The catastrophic price collapse has wreaked havoc on oil and gas industry, as it caused a surge in corporate defaults, over 86,000 layoffs and job losses, and crashing stock prices. With the historic dip in oil prices, a 68% dramatic plunge was witnessed due to a huge supply glut according to CNN, it is high time for oil and gas companies to assess the procurement and supply chain costs and techniques. The epic oil crash – 42% crude down in 2015 alone – has driven the idea home that the best positioned Oil & Gas (O&G) companies to win competitively will be the ones owning the fastest, most intelligent and agile procurement and supply management operations.
Accelerating Working Capital
Over the next 20 years the capital spend growth is estimated to surpass $19 trillion to meet the world’s energy demands. Many have turned to market innovations, however others have moved to unlocking ‘supply chain’ value by creating powerful Procure to Pay (P2P) process as a tool to boost shareholder value. Companies are looking to improve their internal usage of liquidity to prevent the need of raising bridge financing. One effective way is identified as accelerating order-to-cash and procure-to-pay cycles, allowing the companies to make working capital and cost savings.
From Complexity to Simplicity: Emerging Technologies
Leading-edge technology such as cloud, analytics software, integration platforms and in-memory computing can help O&G companies maximize all assets for optimum ROI. It is high time for the O&G companies to reduce complexity and turn to simpler solutions.
SharePoint’s cloud-based platform streamlines procure-to-pay process, including order transmission, supplier collaboration, and self-service procurement. SharePoint delivers reliable services that supports downstream, midstream and upstream operations and is able to help improve all business aspects of O&G companies – from sustainability to financials and enterprise asset management. The deployment of procure to pay process best practices, coupled with the implementation of SharePoint appears to be a coruscating way forward for O&G companies for cost reduction and focusing on optimal production and exploration. One practical instance of automating and improving the P2P/ O2C cycle through SharePoint can be accessed here.