The oil and gas industry is an indispensable contributor to the industrialized nations driving almost every fundamental operation that keeps modern society running. In response to the growing demand to neutralize its carbon footprint, the industry has gradually shifted its focus from merely being a supplier to a stakeholder working to mitigate the sustainability challenges. To achieve the same, the industry must leverage an intelligent enterprise solution that can expedite the process while helping them prepare for the challenges of the present and future.
Status Quo! But What’s Next?
In light of the climate-conscious approach that has amassed attention globally, SAP has been instrumental in achieving the sustainability goals for many organizations across different industries. The latest iteration of SAP’s ERP platform and its best one yet, SAP S/4HANA has transformed a comprehensive range of operations that drove success using the high-performance analytical appliance (HANA), its underlying technology from which it derives its name. The S/4HANA platform offers the O&G industry a string of augmentations built for individual segments that were modeled after the industry requirements.
As SAP releases new versions of S/4HANA to evolve with client needs, the modules will be further adjusted per the organization’s specifications. But how does the industry stand to benefit from SAP S/4HANA in its current form?
Value Proposition offered by SAP S/4HANA
We are here to help you understand the value proposition by throwing light on strategic priorities addressed by SAP modules that can enable oil and gas companies to remodel their businesses to achieve sustainability goals without affecting their revenue streams.
Going beyond the product: The digital era has empowered consumers to realize how current business models are functioning and they are demanding a simple and improved service quality along with the product. The organizations should focus on understanding the customers’ energy needs closely to optimize the logistics, analyze their consumption patterns, consider storage limitations, and deliver accordingly. Like your consumers, even you can leverage the data by digitalizing with SAP to understand your consumer behavior to improve order commitment and fulfill them by tracking and managing inventory in real-time (live inventory management). Such track will allow you to predict and plan oil & gas replenishment and minimize storage costs as well as downtime for consumers.
Further, to sustain and absorb the effects of demand variability and market volatility, the industry must reimagine its products and services to deliver a better customer experience and thus generate new revenue streams. SAP S/4HANA can support in enabling the reimagined scenarios that has companies envision and implement to work in a digital environment.
Transforming production & delivery to minimize disruption: Scheduled maintenance and conditional inspections are no longer suitable in the high-performance culture that is driving the industry growth. Lack of resources to detect/ predict the risk of failure will widen the gap between promised timelines and actual deliveries. A reactive system is even more detrimental as it will not even minimize the risk.
On the contrary, transforming the system to predict disruptive events will greatly prepare organizations to optimize risk and the resulting cost and performance. SAP’s offering for asset management (Predictive Management and Service) accommodates real-time monitoring to detect any abnormalities in equipment’s operational limits to notify the need for repair/maintenance all of which contributes to the reduction in unplanned downtime and maintenance costs.
Strive to work as an ecosystem: As you grow, further success in the O&G sector depends on how safe, cost-efficient, and agile your operations are. But the obvious disconnect and siloes are counterproductive for the companies which operate on a large scale. This restricts access to business networks and prevents any responsive planning. To further elaborate the scenario, when different departments such as R&D, sourcing, sales, operations, supply chain, finance do not work together to plan ahead and rely on manual/legacy communication with internal and external partners, it limits visibility, collaboration is hindered resulting in obvious delays and multiple errors. Consequently, safety, agility, and cost-optimization efforts are compromised.
On the other hand, integrated digital platforms such as SAP Ariba, SAP Integrated Business Planning for Supply Chain with SAP S/4HANA for the core will help bridge the disconnect with the OEM from end-to-end. Linear operations will transform into digital networks creating a connected ecosystem that will continuously communicate to provide greater transparency, derive actionable insights, and optimize operations..
Unlock untapped potential: Often, unlocking new and untapped insights opens up new arenas in an existing business. However, in a business that has been around for more than a century, you will need to delve much deeper than conventional means would offer. Employing tools powered by advanced predictive analytics, machine learning capabilities, cloud computing, and blockchain technology, and collecting data by integrating sensors and IoT-enabled assets will help companies dig deeper into current practices and customer experience.
These changes integrated with SAP S/4HANA could uncover information leading to operational insights that can steer business operations in new directions that have the potential to optimize costs or even better create new product/service opportunities. You can also stand a chance to design an improved user experience and enhance process simulation to optimize the supply chain.
Even with great scope for value derivation using S/4HANA solutions, early adoption is an undeniable factor to steer ahead of the competition. The key is to understand your current status and then implement the right SAP modules for oil and gas companies to ensure the course correction results in real benefits. In a nutshell, the most common value proposition from digital transformation is to understand what operational improvements can be achieved with SAP S/4HANA implementation and how they can be achieved, and eventually know if they will result in dependable financial returns. Seek out the right partner whose expertise extends to help you understand all of that and then take you in the direction that works best for you.
Transform to transcend with the power of intelligent enterprise applications. RISE with SAP!
Exalogic for SAP:
Oil and gas companies can rely on SAP S/4HANA and its cloud component to reimagine speed, readiness, and the capacity to develop. However, in an industry that is challenged with legacy systems and disconnected stakeholders, you will need an implementation partner who understands your business priorities closely. Exalogic is a trusted and leading implementation partner of SAP in the oil and gas industry with a demonstrated expertise and dependable experience of over a decade.