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Looking to upgrade your company’s Oil and Gas ERP? 4 Critical Factors to Consider

Looking to upgrade your company’s Oil and Gas ERP? 4 Critical Factors to Consider

The oil and gas industry certainly did not expect 2022 would bring more supply chain disruptions thanks to the war in Ukraine. Unstable market conditions caused by Covid-19 have only intensified this year. The industry is also facing other huge challenges, including public pressure to find new emission-reduction methods to help offset the effects of climate change. And, there’s always the constant need to protect plants from unanticipated shutdowns.

If you’re facing these issues with a legacy ERP, your company may be ill-equipped to meet these challenges. Modern enterprise software for the oil and gas industry is designed to help companies deal with supply chain disruptions. It’s also designed to help managers gain greater visibility into operations and make smart, data-driven decisions so that companies can work efficiently and cost-effectively despite formidable market challenges.

Oil and gas companies have very different business needs. Companies focusing on exploration and extraction need help with expediting reports, analyzing data, and managing permits. Petroleum and biofuel producers need detailed timely reporting and quality control. Distributors and retail outlets need real-time tracking, sales reporting, and efficient regulatory compliance for storing and dispensing fuel.  

Whether your business falls into the Upstream, Mid-Stream, or Downstream leg of the industry,  a modern ERP for the oil and gas industry can help Improve efficiency on and offshore and help make complex operations cost-effective.

All ERPs automate common processes and eliminate workflow bottlenecks by uniting formerly siloed workers on one platform and providing authorized-only access to accounts, schedules, financial statements, permits, and other essential documents.  Most modern ERPs provide some kind of platform designed to ease and automate daily work processes. Added functionality supports customer and supplier relationship management, human resource management, and mobile workers.

Evaluating Oil and Gas ERPs

Business software for the oil and gas industry offers all of these features but adds specific functionality designed to support the industry’s unique needs. The whole industry cycle: from exploration, extraction, production, distribution, or retail sales can experience cost reductions by utilizing an efficient, modern, end-to-end oil and gas ERP.  With an industry-specific platform, efficiency and visualization improve, and costs and risks are minimized. This is achieved by integrating data and streamlining processes in four key areas: Financial Management, Supply Chain Management, Asset Management, and Risk Management.

Key management categories

There are many Oil and Gas ERPs on the market today. If you are looking to upgrade, look at how well each ERP system handles processes in these four management categories: Financial, Supply Chain, Asset, and Risk Management. The best ERP systems on the market today incorporate BI and automation tools to improve efficiency and streamline operations in each of these four crucial areas.

Financial Management: To increase efficiency while controlling costs, today’s next-gen ERPs provide managers with in-depth views of all phases of operation.  With up-to-the-minute knowledge of expenditures and transactions and real-time insight into supply chain data and plant operations, managers can make informed decisions and effectively manage multiple locations simultaneously. Relying on integrated real-time data makes material management/logistics, maintenance planning, and resource allocation a lot easier. Managers can make cost-effective decisions by having timely access to integrated data.

Supply Chain Management: Most ERPs on the market today have supply chains modules that can be incorporated into an Oil and Gas ERP. These modules link suppliers with oil and gas industry managers and allow them to collaborate from locations all around the world. With immediate access to supply chain data, companies can prepare emergency plans when delays or accidents occur.  

Asset Management: A robust oil and gas ERP can unite offshore and onshore operations. As products move from wells to refineries to consumers, the best oil and gas enterprise software helps companies adhere to regulations in every state and country along the way by automating reporting and regulation requirements.  

Risk Management: Oil and gas companies make huge capital investments, to explore new product sources. The exploratory research or the extraction process is often done in unfavorable environments. Once the product is extracted from the ground, companies face multiple regulations, compliances, currency risks, commodity pricing, and other challenges. Efficient ERP solutions help monitor risks at each stage of the process and ease the complexity of adhering to all the regulations along the way. Automated processes help ensure that taxes and fees in each region are promptly paid so that no fines are assessed.

Since the oil and gas industry utilizes land and water resources, it’s subject to environmental standards, Complex environmental and compliance regulations can be automated and simplified by a modern ERP.

Aging or failing oil and gas ERPs are also more apt to be at risk from cyber-attacks which could halt production entirely. When you evaluate oil and gas industry ERPs, consider how each manages these many forms of risk.

Choose an Oil and Gas ERP that’s Flexible

There are many reasons why a company decides its time to replace a legacy ERP. Whatever is your current need, in an industry that is facing an unpredictable future, you’d be wise to choose a next-generation ERP system that is flexible and scalable.

The concern over climate change and the shrinking availability of fossil fuels has led many major oil and gas companies to begin to explore biofuels to help to lower greenhouse gas emissions from cars and heavy trucking. They are also exploring ways to address climate change by carbon capture and storage methodologies that can remove more than 90% of industrial CO2 emissions. Many are also working to create high-performance lubricants that improve fuel efficiency and lower greenhouse gas emissions. Others are working to improve technologies that monitor natural gas sites for potentially deadly methane leaks. As these new technologies and methodologies are developed and adopted, they will bring a need for new workflows.

Companies will have to reformulate their production, extraction, and distribution methods to accommodate new products and new regulations. You’d be wise to plan for the future now by choosing an oil and gas ERP that’s flexible and can scale as the industry changes.

How an IFS ERP handles the complexity of the Oil and Gas Industry

With 30 years of experience in enterprise business software development, IFS has built its view of what an oil and gas ERP software should look like. It offers a single integrated platform with 100+ business components. Companies can implement the components that it requires and add others as needed. The rich functionality and flexibility of IFS applications have a strong presence on all continents, with a client base of more than 2,000 companies.  

Market-leading IFS ERP solutions are designed to handle the complex needs of the oil and gas industry. Real-time monitoring and tracking of supply chains, operations, and distribution are all available on its unified platform. An IFS oil and gas ERP comes loaded with in-depth analytics and other easy-to-use planning tools to help company leaders strategize, cut costs and maximize productivity. And, all this comes packaged with a user-friendly interface.

Let’s look at how an IFS oil and gas ERP handles these four critical industry areas: Financial, Supply Chain, Asset, and Risk Management.

1. Financial Management

IFS solutions streamline operations and enable accurate and timely accounting information for reporting and decision making. Multi-language, multi-currency, and multi-jurisdiction are enabled by IFS’ global support package. This information stays current thanks to its built-in evergreen update capability.

Companies implementing IFS solutions have experienced:

  • 10 % reduction in management cost through labor force control and improving operational efficiencies
  • 33 % reduction in inventory cost through improved demand estimates
  • 15 % reduction in maintenance and repair

2. Supply Chain Management

IFS supply chain solutions give managers a unified, real-time view of business data.  All stages of the supply chain can be monitored. An IFS ERP can track site to site, site to the customer, and supplier to site details. Order acceptance procedures are linked to supply site availability with automated rule-based sourcing, with ATP (Available to Promise) and CTP (Capable to Promise) capabilities built-in.

Obtaining permits for land exploration and oil and gas extraction is incredibly complex, IFS solutions help expedite the process so that new source materials can be quickly worked into the supply chain

3. Asset Management

IFS’ enterprise asset management (EAM) software simplifies project management. Authorized users have immediate access to asset-impacting details such as well log analysis, seismic processing, gravity/magnetics, mapping, statistics/data analysis, and reservoir/geological modeling. With such access to data, wiser material management and scheduling are possible.

Oil and gas production reporting is shared on an integrated platform that gives authorized managers immediate access to data. With real-time well production data and other crucial monitoring reports, asset management improves, saving organizations time and money.

4. Risk Management

  • IFS software comes ready-made with built-in analytics, and a customizable dashboard. Hazardous materials tracking is simplified. Access to data is permission-based and can be integrated with Microsoft Suite and Microsoft BI if needed.
  • Important permits, lease information, and other essential documents can be accessed as needed by authorized personnel. Automated prompts warn when payments are due, when permits expire and when safety inspections are needed.
  • IFS software can reduce the complexity of compliance reports required by state, federal, and international organizations. Reports required by the EPA, or the Bureau of Land Management Oil and Gas inspection and enforcement can be effectively produced and sent, to help companies avoid penalties fees for missed deadlines.
  • Performing regular maintenance is a big priority for rig operators. IFS simplifies daily planning, helping companies reduce risk and maximize cost savings through efficient calendar and scheduling management.
  • IFS Applications ensure that all critical assets are continuously monitored. Automated alerts allow managers to schedule service as needed to help prevent malfunctions or costly downtime. For example, with an IFS solution, managers can be alerted when a well report run during the extraction and refinement process indicates problems. Managers can immediately send work orders to technicians to fix the issue before it becomes a major one. Work orders can be sent via a mobile app and recorded on calendars so that information is dispatched quickly and shared with all essential staff.

IFS solutions simplify work processes, support efficient scheduling, and production management, and provide information backup and storage. And, IFS systems are scalable.

An Oil Rig IFS Success Story

When the need for a real-time, comprehensive overview of the workings of an oil rig became apparent, one company knew it needed to upgrade its oil and gas ERP. After a thorough review of all the products on the market, the company chose to implement an IFS solution. IFS robust, industry-specific functionality could be quickly implemented to solve the company’s pressing needs. IFS’ sophisticated enterprise asset management (EAM), linked its onshore and offshore teams and streamlined its supply chain management, financials, and document management processes.

This kind of industry-specific functionality was possible because IFS has designed its ERP solutions to allow for ease in the production and distribution of operation reports, meter readings, well status, and more on a platform that gives companies room to grow.

Choose a future-ready oil & gas ERP and a partner that has the expertise to help you realize your goals.

As uncertain market conditions linger, threats and new technologies will certainly continue to impact the oil and gas industry. if you’re ready to move to a modern ERP that will better prepare your company for the challenges ahead, make sure you choose one that’s future-ready with room to grow.

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