Q&A with Jeanne Perdue, Oil & Gas PetroComputing Expert

Q: You’ve worked in the oil and gas Industry for many years in multiple roles. What are the most prominent changes you have seen in the industry?

When I began my career as a chemist in the Texaco R&D labs in Houston, the oil companies did the majority share of the Research function, but after the downturn of the mid-1980s the service companies took over most of the responsibility - and risk - of innovation. In addition, national oil companies have grown more powerful, the Digital Oilfield of the Future has come to pass, and upstream oil and gas organizations have reorganized into multi-disciplinary asset teams.

Q:  How are these changes impacting the way oil and gas companies do business?

Digital technologies - whether you call them Smart Fields, e-fields, iFields or Integrated Operations - have changed how upstream professionals get their jobs done. Rather than sending a guy out to the field, engineers can collaborate electronically with experts and partners around the globe. Sensors of all kinds are sending a tidal wave of real-time data via satellite and fiber optic cable, and there are multiple computer applications and business processes that require different parts of that same data stream. These digital technologies are changing very rapidly, and Oil & Gas companies need to be flexible if they plan to survive in a volatile market that is boom one year and bust the next.

Q:  What are the business processes that are most affected by change?

The most digitally-integrated processes are the most affected and the most challenging. Integration of multiple disciplines and applications - such as geoscience, drilling, engineering, operations and maintenance - with back-office financial systems makes it difficult to make changes to one part of the system without causing negative effects on some other part. The upstream workflows are so complicated and involve so many disciplines, software programs and iterations that even changing something small in a process can quickly become a really big deal.

Q:  Are oil and gas industries getting more focused on changing and improving their business processes?   If so, what actions are they taking?

Most of the larger companies have standardized their IT infrastructure with service-oriented architecture (SOA). Also, several data standards consortia have developed workable data types and definitions. So now the foundation has been set for enabling technical professionals to take data from anywhere, run it in whatever technical software modules desired, and send output to any other person or application in the organization seamlessly. What they need to do next is to assess their business processes, optimize them, and then create a better workflow to speed things along. The stage has been set, and now is the time to build the business upon the technology. But rather than automating sub-optimal processes because "that's the way we've done things for years," organizations need to take the time afforded by the current downturn in the industry to really understand and analyze their business processes.  There are software tools available now - business process management (BPM) and business process analysis (BPA) and software tools - that allow you to make the most of the IT infrastructure foundation and very efficiently zero in on the problem areas so you don't waste time trying to re-engineer in a vacuum and actually can see business results from the effort.

                Major oil companies tend to call in IT consultants such as IBM, Infosys or HP or business consultants such as Accenture to help them with redesigning their workflows. With the technologies available today, they could do it themselves with the proper leadership and tools and save a lot of money.  Smaller oil companies can't afford to hire the consultants, so they just make do with their inefficiencies. An easy-to-use technology to help them through the process would really benefit these smaller independents.

Q:  How do you see business process management (BPM) and business process analysis (BPA) software coming into play?  

BPM and BPA software can provide insights into making the right changes in your organization. Not only that, but using this kind of software can also make it easier for employees to embrace the resulting changes in their day-to-day work. The best way to describe this is to relate a success story.

                Rompetrol, an integrated oil company with headquarters in Amsterdam, has grown rapidly in the past 10 years, reaching 40 business units with 9,000 employees in 13 countries. Multiple acquisitions resulted in a mish-mash of legacy systems, making roll-up of corporate-wide financial data a big chore. The company implemented the Metastorm ProVision®  BPA and Metastorm BPM® software solutions to understand and optimize their sales order process in Romania. In just a couple of months, sales order losses decreased from 8% to only 1%, and the whole process took only half the time it used to. Next, the company tackled the business process for fuel supply management. There they decreased monthly operational losses by 5%, reduced human errors in transaction recording, and even reduced payroll expense by €500,000 per month. Rompetrol has continued to roll out BPA/BPM software for four other processes in the first year and plans to continue with others in the future.

                So, what I see happening is this: BPM will get a toehold in one small corner of a company, say, joint interest billing or some other back-office process that can show quick benefits, then management will be so impressed with the results - both hard and soft benefits - they will want to experience similar success in other areas of the company. Pretty soon all of these individual upstream and downstream business processes will be integrated into an overall über-process that encompasses the entire enterprise. At that point, executives will be able to optimize profits because they will fully understand all the inputs, workflows, dependencies, risks and outputs of their corporate money-making machine.

Q:  Change is often difficult for companies to embrace.  Why should oil and gas managers and executives lead the way on business process improvement (BPI) and what recommendations do you have for selling the idea of BPM/BPI to the organization?

Change management is the most difficult facet of implementing new technology. What makes it even harder in the oil industry is the demographics: an estimated 50% of our professionals are facing retirement in 5-10 years, and some of those old dogs don't want to have to learn new tricks at this point in their career. Management needs to not only buy into BPI, but also champion it, communicate its benefits often and enthusiastically, and get buy-in from all levels of the organization throughout the design and implementation phases. Most of all, companies must have both rewards for positive participation and serious consequences for negativity and non-compliance with the new, better work processes.

About Jeanne Perdue

Jeanne Perdue is President of PetroComputing in Houston. After earning a bachelor's degree in Chemistry from the SUNY at Albany, she worked at the Texaco research labs as a chemist and information specialist. Perdue later worked as a technical editor for Hart's E&P magazine and launched the award-winning Upstream Technology magazine. She was named one of 50 Key IT Women in Energy, an SPE Distinguished Lecturer, and received a Leadership in Technology Award from AWC.

About Metastorm

With a focus on enterprise visibility, resource optimization, efficiency and agility, Metastorm offers market-leading software for enterprise and business architecture (EA), business process analysis (BPA), and business process management (BPM). As an integrated product portfolio, Metastorm Enterprise allows organizations to improve business results by better aligning strategy with execution. By combining the power of these three disciplines onto a common platform, Metastorm is helping organizations worldwide focus on the right business improvements, instill stronger governance, and accelerate time to value. For more information and success stories on Metastorm's software and solutions for the Oil & Gas industry, visit www.metastorm.com.

Jeanne Perdue