1 T. ThomasOct 2013
Mkt & Sales and BI
Process & Business Systems
Nabil MazzawiMay ‘08
eCommerceBuyer – Supplier Integration
Terry Thomas - eInitiativesMarch 2014
2 T. ThomasOct 2013
The Schlumberger Perspective & PromiseThe 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.
4 T. ThomasOct 2013
Supply Chain/Finance Efficiency
Buyer
Supplier
Purchase Order
Quote Acknowledgement
Reception
Invoice
Payment
Job report
Selection
Selection & Design
CollaborationRFQ
•Sourcing•PO Population
(price per contract)•Fullfillment
•Content•Transactions
5 T. ThomasOct 2013 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)
6 T. ThomasOct 2013 For Better Informed Decisions
eCommerce Vision Reduce transaction costs for both buyer and supplier
―Improved accounts payable and operational efficiencies―Reduced cycle times
Achieving the vision ―Implement and sustain standard Internet-enabled, procurement-
through-payment processes―Mutually beneficial electronic commerce process based on industry
standards―Utilize industry organizations, oil & gas operators and suppliers to
successfully create win-win eProcurement solutions
―Keeping business objectives as a clear foundation
For Better Informed Decisions7 T. ThomasOct 2013
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.
The place to go for oil and gas e-business standards
9 T. ThomasOct 2013
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
10 T. ThomasOct 2013
eCommerce – Trading Partner Agreements
1. Anadarko Petroleum2. Anderson Energy3. Antero Resources4. Apache5. ARC Resources6. Atinum E&P7. Bahrain Petroleum8. Baytex Energy9. BHP Billiton10. Bill Barrett Corp11. Black Hills Exploration12. Bonanza Creek Energy13. Bonavista Petroleum14. BP15. Cabot Oil & Gas16. Cairn India17. Canadian Natural (CNR)18. Cantera Energy19. Carrizo Oil & Gas20. Cenovus Energy21. Chesapeake Energy22. Chevron23. Chief Oil & Gas24. COG Operating25. Common Resources26. Compton Petroleum27. ConocoPhillips28. Consol Energy29. Contango Oil & Gas30. Continental Resources
31. Corex Resources32. Crescent Point Energy33. Crew Energy34. DCP Midstream35. Denbury Resources36. Devon Energy37. Diamondback Energy38. E&B Natural Resources39. Eagle Rock40. Emerald Oil41. Encana42. Energen43. Energy XXI44. Enerplus Resources45. Enervest46. Eni47. EOG Resources48. EP Energy E&P49. Exco Resources50. Fairways Offshore51. Fidelity Exploration & Production52. Fieldwood Energy53. FIML Natural Resources54. Forest Oil55. Gastar Exploration56. Geosouthern Energy57. Gear Energy58. Great Western Oil & Gas59. Harvest Operations60. Hess
61. Highmount E&P62. Hilcorp Energy63. Hunt Consolidated64. Huntington Energy65. Husky Energy66. Indigo Minerals67. Inflection Energy68. Jetta Operating69. Jones Energy70. Laredo Petroleum71. Legacy Reserves72. Legado Resources73. Linn Operating74. Long Run Exploration75. MacPherson Energy76. Marathon77. Matador Production78. McMoRan Exploration79. Mewbourne Oil80. Murphy E&P81. NAL Resources82. Nearburg Producing83. Newfield Exploration84. Nexen85. Noble Energy86. Northern Blizzard87. Northstar Offshore88. Oasis Petroleum89. Oxy90. Pacesetter Directional Drilling Energy
91. Parsley Energy92. PDC Energy93. Pengrowth94. Penn Virginia95. Perpetual Energy96. Petrobank97. Petrobras98. Petro-Hunt99. PetroQuest Energy100. Peyto Exploration101. Pinecrest Energy102. Pioneer Natural103. Post Rock Energy104. Progress Energy105. QEP Resources106. Quantum Resources107. Quicksilver Resources108. Repsol109. Resolute Natural Resources110. Rex Energy111. Rife Resources112. Rock Energy113. Rosetta Resources114. Samson115. Sandridge Energy116. Shell117. Sheridan Production118. Sinopec Daylight Energy119. SM Energy120. Southwestern Energy
121. Statoil122. Sure Energy123. Surge Energy124. Swift Energy125. Talisman Energy126. Tamarack Valley Energy127. TAQA North128. Tecpetrol (US)129. Teine Energy130. Total131. Trilogy Energy132. Tug Hill Operating133. Tundra Oil & Gas134. Twin Butte Energy135. Ultra Resources136. Urban Oil & Gas137. Vanguard Natural Resources138. Vantage Energy139. Venoco140. Vermilion Energy141. Whiting Petroleum142. Wildhorse Resources143. Windsor Energy144. WPX Energy145. XTO Energy146. Yates Petroleum
Data Ownership, Usage, Confidentiality, Fees, Indemnification, Intellectual Property rights, Industry Standards, Third-Party responsibility…
11 T. ThomasOct 2013
eCommerce Third-Party Agreements
1. 8over8 Ltd.2. Actian (formerly Pervasive )3. ADP4. Alto Exchange5. Amalto6. Ariba7. Basware8. Biznet Solutions
9. Cortex Business10. Coupa Software11. Emptoris12. EntComm13. Futura Solutions14. Grupo Advantage15. Hubwoo16. Iasta
17. Ketera18. Oildex19. Petronect20. Procuri21. Quadrem (Ariba)22. Tradeshift23. Verian Technologies
Acceptable Terms and conditions regarding eCommerce:Data Ownership, Usage, Confidentiality, Fees, Indemnification, Intellectual Property rights, Industry Standards …
12 T. ThomasOct 2013 For Better Informed Decisions
Facsimile
Transaction Process EvolutionSupplierCustomer
Postal
The “e-Envelope”
Internet
13 T. ThomasOct 2013
IndustryStandards
The “e-Envelope”
System-to-System Integration
MiddleWare
ERPSystem
ERPSystem
MiddleWare
Buyer Supplier
Middleware• Business Rules• Routing• Messaging / Acknowledgements• Automated, not Manual, Browser-based?
Internet
14 T. ThomasOct 2013
Manual Paper
Invoice Package
Deliver Invoice Package
ApprovalField Ticket
PerformaInvoice
BusinessReporting
Paper Invoice
BusinessReporting
Accounts PayableAccounting
Approval
Filing
Receiving
Routing
Coding
CustomerSupplier
Advent of the ERP System
SAP/LawsonWRS/FTLeZViewComCat
ApprovalWRS
OFS InvoicereZView
AccountingAccounts Payable
ERPFiling
Receiving RoutingCoding
Invoice Package
Deliver Invoice Package
Paper Invoice
Approval
CustomerSchlumberger
Manual Web Invoicing (Manual Invoice entry)
WebsiteSAP/Lawson
WRS/FTLeZViewComCat
Approval
WRSOFS Invoicer
eZViewAccounting Accounts Payable
ERP
Approval
Filing
Receiving
Routing
Coding Invoice
Package
CustomerSchlumberger Avoids
PIDX XML
ERP
WRS/FTLeZViewComCat
ApprovalWRS
OFS InvoicereZView
Accounting
ERPAccounts Payable
eReceiving
RoutingCoding
Middleware
ApprovaleReceiving
RoutingCoding
Middleware
SupportingDocs
CustomerSchlumberger
The “e-Envelope”
15 T. ThomasOct 2013 For Better Informed Decisions
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)
16 T. ThomasOct 2013
Sales & Billing ERP
Supp
lier
Oper
ator
Case Study #1 – eInvoice Processing
Verbal (or limit) Order
Perform Work Signed,
Scanned FT(s)
Cost Assignment
Review of Invoice &
Match to FTPost 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 in SAP as ‘2-way match’ Very low risk, fast ‘time to market’
PIDX eInvoice
17 T. ThomasOct 2013
Sales & Billing System ERP
PIDX XML
PIDX
Supp
lier
Oper
ator
Case Study #2 – SAP ‘Backflush’
Verbal (or limit) Order
Perform Work
Signed, Scanned
FT(s)
Create SES from Invoice
Cost Assignment
Review/Approve
•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
18 T. ThomasOct 2013
Supp
lier
Oper
ator
Case Study #3 – Imaging/Indexing
Verbal(or limit) Order
Perform Work
Signed, Scanned
FT(s)
Translate XML Inv to
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/Approve
Manually enter 1-line
invoice
19 T. ThomasOct 2013
Supp
lier
Oper
ator
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/Approve
Review/Approve
Process ResponseMessage
PIDX eInvoice
Post to GL
Process ResponseMessage
20 T. ThomasOct 2013 For Better Informed Decisions
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
21 T. ThomasOct 2013
Portal Based Approach
Late Revenue RecognitionLate Visibility for Job/TenderingManual Tracking on CommitmentNo visibility on transaction
Manual Tracking No End-to-End KPIDependent on IndividualsInconsistent data
Dependent on IndividualsExtensive Manual validationTime consumingCostlyError prone
Disagreement on ChargeLong cycle timeSuppliers DissatisfactionNot maximizing contractual benefits
Fully Integrated Solution enabled by
PIDX
Real-time Spend ManagementElectronic Tracking of commitmentLess Invoice RejectionReduced Audit cost
Automatic transactionTimelessEffortlessTraceableReusable
Reduced execution costElectronic EnvelopReduced invoice disputesAutomatic validation
Better cash management Compliance to Payment TermOptimized 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
Job Planning & Contracts Compliance
Billing Execution & Invoice Capture
Validations & Approvals
Payment Term & Working Capital
Challenges to Efficient Invoicing Process
23 T. ThomasOct 2013
Execution & Invoice Capture Job Planning &
Contracts ComplianceBilling Execution &
Invoice CaptureValidations &
ApprovalsPayment Term & Working Capital
For 1000 invoices per monthAverage 15K to 20K Lines per Month
= 70 man days to submit the data
⇒ Error proneTime consuming Inconsistent dataNot scalable
Paper InvoiceTyping
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 time100% 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
27 T. ThomasOct 2013 For Better Informed Decisions
MEA – MIDDLE EAST & ASIA
Eke Ugbaga Eke
Schlumberger Ongoing Integrations
Schlumberger Worldwide PIDX XML eInvoicing
29 T. ThomasOct 2013 For Better Informed Decisions
eInvoicing increasingly a part of the business
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2006
/01
2006
/03
2006
/05
2006
/07
2006
/09
2006
/11
2007
/01
2007
/03
2007
/05
2007
/07
2007
/09
2007
/11
2008
/01
2008
/03
2008
/05
2008
/07
2008
/09
2008
/11
2009
/01
2009
/03
2009
/05
2009
/07
2009
/09
2009
/11
2010
/01
2010
/03
2010
/05
2010
/07
2010
/09
2010
/11
2011
/01
2011
/03
2011
/05
2011
/07
2011
/09
2011
/11
2012
/01
2012
/03
2012
/05
2012
/07
2012
/09
2012
/11
2013
/01
2013
/03
2013
/05
2013
/07
2013
/09
2013
/11
2014
/01
eInvoicing as a % of Revenue(Legacy Schlumberger)
% of Lawson Rev % of SAP Rev % of Total Rev
21% of WW eInvoicing8.5 Billion invoiced in 2013
DSO reduced average 15 days+Company A 30 days vs. 89 paperCompany B 30 days vs.53 paper
Mutual reduction in administrative costs
•Improved efficiencies
•removal of paper based tasks
For Better Informed Decisions30 T. ThomasOct 2013
Schlumberger Worldwide PIDX Invoice Transactions
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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