Gaining Competitive Advantage - Aligning Enterprise Architecture with Business Value
- Zahid Habib (PwC US) | Ashar Zaheer (PwC US) | Ashutosh Ashish (PwC US)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- March 2011
- Document Type
- Journal Paper
- 52 - 55
- 2011. Copyright is retained by the author. This document is distributed by SPE with the permission of the author. Contact the author for permission to use material from this document.
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Senior management in the energy industry face a number of complex issues that can make for difficult days and restless nights. From volatile commodity prices and skyrocketing E&P costs to increased nationalism, more regulatory compliance and global recessions, there is no shortage of challenges in the energy industry.
During poor market environments, some companies adopt an extremely conservative outlook that includes sharp reductions in capital outlays, across-the-board budget cuts, and significant cost reductions. While these moves may be necessary to weather short-term conditions, they have limited long-term value and, in fact, can hamper effectiveness down the road. Energy executives seeking a more flexible, competitive organization should start at the company’s foundation—enterprise-wide processes and the supporting systems. Robust processes and proper alignment of the systems support governance, reduce complexity, eliminate redundancy, and generate sustainable cost reductions—while providing employees with the proper tools and data.
These business-facing processes and systems are built on and supported by the enterprise architecture. While companies typically focus on enterprise architecture from a back-office perspective, enterprise architecture should be viewed as enterprise-wide, all encompassing, front- and back-office foundational element. Oil and gas companies should take a hard look at their investments starting with a thorough assessment of their enterprise process, systems, and architecture.
Improve Alignment, Utilization
The accounting software used in the Houston office works. The accounting software used in the Brazil office works. But do the two programs work together? And if they do not, how much time and money does your company spend reconciling accounts?
These are the types of problems that are endemic in the energy business: legacy software programs that do not “talk” to one another, cobbled-together information technology (IT) systems from multiple acquisitions, and even separate IT groups, one supporting E&P and the other for the rest of the organization.
It is not uncommon for a field office to report that certain targets are being met—such as operational expenses, variances within range, production totals, etc.—only to find that headquarters has different sets of data and hence different results. These types of disconnects are costly both in terms of actual dollars and also in terms of productivity, efficiency, and employee satisfaction and requires significant manual consolidation, checking, and rechecking.
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