Oil Field Service Companies Prepare for Growth
In Western Canada oilfield services and equipment (OFSE) companies in the upstream sector have suffered from a decline in capital spending, reducing project opportunities and impacting margins. Revenues have fallen significantly as E&P operators slashed budgets, cancelled projects and pressured suppliers to cut pricing. Many service vendors scaled back, in turn, tightened their capital budgets and reduced staff and other overhead to remain viable. There is no easy answer for dealing with these conditions, and in some cases, this cost-cutting has reduced the vendor’s ability to compete out of position for future growth. And so, it goes, without change, the cycle continues, until the next downturn emerges and the pain returns.
New Path Forward
Fortunately, there are new industry-specific technologies helping operators to look outside their organizations to find novel ways to lower their cost. Being proactive and focusing on collaborative initiatives that reduce costs for suppliers and customers goes a long way to maintaining viability and preparing for the inevitable growth in the industry. One consideration is process automation with information technology. In the recent past, ERP software was expensive, and it was difficult to evaluate the return on investment. “One size fits all formats” resulted in expensive infrastructure, costly customization and painful implementation. Today Cloud-based software specifically tailored to the OFSE industry has been developed and is available and affordable for small and medium businesses.
This Oilfield Service software is “industry-specific” and uniquely engineered for managing Oil Field Service operations. Typically it integrates with an existing accounting system and manages inventory, equipment, and all the elements required in the field ticket process. It provides single database access to information, holds customer and vendor details, streamlines estimates, approvals, and change orders, and is the foundation for effective communication; within the organization, out in the field, and between suppliers and customers.
The result is shared productivity gains by both the customer and vendor. More efficient operational management enables vendors to react faster with more accuracy and still stay at the lower end of the cost curve. This approach creates efficiencies that enhance relationships to create valued partnerships while cutting costs on all sides.
Below are several important benefits Cloud-based information technologies provide to streamline OFSE operations;
- provide more flexible business models to better align with incentives
- development of integrated, just-in-time supply chains to reduce total operational cost
- automate parts and materials purchasing from prime vendors
- identify opportunities to optimize equipment maintenance
- reduction of reworks, errors, and duplicate entry
- empowers field personnel with real-time data access
- reports actual-time status and profit tracking on projects
- streamlines invoicing for faster payments
- manage customer and vendor relationships by capturing and sharing access to critical information
- increase growth and scale-ability
- customize reports and analytics in real-time
- financials available
Recent events are encouraging many to feel we are on the verge of another upward cycle. As with any disruption, the winners will be the players who can spot opportunities and act quickly to capture them. These and other potential capabilities require research, planning, implementation, training, and practice. If you wait to harness the technological benefits available till things are “too busy to consider”, you will miss the opportunity and be stuck in the past.
For more information contact us today.