The oil and gas industry is known for its wild supply, demand, and regulatory fluctuations. With the growing calls for alternative energy and increased exploration and production costs, organizations must consider technology and process improvements.
For oil and gas professionals, this means looking for industry-specific software functionality that helps reduce risk, optimize productivity, and improve collaboration.
Today, we’re sharing a few ERP selection tips to follow that will set you up for a successful ERP implementation in the oil and gas industry.
How to Ensure a Successful ERP Implementation in the Oil and Gas Industry
1. Ensure Global Financial Capabilities
By nature, most oil and gas industries are global entities. Your physical facilities are spread out, and your employees and customers are, as well. This means there are multiple tax systems, currencies, languages, and local regulations to comply with.
You need an ERP system that can accommodate those geographic distances, allowing users to create custom reports based on their location’s needs. When each office can access the software to handle its own reporting requirements, it takes stress off the enterprise as a whole.
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2. Assess Real-Time Asset Management Functionality
From vehicles and machines to people, oil and gas companies have a range of different assets to manage. Often, these assets are extremely expensive, and it’s imperative to monitor their condition at all times.
Many industrial machines have integrated sensors designed to track and transmit mission-critical information. This information includes important data about the machine’s operational status and maintenance needs.
It’s important to have real-time visibility and insight into these assets. Look for an ERP system that can capture and audit the data and present actionable insights that your teams can use to guide more informed decision-making.
For instance, a dashboard for one asset might relay information such as:
- Geographic location
- Machine use time
- Amount of useful life remaining
Some unscheduled maintenance may be necessary as issues arise. Yet, it’s equally important to stay on top of regular, routine upkeep.
Oil and gas regulators often require that machines remain in good operating condition. When you can assess their status in one click, it’s much easier to remain compliant.
3. Assess Inventory Management Features
In addition to business assets, oil and gas companies need to monitor their inventory. At any given time, you should have enough inventory to keep sales numbers steady. However, you don’t want to amass too much and cut into your bottom line.
This is where an industry nuance comes into play. Unlike most sectors, oil and gas companies make investments based largely on uncertain factors.
For instance, you may learn from a geologist that a particular area has vast stores of oil, and you proceed based on that assessment. However, you might not know if that prediction was fully accurate until the area is fully pumped.
This inherent degree of variability makes the oil and gas industry unique. It can be difficult to manage your inventory if you don’t always know what you have.
It helps to use an ERP system that keeps a close eye on your inventory levels. This way, you always know where you currently stand, which can help you gauge whether a new investment is worth the risk.
4. Prioritize Quality Control Functionality
Oil and gas are obviously valuable commodities. However, it’s a well-known fact that many of the methods used to extract these substances could be potentially harmful to the environment if performed incorrectly.
This is why quality control measures are so important. Leaders in these industries need the ability to track each step as it occurs, and they should have access to the full breadth of quality testing data that exists.
This can help them minimize known risks, such as distribution losses. It also makes it easier to create compliance reports that detail the outcomes of key activities, including purification and refining.
A robust ERP solution makes it easier to visualize quality control efforts. In addition, it allows users to customize their approach based on customer accounts. Some clients have their own control measures they require you to follow, and a flexible ERP system allows you to do this.
5. Evaluate Other Industry-Specific Functionality
The oil and gas niche poses unique challenges because it encompasses multiple different sectors. For example, drilling and extracting companies have different needs than distribution operations.
In general, though, oil and gas ERP systems should have functionality that helps you manage project portfolios. In other words, you should be able to manage schedules, project costs, and resources, while mitigating the risks associated with balancing multiple projects.
The right cost and schedule analysis tools can help you obtain reliable information on the relative success levels of a given project and quickly develop effective risk response and contingency plans.
Other software features to consider if you’re about to embark on an ERP implementation in the oil and gas industry include:
- Material management
- Asset management
- Work order management
- Service order management
- Resource allocation
- Regulatory compliance
- Document management
- Human resource management
- Financial and performance measurement
Most importantly, the ERP vendor you select must have past experience with oil and gas ERP implementations and existing relationships with related third parties and industry service providers.
6. Ensure Seamless Software Integration
Think about all the data that exists across your enterprise software architecture. While each of these systems contains important business information, they may not be able to “speak” to one another. This leaves employees scrambling from one system to the next trying to find what they need.
When evaluating ERP software, prioritize solutions that can tie in seamlessly with your existing setup so you can ensure full systems integration.
In addition, think about the tools and technologies you may want to add in the future. You don’t want to invest a significant amount of money in an ERP system only to find it can’t accept certain third-party integrations.
The ability to add, remove, or adjust components as necessary is critical to ensuring uptime. Especially in this sector, time and money are intricately intertwined.
ERP Selection is Just One Piece of a Successful ERP Implementation
So you found an ERP system that can keep up with rigorous demands around compliance, inventory, quality testing, and more. Does that mean you’re all set for implementation?
Not quite. A technology-first approach is a recipe for ERP failure. In reality, a successful ERP implementation in the oil and gas industry requires pre-implementation planning, which you can learn more about in our blog post, ERP Pre-implementation Success: Your Step-by-step Guide.
Our ERP consultants can help you with ERP selection, pre-implementation, implementation project management, and everything in between. Request a free consultation below to get started.