What is Oil and Gas ERP Software?
ERP for oil and gas industry is operations specific business management software that overlooks all the start to end business processes related to energy companies. Oil and gas ERP systems have complete control on business operations management including drilling, extracting, purifying, and distributing.
A robust ERP software with business intelligence tools handles complex projects with real time traceability which ensures to identify and tackle the issues before it turns into problem. It provides support for each department including key features like financial management, project management, manufacturing, operations management, asset management, supply chain management, maintenance including workforces and natural resources.
Let’s get into deep details of the oil and gas business processes and how ERP systems are leading them, further in the blog.
About Oil and Gas Industry.
Oil and gas are the critical sector of global economy, supporting the energy needed for transportation, industries, and power generation. Oil and Gas sector is an expensive and complex industry.
It has to follow many regulations to maintain the compliance and safety requirements along with facing several challenges from the changing market conditions, volatile oil prices, environmental issues, sales revenue and increasing competition from competitors and renewable energy sources.
It is highly challenging for the industry to generate profitable income and cut down on costs, so it requires an efficient enterprise resource planning system.
A Quick Round-up of Oil & Gas Industry Challenges
1. Refining Crude Oil at the Lowest Possible Cost.
2.Unexpected Shutdowns of plants.
3. Reducing Environmental Impact.
4. Increased Competition from Alternative Energy Products.
5. Strict Legislative Frameworks.
6. Asset management
ERP in Oil and Gas Industry
Oil & Gas industries are among the early adopters for ERP system, as for a major section of the industry is dependent upon the precise workflow management and market analysis. An ERP system can increase the efficiency of the organization, while aiding you balance multiple projects & operations effectively. Furthermore, ERP solutions provides customized easy to use modules such as sales, purchase, inventory, financial management, project management, field service management, supply chain etc. that can enhance and streamline your business processes.
Oil and Gas Industry managers are always on their toes to meet the ever-increasing demand of the commodity as well as managing between the fluctuating regulations and resources. The inculcation of a smart gas ERP software solution such as Sage X3 can simplify the entire process with its agility and flexibility to get apt with the user’s needs.
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Challenges faced by Oil and Gas Businesses:
Oil and gas producers go through many challenges, some of them are detailed down,
1. Equipment Readability
Decreasing downtime and improving equipment reliability are two of the most critical challenges for oil and gas companies. Real time fixed asset management software is essential for companies to constantly run their equipment within the optimal range as mentioned by the Original Equipment Manufacturer (OEM), which helps boost the “Mean Time between Repair Replacement.”
2. The Workforce is Aging
The aging workforce is a massive challenge oil and gas companies—the main reason being the high amount of risk and volatility in this sector. As a result, when experienced employees leave, companies feel the pressure of onboarding new contractors and employees. But the main problem is that they are less experienced in their jobs and unfamiliar with how processes are executed. So, training sessions should be provided to them before they perform their job efficiently.
3. High Possibility of Accidents
The oil and gas industry are susceptible to various large-scale events, such as shutdowns, turnarounds, lockout/tagout, and equipment isolation events that require a lot of planning and a few days, weeks, or months to return to normalcy. Also, oil and gas companies are easy targets for large-scale accidents during shutdowns and need extra care and planning to keep employees safe.
4. Frequent Inspections
The oil and gas industry needs facility and equipment inspection at regular intervals. These inspections require emergency response equipment, temporary structures, operational readings, moving equipment, ladders, and much more. In addition, these inspections ensure that the processes go on efficiently, that there are no communication lapses between various departments, and that full measures are taken to ensure employee safety.
5. Ensuring Spill Control
Oil and gas companies need to be wary of leaks and spills as they can cause massive destruction if not controlled on time. Many cases have been reported where employees have got third-degree burns or died due to failure in delivering a quick response.
Benefits of ERP Software for Oil & Gas Industry
Enterprise resource planning system, support functions of the business and integrates all the data and information into one platform, which makes handling of the processes more efficient and increases productivity.
ERP software has both client-side and server-side functionality which can be modified to match the different business requirements. Let’s see the various functionalities and key features provided by the ERP systems:
1. Fleet Management Tools:
Gas ERP software assists with tools like fleet management, which stores details regarding quantities, delivery addresses, and preferred time windows. You can also capture information about vehicle types, allotted capacities, and driver shift details. Moreover, you can edit proposed routes and send confirmation to drivers with driving instructions and maps.
2. Fixed Asset Tracking and Maintenance:
ERP system maximizes productivity and helps to reduce total acquisition cost, maintain equipment’s, and adhere to environmental safety regulations. Asset maintenance becomes easy from offshore drilling rig, refinery, to a trans-national pipeline. ERP platform facilitates asset maintenance, defines its value from time to time and give insights to where an asset should be employed to gain maximum productivity.
ERP software systems like Sage X3’s Enterprise Asset Management module enables reducing costly downtime and keeps the fleet and equipment in perfect working condition. It also works on depreciation and amortization of the assets.
3. Customized Configuration for Analysis and Production:
Oil & gas ERP software offers scalable and comprehensive solutions for development, exploration, and production processes in the Oil & Gas industry. The best part is that multiple local partners are available globally to help you set up operations. SAGE Software Solutions is a comprehensive suite of applications for all Oil and Gas company-related operations as it facilitates rapid deployment.
4. Inter-company Transactions:
Gas ERP system provides standard management rules and a single frame of reference that facilitates a multi-company, multi-legislation, and multi-site structure. It automatically generates purchase flows and inter-company sales that provide a comprehensive view of operations. This software allows Oil & Gas companies to minimize errors in inter-company transactions, increasing profitability and efficiency in the long run.
5. Data Analytics for Costing, Production, and Sales:
Oil and gas ERP systems like Sage X3’s data analytics module allows executives, managers, and CXOs to create meaning from data. It also provides a clear picture of all the business activities, including operations, sales, financial management, supply chain and cost analysis on a single dashboard. In addition, ERP accounting software offers a comprehensive and unified view by collecting and analyzing data from multiple sources.
6. Inventory Management:
Inventory is an important asset to be managed as business needs enough oil and gas stock to meet the demand and generate profits. With the help of warehouse management system, one can easily manage under stocking and overstocking to prevent extra costs.
In oil and gas sector, the inventory component is uncertain and based on assumptions which can be confirmed after drilling out the last drop of oil. New stock is found with the help of new techniques like fracking.
Enterprise resource planning is also responsible for lot and batch traceability and manages all the details of the stocks.
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How can Sage Software Solutions help you solve the industry challenges?
ERP oil and gas, SAGE X3 & SAGE 300 easily integrates with third party business applications, thus monitoring resources and expenses across your organization becomes easy. It allows users to access data in real-time, empowering them with critical business information like financial reports that further helps them to take vital decisions.
It manages the overall operations including rig managing, land and water management, site engineering, tracking the fleet, maintaining compliance, customer relationship management, and checking performance of the workforce and project progress. Below are its quick features:
1. Notification & approval
The pipeline connecting the IT team with the field operations department is a one-way road, meaning it’s challenging to send notifications, alerts, messages, updates, or requests back to the IT department from the field. So, field operators rely on manual courier services to send data back to the IT team, which leads to erroneous data.
On the other hand, enterprise resource planning facilitates the free sharing of critical business data with all relevant stakeholders, dramatically increasing the speed of notifications and approvals.
2. Problem detection & resolution
Gas ERP system allows oil and gas companies to quickly detect issues and resolve them. For example, it can intercept the message from a field system and forward it to the troubleshooting team for resolution. Thus, the ERP systems can set up automated alerts for delayed field activities.
3. Capacity planning
Capacity planning is essential for every industry as it helps estimate the size of the workforce, raw materials required, and equipment needed. For example, ERP for oil and gas companies helps achieve a reasonable forecast, perform complex analysis on historical data, and create automated systems for performing jobs more efficiently and in a fraction of a second.
4. Collaborative planning
Typically, the supply lines in the oil & gas industry are too long as they travel from the main headquarters along various booking agents and suppliers to reach the end-user. Thus, companies must maintain excellent relationships with multiple stakeholders to resolve contractual issues that may come up due to the long length of the supply line.
ERP solution maintains the free flow of information between different parties, allowing easy collaboration with various industrial sectors and helps resolve issues quickly and efficiently.
5. Cybersecurity
Cyber-attacks are rising rapidly. According to the report revealed by Ponemon in 2019, an average data breach causes companies to lose USD 3.92 million. So, it’s an alarm bell for oil and gas companies for securing their assets from falling into the hands of hackers.
Fortunately, an ERP solution has data security modules pre-loaded with the latest encryption algorithms that protect assets, especially pipelines, from hack attacks and shield the organization against significant losses.
6. Standardized Field Data
Input is sent from field units to the central unit through a complex pipeline network in the oil and gas companies. As a result, data from different field units must be standardized to be recognizable during the integration process. Sage X3 is the best gas ERP system for the oil and gas industry because it helps convert proprietary data into a standardized format that stakeholders across the enterprise can analyze.
7. Active scheduling
ERP software should work in tandem with the operational schedules in the gas organizations. ERP software’s maturity level dictates the level of integration between the operational schedules and the gas ERP systems. New cloud ERP solutions are better equipped to support these integrations, as they are more specific, narrower, and fully enabled.
8. Local and Global Reporting:
Oil and Gas is a global industry, which serves and operates in different countries. Every country has their own regulations, which the company should analyze and modify according to it. Hence ERP systems is a perfect tool to be updated of all the regulations, balance reporting and work according to it. It also facilitates global financial reporting.
9. Quality Control:
While oil and gas products are highly valuable, they are also a hazard to the environment, hence quality control is crucial in this sector. ERP systems tracks and minimizes loss occurrences that can be in the form of liquids, gas or solids and aids compliance reporting.
Thus, with best ERP for oil and gas industry SAGE X3 companies can boost its processes and performance, the modern-day ERP solution in India and bid farewell to fatal errors and hazards harming your business.
Conclusion:
Hence, ERP as a business intelligence software is essential for smooth operations of the business. It enhances the safety with AR automation during production process, reduces expenses, enhances supply chains, improves customer satisfaction while also adhering to the regulatory compliances. It also facilitates inter-departmental communication and collaboration, boosting productivity and efficiency.
Sage Software Solutions is a leading IT company with an array of advanced ERP software solutions. The user-friendly interface of the best ERP software SAGEX3 & SAGE 300 will help you cut your operational expenses, improve business productivity, increase operational efficiency, forge robust customer relationships, improves human capital management and strengthen association with vendors, suppliers, and distributors.
So, if you are looking to reinforce your business fundamentals and emerge as an industry leader, then please schedule a call with one of our sales representatives.
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