1 T. Thomas
July 2012
Mkt & Sales and BI
Process & Business Systems
Nabil Mazzawi
May ‘08
PIDX
Global eCommerce Deployment and Change
Management
Terry Thomas
eInitiaitvives
September 2013
2 T. Thomas
July 2012
The Schlumberger Perspective & Promise
The 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.
3 T. Thomas
May 2013 For Better Informed Decisions
MEA – MIDDLE EAST &
ASIA
Eke Ugbaga Eke
Improving Business Efficiencies Through Best Practices in eCommerce
For Better Informed Decisions 4 T. Thomas
Sept. 11
Technical and commercial paperwork
always present in Global Oilfield Operations
5 T. Thomas
July 2012 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)
For Better Informed Decisions 6 T. Thomas
Sept. 11
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.
8 T. Thomas
July 2012
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
9 T. Thomas
July 2012
eCommerce – Trading Partner Agreements
1. Anadarko Petroleum
2. Anderson Energy
3. Antero Resources
4. Apache
5. Approach Resources
6. ARC Resources
7. Atinum E&P
8. Bahrain Petroleum
9. Barrick Energy
10. BHP Billiton
11. Bill Barrett Corp
12. Black Hills Exploration
13. Bonavista Petroleum
14. BP
15. Cairn India
16. Canadian Natural (CNR)
17. Carrizo Oil & Gas
18. Cenovus Energy
19. Chesapeake Energy
20. Chevron
21. Chief Oil & Gas
22. COG Operating
23. Common Resources
24. Compton Petroleum
25. ConocoPhillips
26. Continental Resources
27. Crimson Exploration
28. DCP Midstream
29. Denbury Resources
30. Devon Energy
31. Diamondback Energy
32. Eagle Rock
33. Encana
34. Energen
35. Energy XXI
36. Enerplus Resources
37. Enervest
38. Eni
39. EOG Resources
40. EP Energy E&P
41. Exco Resources
42. Fairways Offshore
43. Fidelity Exploration &
Production
44. Forest Oil
45. Gastar Exploration
46. Geosouthern Energy
47. Great Western Oil & Gas
48. Harvest Operations
49. Hess
50. Hilcorp Energy
51. Hunt Consolidated
52. Huntington Energy
53. Husky Energy
54. Indigo Minerals
55. Inflection Energy
56. Jetta Operating
57. Legacy Reserves
58. Legado Resources
59. Long Run Exploration
60. MacPherson Energy
61. Marathon
62. McMoRan Exploration
63. Mewbourne Oil
64. Murphy E&P
65. NAL Resources
66. Nearburg Producing
67. Newfield Exploration
68. Nexen
69. Noble Energy
70. Northern Blizzard
71. Oasis Petroleum
72. Oxy
73. Pacesetter Directional
Drilling Energy
74. Pengrowth
75. Penn Virginia
76. Perpetual Energy
77. Petrobank
78. Petrobras
79. Petro-Hunt
80. PetroQuest Energy
81. Peyto Exploration
82. Pinecrest Energy
83. Pioneer Natural
84. Plains Exploration
85. PostRock Energy
86. QEP Resources
87. Quantum Resources
88. Quicksilver Resources
89. Repsol
90. Resolute Natural Resources
91. Rosetta Resources
92. Samson
93. Sandridge Energy
94. Shell
95. Sinopec Daylight Energy
96. SM Energy
97. Southwestern Energy
98. Statoil
99. Sure Energy
100.Surge Energy
101.Swift Energy
102.Talisman Energy
103.TAQA North
104.Tecpetrol (US)
105.Total
106.Trilogy Energy
107.Tug Hill Operating
108.Tundra Oil & Gas
109.Ultra Resources
110.Urban Oil & Gas
111.Ute Energy
112.Vanguard Natural
Resources
113.Vantage Energy
114.Venoco
115.Whiting Petroleum
116.Wildhorse Resources
117.Windsor Permian
118.WPX Energy
119.XTO Energy
120.Yates Petroleum
Data Ownership, Usage, Confidentiality, Fees, Indemnification, Intellectual Property rights, Industry Standards, Third-
Party responsibility…
10 T. Thomas
July 2012
eCommerce Third-Party Agreements
1. 8over8 Ltd.
2. ADP
3. Alto Exchange
4. Amalto
5. Ariba
6. Basware
7. Biznet Solutions
8. Cortex Business
9. Coupa Software
10. Emptoris
11. EntComm
12. Futura Solutions
13. Grupo Advantage
14. Hubwoo
15. Iasta
16. Ketera
9. Pervasive
10. Petronect
11. Procuri
12. Quadrem (Ariba)
13. Tradeshift
14. TransZap (Oildex)
15. Verian Technologies
Acceptable Terms and conditions regarding eCommerce: Data Ownership, Usage, Confidentiality, Fees, Indemnification, Intellectual
Property rights, Industry Standards …
11 T. Thomas
July 2012 For Better Informed Decisions
Facsimile
Transaction Process Evolution
Supplier Customer
Postal
The “e-Envelope”
Internet
12 T. Thomas
July 2012
Industry
Standards
The “e-Envelope”
System-to-System Integration
Middle
Ware
ERP
System ERP
System Middle
Ware
Buyer Supplier
Middleware • Business Rules
• Routing
• Messaging / Acknowledgements
• Automated, not Manual, Browser-based?
Internet
13 T. Thomas
May 2013 For Better Informed Decisions
MEA – MIDDLE EAST &
ASIA
Eke Ugbaga Eke
Global eCommerce Change
Management
Business Process
• Proforma Invoice processes
• Fiscal Tax requirements
• Dual/Split Currencies
• Rounding Differences
• Major Resource Holder (NOC) requirements
• Cost Recovery - Joint Ventures
• Paper based - Original Document requirements
• Local Content
Business Landscape
• Major Resource Holders (MRH)
• National Oil Companies (NOC)
• Majors and Large Independent Oil & Gas
• Joint Ventures
14 T. Thomas
May 2013 For Better Informed Decisions
Fiscal Tax Requirements
Kazakhstan Tax Invoice
Israel Tax Invoice
Mexico SAT CFDI Tax
Invoice
• Original Document requirements
• Tax Law compliance
• Signatures Physical / Electronic
• Exact matching & Rounding Differences
• Local currency and language
• Consolidation
• Date timing
15 T. Thomas
July 2012
Sales & Billing System ERP
PIDX XML
PIDX
Su
pp
lier
Op
erat
or
Verbal
(or limit)
Order
Perform
Work Signed,
Scanned
FT(s)
Create SES
from Invoice
Cost
Assignment
Review/Appro
ve
PIDX
eInvoice
Create PO
from Invoice
Post Invoice
to GL
Process
Response
Message
Tax
Verification
Gov’t
Tax Doc
Documents
Attachment
or Original
Physical
PIDX Process + Fiscal Tax Requirement
16 T. Thomas
May 2013 For Better Informed Decisions
MEA – MIDDLE EAST &
ASIA
Eke Ugbaga Eke
Global eCommerce Change
Management
Manual Web Invoicing (Manual Invoice entry)
WebsiteSAP/Lawson
WRS/FTL
eZView
ComCat
Approval
WRS
OFS Invoicer
eZViewAccounting
Accounts PayableERP
Approval
Filing
Receiving
Routing
Coding
Invoice
Package
CustomerSchlumberger
Avoids
eProcurment systems
• One size fits all procurement processes
• Proprietary Web Portals
• SAP Supplier Users Service (SUS) Portal
• Ariba Suppliers Network (ASN)
• Quadrem Supply Center
• PDF Imaging and eMail invoicing
17 T. Thomas
May 2013
Portal Based
Approach
Late Revenue Recognition
Late Visibility for Job/Tendering
Manual Tracking on Commitment
No visibility on transaction
Manual Tracking
No End-to-End KPI
Dependent on Individuals
Inconsistent data
Dependent on Individuals
Extensive Manual validation
Time consuming
Costly
Error prone
Disagreement on Charge
Long cycle time
Suppliers Dissatisfaction
Not maximizing contractual
benefits
Fully Integrated
Solution enabled by
PIDX
Real-time Spend Management
Electronic Tracking of commitment
Less Invoice Rejection
Reduced Audit cost
Automatic transaction
Timeless
Effortless
Traceable
Reusable
Reduced execution cost
Electronic Envelop
Reduced invoice disputes
Automatic validation
Better cash management
Compliance to Payment Term
Optimized 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
18 T. Thomas
May 2013
Job Planning & Contracts Compliance
Billing Execution & Invoice Capture
Validations & Approvals
Payment Term & Working Capital
28 73
38%
0%
0
20
40
60
80
PIDX Portal
45 days in average decrease in cost capturing
38 % Time Improvement in early visibility on spend
50% Improvement on contract compliance
25% Decrease on in returned invoices
Fully integrated system to system solution enables
faster invoicing
=> Near real-time spend Management
Integrated solution enforces
Contract Compliance
Days
10 9 7
5
8 7 9
6
-
5
10
15
20 Returned
Invoices
Deferred
Revenue
$(M)
Job Planning & Contracts Compliance
19 T. Thomas
May 2013
Execution & Invoice Capture
Job Planning & Contracts Compliance
Billing Execution & Invoice Capture
Validations & Approvals
Payment Term & Working Capital
For 1000 invoices per month
Average 15K to 20K Lines per
Month
= 70 man days to submit the data
Error prone
Time consuming
Inconsistent data
Not scalable
Paper Invoice Typing
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 time
100% 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
20 T. Thomas
May 2013
Job Planning & Contracts Compliance
Billing Execution & Invoice Capture
Validations & Approvals
Payment Term & Working Capital
Validations & Approvals
97
21 46
10 10
41
9
7
21
6 6
28
-91%
-67%
-54%
-40% -40%
-32%
-20
0
20
40
60
80
100
120
Certifier-1 Certifier-2 Verifier Reviewer Approver Total Processtime
Portal PIDX
Electronic pre-verification based on agreed
business rules
=>32% Improvement in process time
38% Reduction full payment cycle
24% Improvement of exceptions handling
Days
96% Touch less invoice processing
100% Pricing accuracy
100% Avoidance of duplication
100% Contract/Invoice Matching
=>Fully integrated transaction pre-validation
Alert sent to supplier preventing invoice with
error to be sent
21 T. Thomas
May 2013
Payment Term & Working Capital
Job Planning & Contracts Compliance
Billing Execution & Invoice Capture
Validations & Approvals
Payment Term & Working Capital
93% Reduction in unbilled work by 1 year
=
93% Earlier visibility on buyer side on spend
Optimized cash flow management
Compliance to payment term
129
70
37 31 33
9
0
50
100
150
Q3 -Y0 Q4-Y0 Q1-Y1 Q2-Y1 Q3-Y1 Q4-Y1
Unbilled $M
M$
Fully Integrated
Solution enabled
by PIDX
=>From immobilized cash
To near real-time visibility to optimize operation activity
Fully Integrated
Solution enabled
by PIDX
22 T. Thomas
May 2013
Near real-time Visibility on spend & Optimized Working capital
Security/Encryption B2B fully integrated transactions
Transaction & Data Integrity ensured from delivery through protocol & secured channels
Catalog/Invoice Compliance Insured by System & System Integration
Reduced cycle time & Optimized cash flow management
Repeatable & Auditable processes
Electronic Verification
Global Industry Standard Solution Expand foot print across suppliers
Cost savings
Electronic Envelop - supporting documentation
PIDX Integration: 10 Overall
competitive advantages
23 T. Thomas
July 2012 For Better Informed Decisions
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)
24 T. Thomas
July 2012
Sales & Billing ERP
Su
pp
lier
Op
erat
or
Case Study #1 – eInvoice Processing
Verbal
(or limit)
Order
Perform
Work Signed,
Scanned FT(s)
Cost
Assignment
Review of
Invoice &
Match to FT
Post 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 as ‘2-way match’
Very low risk, fast ‘time to market’
PIDX
eInvoice
25 T. Thomas
July 2012
Sales & Billing System ERP
PIDX XML
PIDX
Su
pp
lier
Op
erat
or
Case Study #2 – PO ‘Backflush’
Verbal
(or limit)
Order
Perform
Work Signed,
Scanned
FT(s)
Create SES
from Invoice
Cost
Assignment
Review/Appro
ve
•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
26 T. Thomas
July 2012
Su
pp
lier
Op
erat
or
Case Study #3 – Imaging/Indexing
Verbal
(or limit)
Order
Perform
Work Signed,
Scanned
FT(s)
Translate
XML Inv to
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/Appro
ve
Manually
enter 1-line
invoice
27 T. Thomas
July 2012
Su
pp
lier
Op
erat
or
Case Study #4 – FT/Proforma Inv
Verbal
(or limit)
Order
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/Appro
ve
Review/Appro
ve
Process
Response
Message
PIDX eInvoice
Post to GL
Process
Response
Message
28 T. Thomas
July 2012 For Better Informed Decisions
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
29 T. Thomas
July 2012 For Better Informed Decisions
Realized Mutual Benefits
― Oil Company Customers ―Speed of payment and transparency
» Improved AP efficiency
―Contract compliance and managing commitments » More automated rate validation
―More timely tracking of costs versus AFEs
―Spend analysis » Auto coding of costs to GL accounts
―Drilling Engineers - drilling wells, not chasing paper
― Product and Service Company Suppliers (DSO) ―Improved liquidity from reduced DSO (Days Sales Outstanding)
» Customers’ payments closer to Contract Terms
―Improved AR efficiency and reduced AR costs
―Reduced duplication and administration costs
30 T. Thomas
July 2012 For Better Informed Decisions MEA – MIDDLE EAST &
ASIA
Eke Ugbaga Eke
Schlumberger Ongoing Integrations
Schlumberger Worldwide PIDX XML eInvoicing
For Better Informed Decisions 31 T. Thomas
Sept. 11
34 254 318
779
1,591
3,046 2,921
4,210
5,530
6,200
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Schlumberger Worldwide PIDX Invoice Transactions