Part 2- Build vs. Buy: Why Companies are Moving Off of Homegrown Solutions
When it comes to the software midstream uses to manage liquids transportation, there are two schools of thought. On one hand, there are advantages to buying commercial software, including lower total cost of ownership (TCO) compared to building custom solutions. Instead, for decades, midstream transportation providers have opted to build versus buy. Given the competitive nature of the business, there has been a prevailing trend to develop liquids transportation solutions in-house using corporate knowledge to custom fit the system to their business needs.
So far in this series on digital trends in liquids management I’ve discussed the reasons why this link in the energy value chain is undergoing rapid change and how service providers are managing growth and staying competitive. The topic of today’s post delves into why companies are moving away from custom liquids transportation solutions.
Midstream is Getting Out of the Software Business
For decades, liquids transportation service providers have relied on computing power to manage their high transaction business. Service providers in this space are motivated to efficiently move hydrocarbons along complex transportation systems, automate accounting and reduce overhead as much as possible. These system-gained efficiencies allow customers to attract and retain producer contracts in a highly competitive market. For decades, liquids management software solutions that service providers built themselves largely worked. Such solutions provided a competitive advantage, especially given the limited software products available.
Home grown liquids transportation solutions served their purpose in a fairly static market environment. With incremental production growth in US basins, it was easier to catch up and build out physical and digital infrastructure incrementally. However, the Shale Revolution and production momentum of the last decade have propelled midstream into high gear and the record level of transactions along pipelines is stressing digital systems to the breaking point.
Internally developed solutions are often owned and maintained by information technology (IT) departments. Often IT is asked to prioritize cost reduction, standardization, and infrastructure security. Enhancing a legacy system for new business scenarios is necessarily given lower priority in an overworked department. Companies who have built their own liquids transportation solutions are realizing that in order to meet customer needs they need flexibility and technology partnerships to succeed, effectively getting out of the software business and trusting in software vendors to power their operations.
The Power of Partnership
What is enabling midstream service providers to move off of their homegrown solutions are technology partnerships, not just the traditional software vendor relationship that often alienates customers. This dance takes two though, not just a one-way conversation where vendors sell but don’t, in turn, respond to what service providers need.
At W Energy Software, we truly partner with our customers. In fact, our dedication to serving customers and continuously folding in their requirements into our products is what sets us apart from other vendors. That and our state-of-the-art midstream ERP platform and Liquids Transportation solution built on the cloud.
W Energy Software offers a new way forward for midstream companies in which they know that their business will always be running on the latest technology and accounting standards. What makes this possible is our team’s commitment to customer success, continuous improvement process, and all-inclusive upgrades. Our Liquids Transportation solution includes free upgrades with your software license. Plus, enhancement requests from all of our customers are aggregated and passed on to you at no cost with every new release. The result is that W Energy Software is completely focused on powering your midstream operations and providing your team with the agility and cost-efficiency you need to succeed in a dynamic business environment.
Flexibility is especially critical as companies find new ways to move hydrocarbons along pipelines, in trucks, and on barges. And as business complexity increases – with more contracts and ongoing changes to fees and escalations – along with expanding infrastructure, more midstream companies are making the switch to W Energy Software’s Liquids Transportation solution.
Stay tuned for the next installment in this series on trends in pipeline innovation. The final post will conclude by examining the larger liquids management picture and how service providers are benefitting from a unified ecosystem of solutions for transportation, terminal management, scheduling, and financial accounting.
Ready to learn more? Let’s talk.
This is part 2 of our blog series, 3 Trends in Digital Pipeline Innovation: Liquids Management Simplified. To read part 1, click here.
|Michael Ferrante, VP of Transportation Michael earned a B.S. in business administration from Oklahoma State University. Since joining the W Energy Software team, he has helped build various modules within software, ranging from marketing to gas balancing to land administration. Michael has lead implementation projects in many business areas of the industry and is currently focused on expanding the Transportation practice area at W Energy Software with new pipeline and terminal clients.|