Part 3 – Size Doesn’t Matter with On Demand Outsourcing
Presented with unprecedented challenges, oil & gas companies nonetheless have the opportunity to confidently move forward armed with technology and a new workforce model. Entrepreneur, thought leader, and trailblazing oil & gas businesswoman Elizabeth Gerbel has teamed up with W Energy Software to share her valuable point of view and explain why a “one sourcing” approach gives energy firms the freedom to focus by containing G&A costs while providing them with the elastic workforce, software, and data needed to scale up with a lean team.
By Elizabeth Gerbel, CEO at EAG 1Source
“At what point do I need to start thinking about hiring resources full time?” This is a question I am frequently asked by the energy C suite. It’s kind of a loaded question since it implies that business process outsourcing and the “one sourcing” approach I have developed have limitations. A good way to answer is “at what scale do you want to start paying more G&A than you need to?” The truth is, one sourcing can take an oil & gas business as far as it wants to go.
Before I take a deeper dive into how outsourcing your land, accounting, production, and information technology management can keep pace with growth, let’s recap what one sourcing is. Think of it as cloud computing. With one sourcing, your oil & gas team has on-demand access to the resources it needs, scale up or scale down, the provisioning of people, technology, and even data management is all managed seamlessly for you. No need to go out and hire people when you need to scale, no need to keep hunting for the right software. The best possible skills and technology are always ready for business.
With West Texas Intermediate at a comfortable level (certainly more comfortable than a year ago) and looking better for 2021, the CEOs I talk to are starting to worry about growing pains. There’s the growing pain that comes from starting to drill again and adding headcount incrementally between now and the next downturn. Then there’s growth that comes in leaps and bounds from mergers and acquisitions.
Now is when a lot of companies are starting to plan on growth of both kinds, which is why it seems like I am bombarded with questions around whether outsourcing can keep pace. Keeping pace requires more than just expanding an E&Ps human resources footprint. In the digital oilfield, incremental and rapid growth lead to bigger datasets, requiring your digital systems to evolve and flex. How does this all work in the real world?
At EAG 1Source we have an evergreen A team. Size doesn’t matter because we’ve built the talent infrastructure to meet client growth head-on. Our existing talent is adept at fractionalized work and can absorb more work as needed. The key to absorbing rapid growth, such as a bolt-on acquisition of 1,000 wells, is our deep bench of recruits, energy professionals who meet our A team standards who can be tapped at a moment’s notice. Like the cloud, resources are formed and allocated as needed, giving your team the freedom to focus on integrating new assets and moving on to the next deal.
The other half of the equation is technology and on-demand digital skills to manage the flow of accounting, land, and production data through an organization. A general ledger, lease administration, or production accounting software package that did the job for 500 wells may not flex with a big acquisition. Legacy oil & gas software and solutions designed for small-scale operations will break, leading your team to the upgrade or rip and replace fire drill right in the middle of an acquisition.
Given the variety and vintages of oil & gas software on the market today, selecting the best mix of solutions is like looking for a needle in a haystack, requiring specialized skills and an abundance of time to pick the right tools. Time and the motivation to sift software specs are not normally something most energy professionals have or love to do. And just like outsourcing HR challenges to source the best talent, EAG 1Source eliminates the need for E&Ps to hunt for the right software. We’ve done that already and will continue to ensure our clients are always running their oil & gas operations on the best, modern technology. That’s where W Energy Software comes into the story. With a meticulously designed upstream ERP, W Energy Software can scale in multiple dimensions. It can scale across workflows to encompass everything an E&P needs: financials, land management, production operations and field data capture, allocations, revenue disbursement, tax and regulatory. It can scale from a few wells to any size portfolio, empowering smaller E&Ps with enterprise-grade tech and enabling larger E&Ps to break free from legacy systems and heavy ERP costs. All in one system that simplifies the way oil & gas teams work with next-generation technology that shares a common and consistent user experience.
Bottom line, one sourcing can take your team anywhere. There are a lot of moving parts behind the scenes, which is what EAG and W Energy Software love to manage. Partnering to augment your team with top-tier talent and technology gives them more time and less distraction. And if we can reach 10,000 wells together, then there is nothing stopping us from doubling that well count and seamlessly managing growth at any scale.
I’m going to bookend this series with a real-world example of managing growing pains at Sandridge Energy, so keep an eye out for my final post soon.
|Elizabeth Gerbel has 20 years of deep oil and gas industry experience and has personally advised startups to Fortune 500 companies to everything in between. Under Elizabeth’s direction, both EAG companies have become synonymous with ‘trust’ in the oil and gas industry. Elizabeth’s passion for the industry, dedication to her clients’ success, and commitment to growing her company to best serve customers is recognized both internally and externally. Her organization has been touted multiple times as a top-tier work environment for professionals and has earned the Fortune Magazine’s Best Workplaces in Consulting for 2019 as well as Inc. Magazine’s Best Workplaces across all industries nationwide. Prior to founding EAG, she was a partner at McKinley Powell, LLC, a manager with PWC, and began her career at Andersen Consulting (Accenture). Elizabeth earned an MBA from the McCombs School at UT Austin and a BBA in Marketing from Texas A&M University.