Wall Street, investors, and stakeholders are shining a bright light on the energy industry’s negative cash flow problem. Virtually every independent oil & gas company needs to tighten operations so that more revenue drops to their bottom line – the question is where and how? In a world where elimination or tightening of multimillion-dollar drilling programs are the leading indicators of belt tightening, an often-overlooked area of opportunity that has been exploited by the best run companies is their back-office operations.
We are an industry that has learned to settle for running its operations on 30-year-old technology. For the last decade, the oil & gas back office technology landscape has withered from under investment and lack of innovation. There is good news on the horizon though. Since the industry downturn hit its low point in early 2016, the need for software innovation has increased in urgency. At the same time, technology providers have served the oil & gas industry well with applications of new technologies that take advantage of the cloud and advanced computing architectures. A new wave of innovation is surging forward, and it is aimed right at our industry’s number one problem – driving efficiency and effectiveness in oil & gas organizations.
Unlocking Vast Cash Flow Potential
So, how can the oil & gas industry unlock value that we didn’t know we could unlock or that we were unable to unlock with decrepit technologies? That’s a question the brightest minds are working to solve. The hunt is on to find all of the areas across the organization where operations can be tightened up and cost savings can be dropped to the bottom line.
An area often overlooked is the keeper of the bottom line, your accounting systems, the processes they operate under, and the staff that execute them. You should be able to rely on your software partner to give you the levers to drive cost out of your company.
Cost is locked up in three areas of your accounting department.
Time is Money
Oil & gas companies have become accustomed to hours of processing and overnight runs for common processes like revenue, JIB, allocations and other large data matching / data calculating processes. In a world where everything around us is delivered with lightning speed, there is a mismatch in the energy industry where we wait hours or days for critical business data. Why? We’ve been told that data sets are large, the calculations too complex, and processes very wiry. But that’s just not true and easily disproved when comparing to similar processes, even within the industry.
If we apply the same level of innovation to accounting as we have to reservoir simulation and seismic processing, we can cut time off of critical processes, reducing cycle times from hours and days to seconds and minutes. The result has epic benefits. Time savings in processing of common accounting workflows have the potential to drive significant cost savings in oil & gas organizations by enabling faster, better decisions, by not waiting and losing focus, and by knowing an answer when we need it so that we can move on to the next task, problem or customer.
G&A Scope Creep
The efficiency – or inefficiency – with which energy professionals work is a significant driver of our cost model. Inefficiency drives the need for more people working on more tasks that take longer. The promise of technology has long been to allow teams to work better which means faster and with fewer mistakes. The reality when using aging, older technologies is often exactly the opposite. Systems become more like Frankenstein, with external processes bolted on, causing the whole process to lumber forward, ready to tip over at any moment.
In addition to inefficiency, the number of people, both functional and technical, required to manage the processes the systems are meant to be ‘automating’ creeps up over the year. New technology is like a new set of tires on your car – the ride is smoother and so much more efficient.
As underlying technologies have matured and our understanding of how to manage businesses have evolved, comprehensive, single platform systems allow for a new level of efficiency in your staff. This gives management options – options to move staff previously charged with monitoring slow, broken processes to higher value, research or customer relations types of roles. Over time, less and less personnel will be dedicated to working on the system and more and more will be benefiting from the system.
Information Technology Sprawl
More servers, more storage, more computer room space, more memory, more. For organizations of all sizes this drumbeat of more has led to a tipping point of computing infrastructure complexity and more importantly, cost. The total cost of ownership (TCO) for infrastructure has soared while energy companies continue to see a diminishing return on IT investments. Servers and the related infrastructure management devices have increased in complexity and proliferate across energy organizations, leading to a natural inefficiency that happens when any system gets too big and muddled.
How to Drop More Revenue to Your Bottom Line
W Energy Software is uniquely positioned to accelerate processing times, reduce G&A costs, and eliminate on-premise hardware overhead due to our unique architecture and laser focus on customer experience. W Energy Software is dedicated to designing and delivering software tools that are core to your organization and essential to driving cost down across your oil & gas business. Our unified ERP software platform is built to take full advantage of the cloud’s economy of scale and on-demand computing power, giving your team a solid foundation on which to run your business while delivering game-changing capabilities to cut costs, boost efficiency, and drive more revenue to your bottom line.
W Energy Software provides 4 areas of opportunity for you to transform your ERP system into a cost savings machine.
All Processes in One System
W Energy Software is the only ERP solution that manages every oil & gas business process from wellhead to city gate. This means that every cost, move, valuation, calculation associated with every molecule or barrel is transparently tracked and available to interact with. This gives your team unparalleled insight and a new level of efficiency in managing the numbers, servicing customers and stakeholders and managing your business.
Done Once, Done Right
W Energy Software brings a unique approach to keeping you current on your software. This means keeping the latest capabilities at your employee’s fingertips and keeping you current on our nickel not yours. Taking advantage of the latest technologies and advanced dev ops and testing capabilities, W Energy Software does away with the dreaded software upgrade and its mountainous cost. Our ‘managed upgrade services’, included in your license fees, keeps your system up to date with our releases, saving you significant time and money over the life of the system. The competition, on the other hand, has made it a point to monetize upgrades, effectively holding critical software enhancements hostage. That’s just not right.
Cut Research and Analysis Time
Built for speed, The W Energy Software platform allows your employees to do tasks that currently take hours and days in minutes and seconds. Faster processing leads to faster analysis meaning that your employees can be more productive with the time that they have, and you can accomplish more with fewer cycles, fewer iterations and fewer eyeballs on the issue. Speed is a force multiplier and the W Energy Software platform can allow your workforce to do much more in less time, with less effort.
Cut Your IT Costs
In the past decades, the oil & gas industry has thrown information technology and money at the problems of managing assets at scale, sustaining momentum, and staying competitive. The promise of cloud computing is to turn this paradigm on its head and allow organizations to tack cost in alignment with need. A new level of elasticity in procuring the computing power necessary is now possible, ensuring that the speed and storage that you need is available when you need it and it goes away (and off your balance sheet) when you don’t. And today, W Energy Software is the only fully integrated ERP solution built 100% on the cloud.
To thrive in today’s dynamic business and market environment, oil & gas companies must do more with the resources they already have. By empowering your back-office accounting workforce with the technology they need to unleash their full potential, producers can create tangible business value, drive game-changing operational efficiency, and uplift margins. These are the attainable goals that oil & gas companies should aim for, however, your choice of ERP software may be holding you back. Time to ditch those legacy providers and make the switch to W Energy Software.