Recently, I was fortunate enough to participate in an ERP implementation for a publicly-owned oil and gas organization. Based on my observations during this project I identified four keys to ERP success in the oil and gas space that are applicable across various industries.
1. Relationships. A successful client-consultant relationship begins with organizational change management. Communication is the milk in the cereal bowl that holds these relationships together. Change management cannot occur without horizontal and vertical communication among people who are committed to the project’s success.
Similarly, the relationship between an organization and its chosen ERP vendor is important when it comes to industry-specific experience. In the oil and gas industry for example, a background in discrete manufacturing is not enough – find out if your ERP vendor has oil and gas experience specifically. The ERP vendor must have past experience with an oil and gas ERP implementation and a deep understanding of the relationships with related third parties and industry service providers. Even if the organization does not immediately recognize the need, the ERP software must provide tried-and-true modules for oil and gas project management, material management, asset management, maintenance, work order management, service order management, resource allocation, regulatory compliance, document management, human resource management and financial and performance measurement.
2. Resources. In most ERP implementations, organizations add new partners or blend corporate cultures that were formerly separated. It goes without saying that ERP selection should focus on the best fit for your organization, but few organizations consider their own employees and the ERP software’s impact on them. Employees need nurturing, change management and the time to properly implement the new solution. One of the biggest ERP implementation killers is not giving the project team adequate time and backfill resources. Expecting the project team to do two full-time jobs will lead to project fatigue among team members.
3. Risks. The oil and gas industry is known for its wild supply, demand and regulatory fluctuations. With the growing calls for alternative energy, infrastructure concerns and increased exploration and production costs, organizations must use carefully selected ERP systems to understand and plan for project risks in advance using powerful cost and schedule analysis tools. Organizations can obtain solid information on the relative success levels of a proposed project and quickly develop effective risk response and contingency plans.
With that said, there is still a need to be shrewd about risk management. If an implementation is proceeding slower than projected, forcing an unmovable go-live date on the project team must be carefully considered. It is better to push back go-live a couple of weeks instead of spending six months after go-live fixing a troubled implementation.
4. Revenues. Current ERP systems focusing on the oil and gas sector provide powerful tools to manage project portfolios. Several ERP systems enable organizations to manage schedules, project costs and resources to help ensure an on-budget and on-schedule project. ERP systems can increase an organization’s efficiency and mitigate risks associated with balancing multiple projects. Oil and gas organizations looking to remain competitive in the coming years will have no option but to implement integrate ERP systems to support all of their operations.
You do not have to walk in the deep waters alone. Panorama can walk with you and help your organization improve its business processes, execute successful change management, select the right ERP system and help you with all of phases of implementation.
Learn more by downloading our white paper, Organizational Change Management in Public Sector ERP Implementations.
Written by Rich Farrell, Senior Manager of Client Services at Panorama Consulting Solutions.