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)
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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.
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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:
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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:
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What tools are organizations using to track and manage talent
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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:
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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:
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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
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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
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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
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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:
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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
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BusinessObjects and HANA be leveraged to accelerate analysis? With regards to reporting and analytics, oil
and gas companies want to hear:
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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:
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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:
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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?
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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
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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:
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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
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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:
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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:
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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
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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:
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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:
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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:
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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
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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:
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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:
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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:
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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
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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:
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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:
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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
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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:
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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:
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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?
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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:
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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?
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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
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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.
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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.
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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
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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
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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.
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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.
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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?
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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.
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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.
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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?
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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.
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