American Oil and Gas Reporter - January 2021 - 94

Tech Trends 2021
ed and complicated that it takes a couple
of years to deploy;
· The business model weighs down
energy companies with massive costs
that hold back the organization, no matter
how much it optimizes cash flow or business processes; and
· A disruptive user experience forces
energy professionals to rethink the way
they work.
Given the rigidity of traditional ERP
systems, imagine what it takes to make
changes as business needs evolve, or tax
and regulatory reporting requirements
change. That is why so many users resort
to working outside the system and rely
on spreadsheets to get their jobs done.
And on the last point, it is generally
agreed that organizational change management is one of the top reasons such
ERP projects fail to deliver value on time
and on budget.
Today's energy businesses, propelled
by rapidly shifting economics and new
operational challenges, cannot afford to
be handcuffed to bloated technology that
cannot keep pace. And it cannot be underscored enough that a client-centric,
technology partnership is just as key to
delivering business value as an ERP's
features and functionality.
Moreover, oil and gas companies do
not want to be caught in the dilemma
where they face stranded costs and an ur-

gency to undertake expensive upgrades to
implement traditional ERP processes to
the cloud. This represents a carrot at the
end of a stick tempting energy companies
with better business agility and cost efficiency, but doing so by adding yet another
investment link in the chain that binds
them to their existing platforms.
Wouldn't it be much more ideal if the
ERP platform itself was engineered specifically for oil and gas business workflows
with cloud-based functionality at its very
core? Wouldn't it be even better if such a
platform could be optimized and customized
in the most timely and cost-efficient manner
possible based directly on individual oil
and gas company requirements and realworld experiences? Of course, that is precisely the premise behind a new breed of
industry-centric, fit-for-size ERP technology
for upstream and midstream operations
(Figure 1).
Purpose-Designed Solution
The new generation of ERP technology
cannot come at a better time for producing
companies. As the past year has demonstrated all too well, cost efficiency is a
business driver in upstream and midstream
operations just as much as speed to market
and flexibility, but perhaps driving costs
out of the organization is a function of
its agility and ability to rapidly meet
evolving business conditions head on.

ERP technology is especially needed
now as the industry shifts increasingly
toward a business model that is akin to
manufacturing, which may offer slimmer
margins in exchange for greater sustainability and reduced business impacts from
boom-and-bust cycles. To do that, the industry needs to automate manual processes
across the value chain while embracing
good manufacturing practices, where lifting
costs no longer dictate whether a basin is
economic one day and not the next.
One thing users have learned from
traditional ERP software is the value in
centrally managing workflows. This can
only be further improved in the cloud.
What does that look like for upstream
companies? Deploying advanced analytics
to optimize field operations on the cloud
alongside related workflows enables production operations and accounting teams
to simplify asset management, allocation,
sales reconciliation and reporting while
closing the month faster than ever.
The benefits extend to revenue accounting as well. By integrating production and
revenue accounting into the same cloudbased solution that shares a common and
consistent dataset, division orders and payments to interest owners can be rapidly
processed. And by tracking the movement
of crude, gas and natural gas liquids volumes and sales through a single platform,
operators gain powerful capabilities to

FIGURE 1
Unified Oil and Gas SaaS ERP Platform Spanning Upstream and Midstream Operations

Energy Value Chain

Wellhead

Compressor Station

Plant

Intrastate Pipeline

Chemical Plant

Transportation

Water
Disposal

Terminal

Transportation

Refinery

SaaS ERP Software
Capabilities

Crude

Natural Gas

Water

NGLs

UPSTREAM ERP
SUITE:

Lease Admin/GIS
Division Order
AFE

Joint interest Billing
FDC/Prod. Accounting
Marketing

Revenue Accounting
Tax & Regulatory
Fixed Assets/DD&A

Purchasing
Materials Inventory
Financial Accounting

Measurement
Produced
Saltwater Disposal

MIDSTREAM ERP
SUITE:

Field Data Capture
Volume Balancing
Accrual
Terminal Mgt. & Schedule

Gas & Crude Gathering
Plant Accounting
Liquids Transportation
Crude First Purchaser

Contract Management
Marketing
Tax & Regulatory
Right of Way

Division Order
AFE
Forecasting
Financial Accounting

Measurement
Produced
Saltwater
Transportation

Liquids Transportation
Terminal Management

Tank Gauging
Measurement

Physical Trading
Financial Trading

Confirmations
Scheduling

Actualization
Accruals

Invoicing
Risk Management

Credit
Inventory
Accounting

TRANSPORTATION &
TERMINAL MGT.:
COMMODITY
MANAGEMENT:

DASHBOARD & REPORTS

94 THE AMERICAN OIL & GAS REPORTER
American Oil and Gas Reporter - January 2021

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