PIDX Global eCommerce Deployment and Change Management … · PIDX Global eCommerce Deployment and...

1 T. Thomas

July 2012

Mkt & Sales and BI

Process & Business Systems

Nabil Mazzawi

May ‘08

PIDX

Global eCommerce Deployment and Change

Management

Terry Thomas

eInitiaitvives

September 2013

2 T. Thomas

July 2012

The Schlumberger Perspective & Promise

The Promise of eCommerce to Schlumberger clients,

partners, and employees is a set of business practices

that promote efficiency, mutual cost reduction, and

the highest quality services for all parties - customers,

trading partners, and Schlumberger. This promise is best

realized when based upon mutually accepted industry

standards and processes, security, confidentiality,

data integrity, and ownership.

3 T. Thomas

May 2013 For Better Informed Decisions

MEA – MIDDLE EAST &

ASIA

Eke Ugbaga Eke

Improving Business Efficiencies Through Best Practices in eCommerce

For Better Informed Decisions 4 T. Thomas

Sept. 11

Technical and commercial paperwork

always present in Global Oilfield Operations

5 T. Thomas

July 2012 For Better Informed Decisions

Benefits from Electronic Commercial Transactions

versus Paper

―Oil Company Buyers

―Reduced duplicate paperwork

―Speed of payment and transparency ― Suppliers, Partners, etc.

―Reduced AP (Accounts Payable) effort and costs

―Operations Benefits ― Engineers drilling wells, not shuffling paper

―Product and Service Company Suppliers

―Reduced duplicate paperwork

―Reduced AR (Accounts Receivables) and collections costs

―Speed of payment

― Reduced DSO (Days Sales Outstanding)


Sept. 11

Learning and doing

Guiding Principles

Focus on business-oriented objectives

Enlist the most qualified people to lead and participate in our organization

Act as an inclusive Global Standards Forum

Broadly and frequently communicate with our industry

Leverage the work of others where possible

Recruit and maintain a diverse membership

Make standards available on an open and royalty free basis

PIDX provides a global forum for delivering the

process, information and technology standards that

facilitates seamless, efficient electronic business

within the Oil and Natural Gas industry and its trading

community.

7 T. Thomas

July 2012 1/25/2008 1

2001- API/PIDX Industry Lead Standards Initiative

8 T. Thomas

July 2012

A group of diverse suppliers working together with a non-profit objective to provide standardized electronic information to B2B trading partners

• Reduce costs of eCommerce

• Facilitate eCommerce in upstream oil and gas for both products and services

• Protect electronic data confidentiality and ownership

• Improve efficiency and maximize benefits from eCommerce

• Provide leadership to increase eCommerce functionality

Formed in 2000

http://www.bakerhughes.com/

http://www.coopercameron.com/

http://www.halliburton.com/

http://www.schlumberger.com/

http://www.trican.ca/

http://www.weatherford.com/

9 T. Thomas

July 2012

eCommerce – Trading Partner Agreements

1. Anadarko Petroleum

2. Anderson Energy

3. Antero Resources

4. Apache

5. Approach Resources

6. ARC Resources

7. Atinum E&P

8. Bahrain Petroleum

9. Barrick Energy

10. BHP Billiton

11. Bill Barrett Corp

12. Black Hills Exploration

13. Bonavista Petroleum

14. BP

15. Cairn India

16. Canadian Natural (CNR)

17. Carrizo Oil & Gas

18. Cenovus Energy

19. Chesapeake Energy

20. Chevron

21. Chief Oil & Gas

22. COG Operating

23. Common Resources

24. Compton Petroleum

25. ConocoPhillips

26. Continental Resources

27. Crimson Exploration

28. DCP Midstream

29. Denbury Resources

30. Devon Energy

31. Diamondback Energy

32. Eagle Rock

33. Encana

34. Energen

35. Energy XXI

36. Enerplus Resources

37. Enervest

38. Eni

39. EOG Resources

40. EP Energy E&P

41. Exco Resources

42. Fairways Offshore

43. Fidelity Exploration &

Production

44. Forest Oil

45. Gastar Exploration

46. Geosouthern Energy

47. Great Western Oil & Gas

48. Harvest Operations

49. Hess

50. Hilcorp Energy

51. Hunt Consolidated

52. Huntington Energy

53. Husky Energy

54. Indigo Minerals

55. Inflection Energy

56. Jetta Operating

57. Legacy Reserves

58. Legado Resources

59. Long Run Exploration

60. MacPherson Energy

61. Marathon

62. McMoRan Exploration

63. Mewbourne Oil

64. Murphy E&P

65. NAL Resources

66. Nearburg Producing

67. Newfield Exploration

68. Nexen

69. Noble Energy

70. Northern Blizzard

71. Oasis Petroleum

72. Oxy

73. Pacesetter Directional

Drilling Energy

74. Pengrowth

75. Penn Virginia

76. Perpetual Energy

77. Petrobank

78. Petrobras

79. Petro-Hunt

80. PetroQuest Energy

81. Peyto Exploration

82. Pinecrest Energy

83. Pioneer Natural

84. Plains Exploration

85. PostRock Energy

86. QEP Resources

87. Quantum Resources

88. Quicksilver Resources

89. Repsol

90. Resolute Natural Resources

91. Rosetta Resources

92. Samson

93. Sandridge Energy

94. Shell

95. Sinopec Daylight Energy

96. SM Energy

97. Southwestern Energy

98. Statoil

99. Sure Energy

100.Surge Energy

101.Swift Energy

102.Talisman Energy

103.TAQA North

104.Tecpetrol (US)

105.Total

106.Trilogy Energy

107.Tug Hill Operating

108.Tundra Oil & Gas

109.Ultra Resources

110.Urban Oil & Gas

111.Ute Energy

112.Vanguard Natural

Resources

113.Vantage Energy

114.Venoco

115.Whiting Petroleum

116.Wildhorse Resources

117.Windsor Permian

118.WPX Energy

119.XTO Energy

120.Yates Petroleum

Data Ownership, Usage, Confidentiality, Fees, Indemnification, Intellectual Property rights, Industry Standards, Third-

Party responsibility…

10 T. Thomas

July 2012

eCommerce Third-Party Agreements

1. 8over8 Ltd.

2. ADP

3. Alto Exchange

4. Amalto

5. Ariba

6. Basware

7. Biznet Solutions

8. Cortex Business

9. Coupa Software

10. Emptoris

11. EntComm

12. Futura Solutions

13. Grupo Advantage

14. Hubwoo

15. Iasta

16. Ketera

9. Pervasive

10. Petronect

11. Procuri

12. Quadrem (Ariba)

13. Tradeshift

14. TransZap (Oildex)

15. Verian Technologies

Acceptable Terms and conditions regarding eCommerce: Data Ownership, Usage, Confidentiality, Fees, Indemnification, Intellectual

Property rights, Industry Standards …

11 T. Thomas


Facsimile

Transaction Process Evolution

Supplier Customer

Postal

The “e-Envelope”

Internet

12 T. Thomas

July 2012

Industry

Standards

The “e-Envelope”

System-to-System Integration

Middle

Ware

ERP

System ERP

System Middle

Ware

Buyer Supplier

Middleware • Business Rules

• Routing

• Messaging / Acknowledgements

• Automated, not Manual, Browser-based?

Internet

13 T. Thomas



ASIA

Eke Ugbaga Eke

Global eCommerce Change

Management

Business Process

• Proforma Invoice processes

• Fiscal Tax requirements

• Dual/Split Currencies

• Rounding Differences

• Major Resource Holder (NOC) requirements

• Cost Recovery - Joint Ventures

• Paper based - Original Document requirements

• Local Content

Business Landscape

• Major Resource Holders (MRH)

• National Oil Companies (NOC)

• Majors and Large Independent Oil & Gas

• Joint Ventures

14 T. Thomas


Fiscal Tax Requirements

Kazakhstan Tax Invoice

Israel Tax Invoice

Mexico SAT CFDI Tax

Invoice

• Original Document requirements

• Tax Law compliance

• Signatures Physical / Electronic

• Exact matching & Rounding Differences

• Local currency and language

• Consolidation

• Date timing

15 T. Thomas

July 2012

Sales & Billing System ERP

PIDX XML

PIDX

Su

pp

lier

Op

erat

or

Verbal

(or limit)

Order

Perform

Work Signed,

Scanned

FT(s)

Create SES

from Invoice

Cost

Assignment

Review/Appro

ve

PIDX

eInvoice

Create PO

from Invoice

Post Invoice

to GL

Process

Response

Message

Tax

Verification

Gov’t

Tax Doc

Documents

PDF

Attachment

or Original

Physical

PIDX Process + Fiscal Tax Requirement

16 T. Thomas



ASIA

Eke Ugbaga Eke

Global eCommerce Change

Management

Manual Web Invoicing (Manual Invoice entry)

WebsiteSAP/Lawson

WRS/FTL

eZView

ComCat

Approval

WRS

OFS Invoicer

eZViewAccounting

Accounts PayableERP

Approval

Filing

Receiving

Routing

Coding

Invoice

Package

CustomerSchlumberger

Avoids

eProcurment systems

• One size fits all procurement processes

• Proprietary Web Portals

• SAP Supplier Users Service (SUS) Portal

• Ariba Suppliers Network (ASN)

• Quadrem Supply Center

• PDF Imaging and eMail invoicing

17 T. Thomas

May 2013

Portal Based

Approach

Late Revenue Recognition

Late Visibility for Job/Tendering

Manual Tracking on Commitment

No visibility on transaction

Manual Tracking

No End-to-End KPI

Dependent on Individuals

Inconsistent data

Dependent on Individuals

Extensive Manual validation

Time consuming

Costly

Error prone

Disagreement on Charge

Long cycle time

Suppliers Dissatisfaction

Not maximizing contractual

benefits

Fully Integrated

Solution enabled by

PIDX

Real-time Spend Management

Electronic Tracking of commitment

Less Invoice Rejection

Reduced Audit cost

Automatic transaction

Timeless

Effortless

Traceable

Reusable

Reduced execution cost

Electronic Envelop

Reduced invoice disputes

Automatic validation

Better cash management

Compliance to Payment Term

Optimized Operation Activity

• Real-time Spend Management

• Reduce Cycle time

• Security/ Encryption

• Electronic Envelop

• Transaction Integrity

• Global Industry Solution

• Scalable Process

• Reactive Approach

• Late Visibility

• Inconsistent data

• Time Consuming Manual

Processing

• Error Prone

• Proprietary Solution

Job Planning & Contracts Compliance

Billing Execution & Invoice Capture

Validations & Approvals

Payment Term & Working Capital





Challenges to Efficient Invoicing Process

18 T. Thomas

May 2013





28 73

38%

0%

0

20

40

60

80

PIDX Portal

45 days in average decrease in cost capturing

38 % Time Improvement in early visibility on spend

50% Improvement on contract compliance

25% Decrease on in returned invoices

Fully integrated system to system solution enables

faster invoicing

=> Near real-time spend Management

Integrated solution enforces

Contract Compliance

Days

10 9 7

5

8 7 9

6

-

5

10

15

20 Returned

Invoices

Deferred

Revenue

$(M)


19 T. Thomas

May 2013

Execution & Invoice Capture





For 1000 invoices per month

Average 15K to 20K Lines per

Month

= 70 man days to submit the data

Error prone

Time consuming

Inconsistent data

Not scalable

Paper Invoice Typing

Portal

Portal Based

Approach

Data sent through fully integrated system to

system solution in a secured way

=> 96% Successful invoice processing

80% Improvement on submission time

100% Increased security

=> Data Integrity

=> Monitoring & improvement

* Based on invoicing of typical MRH- 14 days / 5 people/ 20 min per invoice

Fully Integrated

Solution enabled

by PIDX

20 T. Thomas

May 2013






97

21 46

10 10

41

9

7

21

6 6

28

-91%

-67%

-54%

-40% -40%

-32%

-20

0

20

40

60

80

100

120

Certifier-1 Certifier-2 Verifier Reviewer Approver Total Processtime

Portal PIDX

Electronic pre-verification based on agreed

business rules

=>32% Improvement in process time

38% Reduction full payment cycle

24% Improvement of exceptions handling

Days

96% Touch less invoice processing

100% Pricing accuracy

100% Avoidance of duplication

100% Contract/Invoice Matching

=>Fully integrated transaction pre-validation

Alert sent to supplier preventing invoice with

error to be sent

21 T. Thomas

May 2013






93% Reduction in unbilled work by 1 year

=

93% Earlier visibility on buyer side on spend

Optimized cash flow management

Compliance to payment term

129

70

37 31 33

9

0

50

100

150

Q3 -Y0 Q4-Y0 Q1-Y1 Q2-Y1 Q3-Y1 Q4-Y1

Unbilled $M

M$

Fully Integrated

Solution enabled

by PIDX

=>From immobilized cash

To near real-time visibility to optimize operation activity

Fully Integrated

Solution enabled

by PIDX

22 T. Thomas

May 2013

Near real-time Visibility on spend & Optimized Working capital

Security/Encryption B2B fully integrated transactions

Transaction & Data Integrity ensured from delivery through protocol & secured channels

Catalog/Invoice Compliance Insured by System & System Integration

Reduced cycle time & Optimized cash flow management

Repeatable & Auditable processes

Electronic Verification

Global Industry Standard Solution Expand foot print across suppliers

Cost savings

Electronic Envelop - supporting documentation

PIDX Integration: 10 Overall

competitive advantages

23 T. Thomas


Ideal End-to-End Process

Requisition

• Identification of Need

• Specification of Job Parameters (as known)

• Budget Assignment

Purchase Order

• Financial Authority (Commitment)

• Identify Appropriate Source-of-Supply

• Supplier Commitment

Receipt

• Verification of Receipt of Services & Materials

• Quantities Only

Invoice

• Verification of Rates

• Financial Authority (Payment)

24 T. Thomas

July 2012

Sales & Billing ERP

Su

pp

lier

Op

erat

or

Case Study #1 – eInvoice Processing

Verbal

(or limit)

Order

Perform

Work Signed,

Scanned FT(s)

Cost

Assignment

Review of

Invoice &

Match to FT

Post to GL

Most prevalent model in the Upstream Oil & Gas industry

Used by dozens of operating companies, dating back to 2002

Review/approval workflow can be done in ERP or in any external

workflow application (although most use external)

Can be done as ‘2-way match’

Very low risk, fast ‘time to market’

PIDX

eInvoice

25 T. Thomas

July 2012

Sales & Billing System ERP

PIDX XML

PIDX

Su

pp

lier

Op

erat

or

Case Study #2 – PO ‘Backflush’

Verbal

(or limit)

Order

Perform

Work Signed,

Scanned

FT(s)

Create SES

from Invoice

Cost

Assignment

Review/Appro

ve

•Used by SAP shops who wish to have ‘clean’ 3 way match with

minimum of manual data entry work

•More complex workflows & technology, manageable given previous

experience

PIDX

eInvoice

Create PO

from Invoice

Post Invoice

to GL

26 T. Thomas

July 2012

Su

pp

lier

Op

erat

or

Case Study #3 – Imaging/Indexing

Verbal

(or limit)

Order

Perform

Work Signed,

Scanned

FT(s)

Translate

XML Inv to

PDF

Manually

enter SES

Cost

Assignment

•Realizes benefits of automation, processing efficiency, and payment

performance

•Does not realize benefits of line-level visibility and spend analytics

PIDX

eInvoice

Review/Appro

ve

Manually

enter 1-line

invoice

27 T. Thomas

July 2012

Su

pp

lier

Op

erat

or

Case Study #4 – FT/Proforma Inv

Verbal

(or limit)

Order

Perform

Work Signed,

Scanned

FT(s)

Auto Create

SES

Cost

Assignment

•Most technically complex solution

•Requires bi-directional system-to-system choreography of messages

PIDX FT /

Proforma

Review/Appro

ve

Review/Appro

ve

Process

Response

Message

PIDX eInvoice

Post to GL

Process

Response

Message

28 T. Thomas


Factors to Consider

Purchase Order

• Verbal order?

• Limit order?

• Backflush detailed order?

Receipt

• Verification of Receipt based on scanned FTs?

• Backflush SES creation after receipt of invoice?

• Manual SES creation?

• Proforma Invoice?

• PIDX FT?

• Not required? (2-way match)

Invoice

• Multi line?

• 1 line?

• Image?

•Several variations on each process step can be combined

interchangeably to create even more process variations

29 T. Thomas


Realized Mutual Benefits

― Oil Company Customers ―Speed of payment and transparency

» Improved AP efficiency

―Contract compliance and managing commitments » More automated rate validation

―More timely tracking of costs versus AFEs

―Spend analysis » Auto coding of costs to GL accounts

―Drilling Engineers - drilling wells, not chasing paper

― Product and Service Company Suppliers (DSO) ―Improved liquidity from reduced DSO (Days Sales Outstanding)

» Customers’ payments closer to Contract Terms

―Improved AR efficiency and reduced AR costs

―Reduced duplication and administration costs

30 T. Thomas

July 2012 For Better Informed Decisions MEA – MIDDLE EAST &

ASIA

Eke Ugbaga Eke

Schlumberger Ongoing Integrations

Schlumberger Worldwide PIDX XML eInvoicing


Sept. 11

34 254 318

779

1,591

3,046 2,921

4,210

5,530

6,200

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Schlumberger Worldwide PIDX Invoice Transactions

32 T. Thomas

July 2012

Thank you

PIDX Global eCommerce Deployment and Change Management … · PIDX Global eCommerce Deployment and...

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