The Next Level: Oil and gas companies move to advanced ERP solutions for operational efficiency

Oil and gas companies move to advanced ERP solutions for operational efficiency

The oil and gas industry is among the early adopters of the enterprise resource planning (ERP) system, as their operations are highly dependent on workflow management and market analysis. ERP providers are designing solutions specific to upstream, midstream, and downstream activities. After facing challenging years shaped by price volatility, many oil and gas companies have switched to lean operations and also realigned their strategy. In fact, change just seems to be the new normal and agility is more important than ever. Supervisory control and data acquisition, integrated with ERP, is becoming popular in the oil and gas industry given the increasing focus on safety. In the downstream segment, such integration is allowing companies to correctly map business processes, risk factors and control mechanisms, thus streamlining the resource utilisation and maintenance capabilities.

Emerging trends

Some of the key new and emerging ERP solutions are:

  • Smart metering: The natural gas industry is gradually making a shift from conventional metering to smart metering solutions. In order to check their unaccounted for gas losses, CGD operators are testing advanced technology solutions, smart metering devices and innovative equipment. These include automatic meter reading (AMR) systems, optical corrective reading devices, thermal meters, ultrasonic meters and prepaid meters. AMR systems are in place for commercial and industrial customers. Meanwhile, prepaid meters are in the proof-of-concept phase.
  • Big data and analytics: Data analysis has been a key component of the Indian oil and gas industry for decades now, with the upstream segment using sophisticated seismic software, visualisation tools and other digital technologies to analyse large sets of data and make data-driven decisions. Engineering equipment in the industry generates large quantities of structured and unstructured data from disparate sources on a daily basis. Through machine learning and big data analytics, the structured data sets can be better analysed to make intelligent decisions. Big data is expected to significantly disrupt the oil and gas industry. For instance, a major disruption would occur in the downstream retail CGD network, when a self-driving car would visit a prepaid refueling station on its own at midnight and replenish its fuel for taking its owner to the office the next morning.
  • Cloud computing: Sensors have become an integral part of oilfields. As these oilfields get connected, the flow of data increases and big data analytics continues to improve the value of accumulating data. In this scenario, data storage needs to be scaled up rapidly. Cloud storage offers highly scalable storage to meet the needs of even the most connected oilfields. For the majority of oil and gas companies, cutting costs is becoming a secondary concern as they focus on the power of the cloud to speed up decision-making. Cloud computing makes sense for small- to medium-sized oil and gas producers looking to develop a broader strategy aimed at effective digital innovation. Cloud computing is the perfect platform for artificial intelligence, big data and IoT. It also facilitates mobility in oilfields.
  • Intelligent enterprise: This is the next frontier of ERP. Organisations will have to re-architect their current ERP systems to leverage new-age technologies. Intelligence enterprise is also the key to long-term value creation. SAP’s next-generation business process platform, S/4HANA, is the fourth generation ERP and the core of intelligent enterprise. For digital transformation, SAP advocates simplification enabled by intelligent suite S/4HANA and innovation enabled by SAP Leonardo. Major energy companies, including Exxon and Chevron, have been using cognitive technologies to analyse seismic data and detect anomalies. Shell built an intelligent enterprise model to transform its end-to-end business and meet the growing demand for energy.

Larsen & Toubro Infotech Limited (LTI), a global strategic services partner of SAP, launched solutions that allow its customers to accelerate SAP S/4HANA migration and save as much as 20-30 per cent effort. LTI has developed several domain-based solutions including intelligent construction enterprise, a preconfigured industry solution for professional services, as well as an augmented reality-based solution for guided plant maintenance. LTI’s other solutions include SAP Leonardo-based intelligent asset management, LTI’s mosaic automation tools for leveraging central finance implementation, the LTI mosaic automation platform for SAP S/4HANA, blockchain-based supply chain, and a financial compliance solution.

In sum

Oil and gas companies are leveraging these advanced ERP solutions to meet the growing demand for energy in a sustainable way and leapfrog to the next level of efficiency. ERP software solutions allow companies to efficiently manage the different aspects of their offshore and onshore projects. Effective project management ultimately helps companies to complete their projects in time and within the set budget.