Five Ways Operators Can Reduce Costs

by Susie Yuill, Enverus Integrated Marketing

Susie Yuill

COVID-19 has radically altered the patterns of our daily lives, including our ways of doing busines. As the end of the year approaches, many businesses routinely find themselves assessing how they can perform better in the future. And while the pandemic has been devastating on multiple fronts, one thing is certain: it has created even greater urgency—and opportunity—for efficiency and innovation in how we operate. Sure, some will wait but others will wisely act and embrace change.

Investing in technology is a proven way for any company to become more efficient. Specifically, investing in software to manage back-office operations is an area where many in oil and gas still have room for improvement.

While there are plenty of articles on the internet with headlines like “How Technology Is Revamping the Oil and Gas Industry,” “Digital Technology Trends in the Oil and Gas Industry,” or “How Technological Advances Can Transform Oil and Gas” to educate energy companies on the next big thing, there isn’t much information to guide energy companies on how to uncover additional opportunities for better cost control and increased operating efficiency using their current back-office technologies.

Yet, during a downturn, examining your existing tech stack and processes to find new opportunities for improvement is a much more realistic, effective, and achievable initiative than investing additional dollars in new, unproven technologies. At Enverus, we’re fortunate to look at countless data streams and identified five ways the oil and gas industry can maximize the value of their current back-office technologies and processes.

1. Leverage Training on Processes and Technology

Employees come and go from an organization. And with them goes the knowledge of your software and business processes they acquired while working at your company. Over time, as new employees come in and learn the job, it is common to lose that functional knowledge of how to properly leverage a solution. And training doesn’t have to be limited to just your employees. Training vendors on price books and compliance issues can cut down on the time needed to manage others. Dozens of hours per week can be saved—and time is money.

2. Ensure You Have the Right Reports to Properly Manage Your Operations

Data is worthless unless you can easily synthesize it for analysis. Are your existing systems configured properly so you can get the right data for a critical analysis to perform budget forecasting, conduct cost analysis, and view and manage spend? Additionally, ensure your team knows how to pull the reports and analyze the data. Your technology vendors should be able to assist you in understanding your system’s reporting capabilities and guide you on how to create custom reports as needed.

3. Find Opportunities for Process Improvement

Evaluate your workflows. Are there specific areas where there are bottlenecks? Are there long ticket approval times, long payment cycles, or delayed invoice approvals due to high volumes? Adding additional automation, removing extra steps, modifying the sequence of steps, or changing who performs the steps in these specific areas could make your entire workflow faster and more efficient. For example, the invoice approval process can be known for creating bottlenecks within accounts payable (AP) systems. Often, in this approval process, the same person that approves the field ticket must also approve the invoice, creating an unnecessary double touch. Touchless invoicing is just one example of a process improvement opportunity that helps oil and gas companies reduce their overall invoice processing cycle times, which leads to more early pay discounts. By removing repetitive, manual work through process improvement, your team can focus more on high-value activities like cost analysis, forecasting, and budget control.

4. Close the Digitization Gap

Some operators haven’t fully digitized their back-office processes and could see benefits from closing these gaps. For example, a company might use an AP management software (like OpenInvoice) to process digital invoices, but may still be using paper field tickets. When used together, OpenInvoice, OpenTicket, and PriceBook help operators manage critical areas of their overall AP workflow and create the possibility of automation, such as touchless invoicing, making your entire process more efficient. By moving to digital field tickets, a company can accelerate ticket approval times, shortening its entire invoice processing cycle.

5. Outsource Work

Are there tasks your team handles internally that can be outsourced? As operators strive to streamline costs and operations, business process outsourcing proves effective in meeting these demands. By hiring another company to perform some of its work processes, such as phone calls or printing and mailing monthly revenue checks, operators can save time and money because the service provider can perform the job more efficiently at a lower cost.

Of course, these are just a few areas to consider in order to save additional time and money. Likely, once you begin your own audit, you’ll uncover more ideas. Once you’ve created a list of potential initiatives, do a strategic analysis by determining the estimated time and cost of each initiative compared to the impact it will have on your organization. Based on this analysis, you can determine what makes sense to implement first.

There’s no doubt we’ll look back and find a label for this period of epic uncertainty. It will be full of dramatic drops, both in terms of revenue and resources. And while accounting teams are running on down-sized teams with less resources, many are finding that outsourcing business processes is a viable option to easily scale up or down as needed without hiring additional resources. Was 2020 a tough year? There’s no doubt. But we’ll also look at how we adapted and ushered in a new era of oil and gas marked by scalability, flexibility, innovation, and, most importantly, automation.

About the Author:

Susi Yuill is an Integrated Marketing & Product Marketing Manager at Enverus focused on spreading the message about how energy companies can do more with less and improve cost controls with business automation.