Optimising Internal Processes: SAP solutions for oil and gas companies

SAP solutions for oil and gas companies

SAP stands for systems, applications and products in data processing. It is an enterprise resource planning (ERP) solution developed by Germany-based SAP AG. SAP’s ERP system enables companies to integrate their business processes such as accounting, sales, production, human resources (HR) and payment. The integration ensures that information flows from one SAP component to another, avoiding redundant data entries, and helps enforce financial, process and legal controls.

SAP solutions connect processes across industry value chains by integrating horizontal lines of business with industry-specific solutions on a variety of platforms such as cloud and mobile devices. The software has widespread application across industries such as healthcare, oil and gas, insurance, telecommunication and banking.

SAP for oil and gas

Oil and gas companies are facing an increasingly tough global market environment due to volatile crude oil prices, increase in energy consumption and compliance issues in addition to capital-intensive development projects and the need to secure internal processes. In order to be profitable in the long term, companies need to optimise their internal business processes, keep costs under control and leverage market opportunities quickly. To meet these requirements, SAP has developed SAP IS-OIL, an ERP solution for the oil and gas industry, featuring sector-specific tools and automated processes. Numerous processes in development, procurement, production, sales and services can be automated and centrally administered through this solution.

SAP solutions help asset-intensive companies manage large projects in their operations. With SAP solutions  for portfolio and project management, oil and gas companies can gain better insights into their investment and maintenance projects, ensure project budgets are on target, and improve the allocation of project resources. SAP solutions help these companies undertake collaborative project management and gain a competitive edge through integrated project planning and execution and real-time visibility throughout the project life cycle.

The key advantages of SAP for the oil and gas industry are:

  • Transparent processes and costs.
  • Comprehensive planning and administration of plant performance.
  • Targeted investments in plant development.
  • Increasing productivity with decreasing capital and extraction costs.
  • High quality mission-critical key performance indicators.
  • Secure investment.

SAP modules

Many SAP ERP modules have been designed over the past few years. These focus on different business processes such as sales and distribution, customer relationship management (CRM), financial management and business intelligence.

Key examples

Companies such as Indraprastha Gas Limited (IGL), Gas Authority of India Limited and Adani Gas have deployed SAP solutions. Based on the nature of the business, R/3, SAP IS-Utilities or SAP IS-OIL can be implemented.

In 2012, IT services company Fujitsu introduced a SAP Qualified Rapid Deployment Solution for the city gas distribution (CGD) segment in India. Fujitsu’s CGD ERP solution provides flexibility to its clients. It helps CGD companies to implement ERP solutions in a phased manner and spread the total investment over the period of implementation. Meanwhile, its preconfiguration features offer low cost of ownership.

IGL: During 2015-16, the company upgraded its SAP system from SAP R/3 to SAP ECC 6.0 EHP 7.0. It also implemented new modules to enhance customer satisfaction such as CRM, customer complaints handling, and customer connect through multiple channels such as mobile, email and web.

IGL continues to invest in IT solutions such as CRM, business communication management (BCM) and multichannel foundation for utilities (MCFU). These new IT applications are aimed at enhancing the customer experience. The company utilises BCM by SAP, which is an all-IP solution used for commodity networking equipment. The solution offers multiple channel support to users, including those using email, chat sessions, phones, faxes and mobiles. IGL also utilises SAP’s MCFU, which is a customer-facing solution based on the SAP NetWeaver Gateway. It allows utilities to interact with their customers through different communication channels. The solution comprises a set of standardised and reusable data services that can be used by end-user applications to access data and processes from the SAP business suite.

Central UP Gas Limited (CUGL): CUGL has successfully implemented the SAP B1 ERP solution in its operations, along with a unique customised billing process for its vast customer base. SAP B1 is expected to improve processes and functionalities. The company plans to gradually migrate to higher SAP versions, such as SAP R3 ECC 6.0, in order to ensure proper control and monitoring of all activities. The implementation of SAP has provided several benefits to the company. These include easy billing, establishment of the management information system, effective inventory management and smoother query resolution.

Adani Gas: Adani Gas has also effectively utilised SAP. The benefits of SAP implementation in the company include the provision of a single window solution to customers, shared services for common processes such as procurement and human resource management, easy transfer and reallocation of resources across the group, and reduced process durations for billing and invoicing.

Mahanagar Gas Limited (MGL): It is the first CGD company to have a SAP-based customer care module. The module is easily accessed from all its offices in and around Mumbai. MGL’s entire business has been integrated through the SAP-ERP system.

GAIL: It implemented the SAP ERP system in October 2010. In 2011, the company launched Asia’s first integrated gas management system implemented on the SAP platform. The system helps in monitoring the operational aspects of the pipeline on a real-time basis including information regarding network utilisation, gas sales, volume transferred, revenue generation and price variations.

Gujarat Gas: In 2012, the company implemented SAP ERP modules such as IS-Utility Customer Care System, inventory management and plant maintenance solutions to address billing, revenue collection, customer services management, metering management, inventory handling, and plant management.