatory implications around mobile solutions? Enhanced UI as applied to mobility with solutions like FIORI and SAP Screen Personas How are mobility solutions being deployed to support supply chain, operations and maintenance? What are the successful use cases of mobility deployment to accelerate assigning work orders, inspections, approving notifications and crew management being GIS enabled? What is SAPs User Interface and Mobility strategy? How fast are mobility deployment returns, how are they measured and what are the mechanisms to accelerate the ROI? 5. Enhancing Business Processes A dynamic market environment puts the focus on mechanisms to ensure efficiency and profitability through strategic, streamlined and well communicated business processes. Organizations are seeking systems, tools and best practices for managing and optimizing their business processes. The focus in 2015 is doing more with less, as the industry shifts from volume to value. Efficient business processes allow organizations to operate with fewer Full Time Equivalents (FTE’s) and leverage existing resources. To this end, oil and gas companies want to know: How to simplify and streamline processes to ensure adoption and value realization How a down market creates the opportunity to reinvest in people and talent, and in process optimization and enhancement How tools like Business Process Management (BPM) support our process mapping and optimization Which change management best practices can equate to top-down sponsorship and process improvement success - How to build a business case for process changes Accountability is essential to drive adoption and sustainability of process improvement – which are the best ways to ensure accountability and process governance and who owns the governance Learnings from others the process improvements they have implemented across all functions What value can Solution Manager, SAP ALM & ARIS add What are the best practices in process automation and how can we ensure we aren’t automating bad processes How to improve process to result in better Master Data (MD) and transactional data How to change from a pre-established and well-defined process that requires data stewards, process owners, and everything must be mapped – what are the best ways to map and what is the value of a central process management group © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 6 6. Indirect Supply Chain, Logistics & Procurement 6.1 Logistics Improving logistics processes equates to profitability. Organizations are seeking mechanisms, processes and tools to optimize routes, reduce costs of transport and more accurately capture transportation and logistics data to drive more strategic decision making across the supply chain organization. This can be done by simply planning better and the impact of this logistics planning can improve safety, increase productivity and save money. Topics of greatest interest include: How organizations can reduce cost of freight as a percentage of revenue What the best practices and processes are to reduce transportation and logistics costs Ways to determine best modes of transport for specific goods and suppliers How SAP can help plan and manage logistics 6.2 Procurement & Spend Analytics Depending on the supplier and the project, the total number of vendors can be quite disparate. Whether or not it is optimizing efficiencies, organizations need to track high volume suppliers for spend analytics or manage the vast supplier network. Organizations are seeking ways to get smarter about their procurement processes. Procurement organizations require a greater clarity of scope, want to better understand their suppliers supply chain and want to leverage the supply base in a dynamic market. Oil and gas companies want to know: What the best practices are in procurement and spend analytics are in the oil and gas industry How Ariba has been implemented, and what the common challenges and best practices are for using Ariba to drive procurement processes What are the latest advancements in procure-to-pay functionality and how can the Ariba Business Network be best leveraged for greater efficiency, to cut costs and drive bottom-line profitability? Ways to ensure the organization has a transactional spend-efficient procurement process Determining the right approach or best practice for given core tasks, and the framework for determining when to steer people toward the right procurement model How the system can assist organizations in managing relationships with suppliers; for example, outline agreements, contracts for services, etc. How to manage a procurement process when you don’t know exactly what you’ll need to buy Strategies to create stronger partnerships with your vendors to enable automation, and gaining a greater understanding of what is ‘common practice’ in automation How others have developed a deep internal partnership between operations groups and their Supply Chain groups How to overcome the reluctance to tie services and consumables to a plan Mechanisms to increase the integration across modules to support real time knowledge and operational awareness How mobility can be leveraged to fast track requisitions, approvals and Purchase Orders (PO’s) in Procurement 6.3 Contracts Management © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 7 Reducing contract leakage and maximizing the partnership are key foci in 2015. Discipline is everything when capturing transactional data - work completed, and measured against what was contracted is a vital piece of the process with which many are grappling. Common theory is that more than 30% of contract value is lost after signing, so ways to ensure contract compliance and value realization are of the utmost criticality. Top topics of criticality include: How organizations know they are getting the prices for which they signed contracts How to track the procurement of services and value realization against contracts How systems like SAP’s Supplier Relationship Management (SRM) and Materials Management (MM) can support contract management and value realization, and how these systems can integrate with other supporting systems to create end-to-end visibility What if my suppliers had an automated way to self-serve 6.4 Materials Planning Planning what and how much material will be required at any given time is a constant challenge for organizations. Operators will be the first to tell you, sometimes “we don’t know what we will actually need until we are operating.” Strategic plans, agility and an optimized inventory allow organizations to respond quickly and maximize uptime. Supply Chain professionals are requesting information on SAP’s tools, but they are also seeking to learn more about the fundamentals of Material Requirements Planning (MRP) and integrated planning to improve their use of the system. Oil and gas companies want to learn: How to understand and refresh their knowledge on the basics of MRP Strategies for optimizing planning processes to reduce inventory while maximizing a quick respond Best practices in Maintenance, Repair, and Operations (MRO) inventory management and tracking Best practices for working with Vendor Managed Inventory and mechanisms to optimize inventory Integrated Planning - how to create a strategy and direction for integrated planning 6.5 Linking Your Supply & Maintenance Organizations Most businesses experience tension between their operations, maintenance and supply organizations. These groups are often misaligned, as a result of conflicting scorecards and objectives. Topics here include: Bringing Supply & Maintenance to one table, and which organizations have achieved complete success How can the Asset Information Network be leveraged? Using SAP technology to aid the alignment - Integrating Materials Management (MM) and Plant Maintenance (PM), or are their third party tools in this area – what they look like and what they can achieve Integrating Plant Maintenance, Purchasing, Transportation, Inventory Management and Warehousing Spares control and management to meet maintenance needs Stores optimization and setting minimum - maximum levels with cross-functional involvement Managing an aging refinery or site, preparing for decay and redundancy on spares levels over time Identifying and managing redundant stock with effective inventory optimization © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 8 7. Asset Integrity, Maintenance & Reliability Asset value maximization is critical in 2015 where margins are tighter than ever. Organizations want to sweat their assets and ensure their reliability to maximize production uptime. When a business processes 700,000 barrels per day, 1% increase in reliability would yield an additional 7,000 barrels. Reducing decline and pulling small margin forward is very attractive, and reliability improvements are a very tangible way to effectively achieve this. The oil and gas business is one in which price can’t be impacted, only production throughput to impact margins. Many oil and gas companies have moved from best of breed solutions to the SAP PM/Enterprise Asset Management (EAM) solution. Oil and gas companies want to learn: How to properly use the functionality to increase reliability How to drive adoption and usability (including mobility for certain processes/transactions) How to leverage the integration of EAM and supply chain and finance? How mobility solutions can drive field data capture, routine maintenance inspections and other routine tasks Reliability & Asset Management professionals want to hear what tools and reports are available to manage budgets and spend – MCB (Maintenance Cost Budgeting), BPC (Business Planning and Consolidation), WBS (Work Breakdown Structures), internal orders, cost centers, third-party tools and interfaces What organizations are excelling at Management of Change (MOC) How to improve integrity management, their predictive maintenance approaches and work to achieve greater operational alignment and workforce competency 7.1 Maintenance Scheduling Effective work scheduling is critical to effective work management and execution. In recent years, graphical scheduling tools have become available within SAP, joining the suite of available third party tools. Whichever tool you use, effective scheduling and capacity planning remains a huge challenge, embracing both the system capability and the business processes used. Topics here include: Tools - Overview and experiences of the available scheduling tools – Planning Board (SAP capacity planning), MRS (SAP multi-resource scheduling), GWOS (Prometheus Graphical Work Order Scheduler), interfaces to third-party scheduling tools (Excel, Project, Primavera) Integrated production and maintenance planning Job prioritization based on asset criticality and risk Successful approaches for job planning and scheduling in a SAP environment through end-to-end processes, organization/roles/responsibilities, integrating contract planners/schedulers 7.2 Designs for Enterprise Asset Management (EAM) An organization’s assets must be managed as well as just maintained is growing every year, and in 2015 there is strong interest in how SAP can support the organization’s efforts in asset management. Oil and gas companies want to know: Where SAP is headed, and what is SAP’s development direction with asset management, asset performance analysis What tools and technology are available to manage asset lifecycle management © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 9 How to align SAP data and processes with ISO 55000 requirements 7.3 Using Asset History for Better Decisions The range of master data extends from the assets themselves (functional locations, equipment) through their attributes (classification, Bill of Materials (BOMs), to their routines (task lists, maintenance plans). Oil and gas companies want to know: What the best practices are in predictive and preventative maintenance in all industry segments and how accurate asset data can be best leveraged 8. Finance, Accounting & Capital Management For years, finance and accounting has been viewed as a core SAP best-in-class solution with tools like FI/CO. Now, in 2015, organizations are seeking successful use cases in how organizations are leveraging their finance and accounting capabilities to support agility and response to ever evolving regulatory changes. Cost control is critical to success in 2015 and as such organizations want to accelerate and automate their transactions and processes. Top interests include understanding how to better manage the complexity of Authority for Expenditure (AFE). Is this a technology question or a matter of discipline? There is a whole industry of workflow tools that helps you get these approvals across all Joint Venture partners. How do we get as good at capital management as the best industries out there? Clearing out open ARs is not a priority in Oil & Gas. It is not perceived as a value to operations, leading to poor practices around spend visibility. In the case of an operator spending $10 million on a well, how do they get that capital allocated? They’ll have to track, record and show the workings. AFE is owned by Operations and accounting for the AFE is owned by Finance. The system lives between them and internal approvals are required. The complexity is that the land is owned by a number of organizations and so the operating organization needs to get the other oil and gas investor companies to contribute, too. If they can’t issue an invoice in time then the operating organization pays up front. The problem is that the operator can end up with millions of dollars of unbilled costs. Other interests include: How to go from strategic capital planning and the allocation of capital to the execution of capital and to the ability to show a return, as an integrated closed loop process Any SAP tools that can help achieve this What role SAP’s BPC tool plays and where the most successful use cases are; also information about SAP effective use of BusinessObjects What SAP’s and the partner ecosystems current and future solution offerings are in the finance and accounting space How to get accounting data to end users quickly and accurately Best practices with integrating finance and accounting systems with other systems in the value chain How to better align operations and financial data Month end - How to have more soft close type functionality built in through the month to reduce surprises at month end and accelerating the financial close out process © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 10 8.1 Joint Venture Accounting (JVA) & Production Revenue Accounting (PRA) For every barrel of oil that an organization produces, it must spend money and collect money. Very often there are numerous stakeholders from the operating oil and gas businesses, through to partner organizations, the state, Federal government, the native (tribal) owners of the land. Oil and gas companies want to know how to use SAP’s PRA solution to work out what to pay to whom. Other topics include: SAP’s JVA roadmap, and tools that are available There are some smart third party bolt-on solutions who partner with SAP around land management. Organizations want to know how they use what they have to manage this better, and to identify any best practice SAP’s PRA roadmap and the vision for its integration into field data capture systems Globalization of PRA – interest in the industry to support a PRA system that can work globally Best practices in PRA data extraction How SAP or other companies can support developing a better edit process in PRA, and how we can improve access to data with a streamlined user experience 9. Operations & Production Success in upstream operations equates to maximizing production output, reducing risk, optimizing material resources and reducing costs across the board. 2015 is a challenging year that is focused on wellhead profitability, and reducing costs while simultaneously getting the most out of existing operations. In a commodity market such as oil and gas – the producers are unable to augment the price of the product – thereby placing the profitability focus solely on reducing the production cost per barrel. Community members are eager for solutions that will allow them to close the gaps in the decision making loop, integrate across functions, and make confident real-time decisions in the field. Understanding the effectively leveraging the interdependency across functions is essential to driving operational integrity and excellence. What is SAPs offering in this space? Oil and gas companies are interested in hearing what SAP and the partner ecosystem can together provide. Are there other co-innovation solutions that are available, and what partners have the best solutions? While the backbone of the solution is still Pi or SCADA data coming off the operation, SAP now have an offering in production forecasting, target setting, dealing with production loss and improvement, actual quantities. Further developments are being enabled by IT/OT convergence. Key topics are: The chief mechanisms, tools and processes to maximize wellhead profitability Oil and gas companies are interested in hearing from other oil gas companies who have gone live with SAP operations tools – identify the greatest successes and ROI’s being realized SAP’s offering in remote logistics management Best practices in the capital-to-operations lifecycle and how efficient/effective handoffs look like Best practices in integrating operations and finance systems How to capture and validate field data to drive timelier and efficient decision making What are best practices in production allocation, forecasting and deferment? © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 11 Best practices in Production Revenue Accounting (PRA) Tools that are available to standardize and automate functions such as procure-to-pay and spare, transportation, warehouse and resource management How to better coordinate field logistics How are organizations best managing their rentals? What are the best practices in land and lease management? How can SAPs suite of tools support more effective real estate management? How we can reduce time and effort required to order, track and report on ordering and delivery of field services 10. Large Capital Projects In 2015, more than ever, oil and gas organizations need to be strategic and smart about where they are spending, implications of capital projects on cash flow and ensuring a rapid return. Investments in riskmitigated, strategic and well-orchestrated capital projects are the linchpins for stability in oil and gas companies. The most successful organizations are those that have married the business strategy with a capital projects program that can be impeccably executed. With the consequences of poorly planned and executed capital projects being catastrophic and potentially fatal, the need to ensure that capital funds are properly channeled and utilized is paramount to gaining a competitive advantage and ensuring return on investment and driving shareholder value. Organizations are searching for solutions to empower them to more effectively improve the management and execution of their capital investments through a focus on optimizing the integrated portfolio plan, leveraging the complex supplier/vendor ecosystem and streamlining the procurement and sourcing processes. Examples of questions posed by the community are: We need to manage costs more than ever – what are the best practices and tools to do this? How can we maximize capital portfolio valuation and competence? How is cross-functional involvement in capital project criticality driving capital spend efficiency? What are best practices in process and systems support for projects controls? What is the integration point with Engineering, Procurement and Construction (EPCs)? How to manage projects at a low cost out of GBA budget while maintaining operations? How can technology be utilized to more effectively plan large scale capital projects? What SAP solutions are available to drive end-to-end supplier management and continuous supplier development? How can automation and access to real-time data lead to greater efficiency in the procurement and sourcing processes? How can we eliminate failure and rework through a more clearly defined and executed procurement process? What is the best practice in terms of using SAP to run large Capital projects? What tools should be used? How are tools like Portfolio and Project Management (PPM) and Project System (PS) being leveraged? Where are the successful use cases? Integrating existing tools with other project management solutions Are any oil and gas companies able to get real time analytics from these projects rather than waiting until project completion? © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 12 11. Maximizing Technology Efficiency, Delivery & Innovation 2015 is the year of operational efficiency. Throughout the value chain, leaders and management are tasked with driving greater efficiencies from cutting workforce expenses, to automating processes, to prioritization of all expenditures. The same holds true in technology and IT departments – projects must be efficient, streamlined, cost-controlled and provide immediate return. More so, organizations are auditing to review their prior investments and unlock existing functionality. Within the past 10 years the industry has seen the growth of Centers of Excellence – the industry wants to better understand the best practices in launching a new COE, ways to best maintain existing COEs and how COEs are driving technology delivery. 11.1 Efficiency In an environment where the focus is on cutting costs – how can technology best be leveraged to automate processes to reduce the workforce and improve accuracy of transactions? What are the mechanisms to reduce system customization through process standards? We need to get the most out of our Shelfware What analyses are companies doing to prioritize work around revenue generation? Best practices to adapt to value management Who owns and should own technology spend? The business or IT? Mechanisms to eliminate IT being viewed as a cost-center as opposed to an investment What SAP and third-party tools are being used to track IT and technology projects and their return? What are the most successful use cases for SAP PPM and Solution Manager? What KPI’s and metrics are being examined? 11.2 Functionality & Delivery Operating in the post-internet era – consumers of technology have an expectation of rapid technology deployment. Speed of delivery and ability to demonstrate an immediate ROI are critical. Functionality and customization need to be balanced against time to market. How do we best prioritize with a limited budget the list of functionality our business needs? What best practices can we apply to increase speed to market of technology projects? Speed of delivery increases when you are more flexible around modifying your business processes to meet out of box functionality – understanding the right balance What are the built-in tools with our current technology investment than can accelerate delivery? 11.3 Crafting the Technology Roadmap Oil and gas IT organizations are continually fighting the notion that they are cost centers in the business. They are eager to understand how to better rationalize and communicate their technology roadmaps and get the buy-in from the business. The consensus is however, that technology can be strategic business enablers, can propel organizations in front of their competition and enable organizations to maximize efficiency and profitability, particularly in a dynamic market. © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 13 We need to better understand industry solutions for oil and gas in each piece of the value chain and across all segment We need to better understand the partner ecosystem – all partners are eager to tell us everything they can do – but what we want to know is what are they best at? Finding less pain in implementing upgrades and support packs What are the best practices in SAP sustainment and outsourcing? Understanding when to do upgrades internally vs. outside vendors Best practices in upgrade testing and who is doing the testing? The Business or Centers of Excellence (COEs) or IT? What are the best practices in implementing support packs and must they occur every year? How can we identify what we currently own (past investments) that can be turned on? Road mapping the application landscape that meets the business requirements We need an organization wide BI strategy and how do we get there Tying technology roadmaps to business requirements With the pace of change being so fast – can we accurately develop long term roadmaps? 12. Risk Mitigation, EH&S & Compliance The last thing any oil and gas organization needs in 2015 is an environment or workforce catastrophe. Preventing against critical life/safety failures equates to financial savings. An ever growing component of the risk mitigation envelope is the growing cybersecurity threat. Organizations must protect themselves, their infrastructure and their data from external and internal intrusion. From a process perspective, oil and gas companies feel ahead of the trends on EH&S reporting. Organizations are interested in what SAP could deliver in the EH&S space by way of solutions. Given that companies already have solutions today (often not integrated best of breed solutions), they are interested in why they should go with SAPs EHS? It was felt that with statutory reporting requirements changing nearly annually, they might be better served to implement cost effective third party solutions for reporting. 12.1 EH&S, Risk & Compliance If an organization goes with the SAP solution, what is the integration like? If integration is the primary driver for going SAP and if that isn’t perfect yet, then should they wait? What is the business case to go SAP? Is SAP’s Governance, Risk, and Compliance (GRC) solution the answer for EH&S? Managing Risk and Safety - Job risk matrices for safety, environment and production Job risk assessments and Job Safety Analysis (JSA) Identifying and managing statutory and other critical work Work Clearance Management Certification, permits to work and clearances management Safety for contractors on major projects/shutdowns – what is best practice? What tools and practices can be followed (with evidenced success) that allow organizations to track compliance and be able to respond rapidly to quickly evolving regulatory changes? Often organizations respond after a critical incident or after paying expenses fines – how can we better respond proactively to mitigate risk? Best practices to manage Sarbanes – Oxley (SOX) compliance 12.2 Cybersecurity © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 14 Best practices in internal data layer security What are the best ways to segregate duties as defined by security profiles? Best practices in workforce and physical infrastructure security Security at the site level is a key focus – intrusions are not always detected, and if so, can be delayed Oil and gas companies want a detailed understanding of cybersecurity of cloud solutions Ensuring cybersecurity in mobile devices. What are the security implications of “bring your own device” (BYOD) policies and what is the legality? How can we demonstrate to our leadership that cybersecurity threats and gaps have been minimized and eliminated? 13. Hydrocarbon Supply Chain From trading and scheduling to retailing and marketing, optimizing processes and tools to support the hydrocarbon supply chain is of great interest in 2015. Organizations are seeking the best practices to drive strategic and timely decision making and trading, as well as mechanisms for retailers to maximize their customer base and increase spends per customer. Commercial Sales and Marketing driven by contract management, SLAs, etc. are of great interest – in particular, the difference in solutions between on premise and cloud. Hydrocarbon processing visibility including analytics and reporting at the refinery level are of great interest. Quality Management as applied to the product is being driven by the IT/OT convergence at the plant/refinery level with effective operations dashboarding. 13.1 Commodity Management SAP have just developed and made available an oil and gas commodity management solution late in 2013. This is as a result of industry demanding a solution from SAP, so as to integrate a Commodity Management solution into their SAP back-end. How can tools like Trader’s and Scheduler’s Workbench (TSW) and Commodity Management be leveraged to drive profitability? What other third party solutions are available? What are the successful use cases? What is SAP’s roadmap for commodity management? 13.2 Hydrocarbon Inventory Movement & Tracking Moving bulk crude and hydrocarbons from the point of origin to the point of delivery is another key process that logistics teams at oil and gas organizations want to hear solutions around. They must make decisions around how best to move product, what port to move it to, best modes of transport, etc. TSW is SAPs solution that can help with this. Oil and gas companies want to hear from others who are mastering this process and also using the TSW tool well. What tools are organizations using in cost per molecule analysis? What are the best practices in transportation management and do they vary based on mode of transport? How can effective unit conversions increase profitability? What tools are available? © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 15 Some solutions and tools are only able to be used by organizations in the US – what solutions are most effective in geographies around the globe? How are hydrocarbon supply chain tools able to integrate with backend financial systems? What are best practices in trading and scheduling? Are there any third party tools available in this space and what are oil and gas companies using effectively? 13.3 Oil & Gas Secondary Distribution This refers to refined product storage and distribution, from fuels delivery to POS processing at the pump. Oil and gas companies want to learn how to optimize delivery and invoicing of refined products. Oil and gas companies also want to reduce their DSO (Days of Sales Outstanding) so as to bolster cash flow. With fuel prices remaining low, margins are even thinner – how do retailers grow and maintain a loyal customer base to maximize sales? SAP have a great solution in this space with many European oil and gas companies, but not a large amount of adoption in North America. What is the business case? What are best practices in fuel scheduling and distribution optimization? How can new tools like RF&O support regulatory reporting? What is SAP’s current and future suite of offerings for retailers and marketers? 14. Enhancing the User Interface & User Experience (UI & UX) Enterprise-wide tools and platforms come with robust functionality, however, with that ability to maintain transparency over all aspects of the business comes along with challenges of how to make the system user friendly for all end-users. If the workforce isn’t compelled through simplicity and effective training to use the system, effectiveness is greatly undermined. Organizations want to capture data when and where that data happens. Organizations need to develop a useable workflow, if they don’t, they know that they will automatically lose accuracy in the data. This is where organizations lose value - they don’t get good data and they don’t get it early on. Operators in the field aren’t looking for ways to use technology, so if it appears too hard, they won’t use these tools. Workers are comparing the ease of use with an iPad or with sites like Amazon - industry-leading consumer user experiences which provide easy interaction and intuitive functionality. How do the tools on offer all fit together to achieve the right fit for your business Oil and gas companies want effective use cases of deploying and maintaining FIORI and SAP Screen Personas Understanding which tool could work best to meet your business requirements and calculating the cost comparisons for each of them Find out from organizations already using these technologies – hear how they have benefitted the business, created a seamless interface, reached their business case and their lessons learned? Which third-party user tools are available and the impact of potential interface issues – including Microsoft SharePoint? Where should an organization focus deployment of usability projects? © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 16 Conclusion 2015 is a dynamic year for the industry. Oil and gas organizations are fighting for greater cost and operational efficiency and see a necessity for people, process and technology to converge to do just that. More so, organizations want the best practices in processes and technology to position themselves in front of their competition when the market stabilizes. This research report will form the blue print for the community gathering in Houston in September at the Best Practices for Oil & Gas conference. It is important to note that the presenters sharing their evidenced best practice solutions in Houston will predominantly be business process owners and users of technology, rather than the IT groups that support them. The community is at its most powerful when practitioners, service providers and technologists collaborate to sketch the best path forward towards best practice. © THE EVENTFUL GROUP PTY LTD 2015 PAGE | 17
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