Oracle and Accenture Integrated Activity Planning and Scheduling Houston_FINAL

JW Marriott

Houston, Texas

June 9, 2014

Improving speed and efficiency while reducing

cost in unconventional shale plays Integrated Activity Planning & Scheduling (IAP)

2

What keeps the c-suite awake at night?

Stakeholder

demands

Return on

capital

employed

Complexity

CEO CFO COO

Copyright © 2014 Accenture All rights reserved.

Increased

Complexity

Poor

Execution

Loss of

Control

Poor

Business

Results

Reactive

& Poor

Decisions

3

Increasing business challenges and complexity

Break out of the vicious cycle - “Execution Excellence”


4

Value chain convergence

Increasing complexity

Merging of physical goods with information flow

Proliferation of available data and information

Improving business intelligence and visualization

Flexibility to quickly adopt and adapt to changes in the business environment

Customizing solutions for different segments of customers and business

Digitalization is disrupting and converging traditional value chains

Financial

supply chain

Physical

supply chain

Information

supply chain

Talent

supply chain

Social media

Mobility

Analytics /

big data

Cloud

Value chain

Digital technologies

Business Digital supply

network


Unconventional well delivery challenges

Increasing complexity and drilling costs

Immature organizational capability and experience

Reactive decision making

Lack of fully integrated activity planning and scheduling

Inaccurate forecasting and predictability

Supply chain and procurement inefficiencies

Significant non productive time in the field

Field Develop

Plan

Lease & Title App

Staking & Permitting

Water Sourcing

& Mgt Construct Drilling

Complete & Flow Back

Regulatory Complete

Operate

Poor “Execution Excellence” across well delivery value chain

Well Delivery - Concept to production value chain

5

Visibility lacking

between operations

and supply chain

Organizational silos

with reactive

execution

Manual processes

non-standard and

disconnected

Individual well site

focus vs. basin

wide approach

Multiple

disconnected data

and technologies


Numerous Spreadsheets to “Single Integrated

Activity Plan” Leading to an IAP Management

System Where are organizations today?

Disconnected

Spreadsheets &

Whiteboards

Master Planning &

Scheduling (Offline)

Struggling to implement fully integrated activity planning and

scheduling which is essential for safe and efficient well delivery

~75% ~20%

Integrated Business

Systems – Digitally

Enabled

<5%

Copyright © 2014 Accenture All rights reserved. 6

High performing well delivery management system

Strategy

Vision: Adopt a “Factory” style, integrated well delivery approach

7 Copyright © 2014 Accenture All rights reserved.

Units

Pads

Wells

Wells

Digitally enabled

Integration of business systems

8

Seven elements leading companies are getting right

Value Chain

Execution Excellence

Well delivery management system

Supply chain management

Operational excellence

Organizational effectiveness

Business performance management

Strategy deployment

p

Technology enablement


Reduce

Cycle Time

Reduce

Cost

Improve

Forecasting

Improve

Operational

Excellence

9

1. Strategy deployment

Establish true north – WHY?

Define strategic clear goals and objectives

Alignment top to bottom

Holistic basin and well development plan

Limited organizational boundaries and

bureaucratic constraints

Execute strategy more consistently and

reliably than competition

Without strategy, execution is aimless

Without execution, strategy is useless

=


10

2. Well delivery management system

Digitally enabled integrated activity planning and scheduling

well delivery management system

Integrated activity planning and scheduling (IAP)

Digitally enabled

Efficient

workflow

Integrated

planning

and scheduling

“What if” scenario

planning

Proactive

materials and

management

Production and

financial

forecasting

Cost

controls

Well Delivery Process

Integration of business systems Copyright © 2014 Accenture All rights reserved.

11

Overall integrated schedule for the entire basin

Inventory of ready wells with visibility of potential scheduling issues,

enabling proactive resource, supply chain, pad and rig management


Integrated with business systems

Resource planning, forecasting and cost management

Integrated schedule with disciplined cost control

Reporting and forecast updates at asset and corporate level

“What if” scenarios

Benefits

Improved forecasting: cost/accruals, forward capital requirements,

production, OPEX and cash flow, driven by integrated well schedule

Predictable financial performance and insight into workforce requirements

Integration of drilling schedule, cost and production forecast to

increase confidence and predictability



Digitally enabled

Current state:

Supplier 1

Supplier 2

Supplier 3

Supplier 4

Well Readiness

“Virtual Warehouse”

Consolidation Point : Vendor managed inventory Reserved inventory Returns Excess Inventory

Production Basin

Transportation Services: Carrier management Planning and execution Freight bill audit and pay Expedited services Milk runs

3. Supply chain management

Future state:

Pro-active “Kit”

Logistics with Managed

Transportation

13

“Our Rig Supervisors

make 700 phone calls

per well delivery”

Proactive kit logistics can reduce field supervision fire fighting to

increase focus on efficient and effective well delivery


Digitally enabled

Manual work processes

Demand planning and materials management

Structured demand planning

Long term contracts with Information sharing with vendors

Benefits

Reduce cost of goods and services

Enable vendor managed inventory

Standardize bill of material for well types

Limited crisis “spot” purchases

Minimal non productive time associated with lack of materials

“What if” Demand Planning Proactive Materials Management

Shared insight to material and services forecast with suppliers

14 Copyright © 2014 Accenture All rights reserved.


Digitally enabled

15

4. Operational excellence

State of alignment for achieving business strategies

Holistic approach to leveraging improvement methodologies

Focused, simplified and constantly attacking complexity

Corporate culture committed to continuous improvement

Achieved by design and not by coincidence

Sustained with the right attitude, the right mindset and the right competencies

Strengthen economic and competitive position of the business

Reducing

cycle-time

for project

delivery

Reducing

productivity

losses

Reducing

variation in

supply

chain

Sustainably

lowering

costs

Maximizing

value

delivered

from portfolio

Digitally enabled


16

5. Organizational effectiveness

Strong and visible leadership

Deep workforce engagement

Role clarity and accountability

Right technical, functional skills

and capabilities

Effective knowledge transfer

Sharing of best practices

Corporate culture committed to

continuous and deliberate

improvement

When leaders don’t lead,

Followers won’t follow


Asset centric organization functionally supported

Integrated Field Development Plan

Fu

ncti

on

s

Asset Team Leads

Supply Chain &

Operations

Drilling

Completions

Facilities

Pad

Construction A

sset T

eam

Asset T

eam

Asset T

eam

Asset T

eam

Asset T

eam

Asset T

eam

Asset

Planner

Asset

Planner

Asset

Planner

Asset

Planner

Planner

Planner

Planner

Master

Schedule

Integrated Planning & Scheduling Meetings

Asset KPI Scorecards

Fu

ncti

on

al K

PI S

co

recard

s

Asset Plans

Functional Schedules

Breaking down organizational silos to operate as a aligned,

collaborative and integrated team with shared goals and metrics


Digitally Enabled

Lead

Planner

Asset

Planner

Asset

Planner

Inte

gra

ted

Tech

no

log

y P

latf

orm

17

Digitally Enabled

18

6. Business performance management

Insights and information

Visibility of performance

Manage by exception

Increase accountability

Closed loop

management system

High performing organization

Alignment

Near real–time data

collection (asset,

production)

Automatic filtering

and data quality

improvement

Merge of data from

multiple sources

Transform data

into insights

Visualize the Right info

to the Right people

Right time

Digitally enabled

Asset,

planning &

scheduling

metrics

Corporate

metrics

Functional &

Individual

metrics


Key performance

Indicators and

dashboards

19

7. Technology enablement

Connected, collaborative, contextual and capable

Revolutionize how data is acquired and processed

Visualization of entire well delivery value chain—end to end

Intelligent analytics and information

Improve speed, quality and effectiveness of decision making

Every business is a digital business


Big data Cloud

Data

velocity Mobile

Digital

well Digital

pipeline

Predictive

analytics

Real-time

process

visualization

Integrated activity planning & scheduling systems map

Scheduling • Well Docs • Locations • Rigs • Fracs • Facilities • Start-up

Cost Management

• Program Funding

• Budgeting • Field Est. • Accruals • Actuals

Risk & Issues Management

Rig & Activity Management

Prepare, Pre-Spud Docs: GeoProg,

Permits, Land, etc.

Reports & KPI Scorecards

Workflow Management

Reporting / Tracking

Workflow+Doc Management

Field Development Plan

Workflow and

Analytics

Planning and

Scheduling

Well Info Database

Morning Reports

Wellsite Management

Field Cost Estimating

Inventories and POs

Reporting

Accounting, AFEs, Accruals/Actuals

Maintenance Management

In

terf

ace

Cu

sto

m

Inte

rfa

ce

Bottleneck Reporting

Supply / Demand Forecasting

What-if Analysis

Supply Chain

Integrated S&OP Process

Inte

rfa

ce

Interface Interface Interface


ERP

Well Systems

20

Oracle’s industry leading project portfolio and value chain planning products

with Accenture’s industry expertise, services and value proposition

Leading project portfolio

and value chain

planning software suites

Comprehensive solution

Integrated planning

and scheduling

What if / scenario

enablement

Electronic workflow

Analytics / reporting

Easy to use

Flexible deployment

Leading global

management consulting,

technology and

outsourcing services

Comprehensive solution

Workflow optimization

Systems Integration

and training

Value driven culture

Fit for purpose

Results focused

Change management

Summary: Jointly developed well delivery solution

KPI Dashboard / Performance Management

Field Development Plan

Well Readiness Rig/Drilling

Schedule Mgmt

Site & Facility Schedule Mgmt

Completions Schedule Mgmt

Cost Management and Forecasting

Supply Chain, Material and Logistics Planning

Integrated to Financials, Procurement, Inventory


Change management

Digitally enabled

Integration of systems

Seven Key

Organizational Capabilities

Seven ways effective IAP drives value in well delivery

1. Strategy deployment

2. Well delivery management system

3. Supply chain management

4. Operational excellence

5. Organizational effectiveness

6. Business performance management

7. Technology enablement

Value Drivers

Reduce

Cost

Reduce

Cycle Time

Improve

Forecasting

Labor, materials,

goods and services

Capital efficiency

Predictability

HES & field productivity Improve

Operational

Excellence


Improving capital efficiency, time to value, cost and reducing risk

22

Numerous Spreadsheets to “Single Integrated

Activity Plan” Leading to an IAP Management

System Where is your organization today?

Robust integrated digitally enabled activity planning and scheduling

is essential to ensure safe, reliable and cost effective operations


Disconnected

Spreadsheets &

Whiteboards

Master Planning &

Scheduling (Offline)

~75% ~20%

Integrated Business

Systems – Digitally

Enabled

<5%

24

Final remarks

“Perfection is not attainable,

but if we chase perfection

we can catch excellence.”

Vince Lombardi

(USA NFL Football Coach)


Oracle and Accenture Integrated Activity Planning and Scheduling Houston_FINAL

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