Mkt & Sales and BI Process & Business Systems - PIDX · Mkt & Sales and BI Process & Business Systems Nabil Mazzawi. May ‘08. eCommerce. ... ―Engineers drilling wells, ... Eni

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)


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

http://www.pidx.org/index.html

http://www.pidx.org/index.html

8 T. ThomasOct 2013 1/25/2008 1

2001- API/PIDX Industry Lead Standards Initiative

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

http://www.bakerhughes.com/

http://www.bakerhughes.com/

http://www.coopercameron.com/

http://www.coopercameron.com/

http://www.halliburton.com/

http://www.halliburton.com/

http://www.schlumberger.com/

http://www.schlumberger.com/

http://www.trican.ca/

http://www.trican.ca/

http://www.weatherford.com/

http://www.weatherford.com/

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…


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 …


Facsimile

Transaction Process EvolutionSupplierCustomer

Postal

The “e-Envelope”

Internet


IndustryStandards


System-to-System Integration

MiddleWare

ERPSystem

ERPSystem

MiddleWare

Buyer Supplier

Middleware• Business Rules• Routing• Messaging / Acknowledgements• Automated, not Manual, Browser-based?

Internet


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



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)


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


Sales & Billing System ERP

PIDX XML

PIDX

Supp

lier

Oper

ator

Case Study #2 – SAP ‘Backflush’


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


Supp

lier

Oper

ator

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/Approve

Manually enter 1-line

invoice


Supp

lier

Oper

ator

Case Study #4 – FT/Proforma Inv


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


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


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



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




MEA – MIDDLE EAST & ASIA

Eke Ugbaga Eke

Schlumberger Ongoing Integrations

Schlumberger Worldwide PIDX XML eInvoicing


eInvoicing increasingly a part of the business

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2006

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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


Thank you

Documents

Mkt & Sales and BI Process & Business Systems - PIDX · Mkt & Sales and BI Process & Business Systems Nabil Mazzawi. May ‘08. eCommerce. ... ―Engineers drilling wells, ... Eni