An extra boost

Organisations in the energy sector are grappling with challenges ranging from supply chain disruptions to extreme weather and political instability. It is harder than ever to predict outcomes, which only increases the importance of understanding and taking command of variables business leaders can control.

While recent surges in energy prices have led to record profits for many organisations in the space, leaders are all too aware that commodity price surges cannot be relied on for future success. Uncontrollable outcomes are a part of life in the energy sector, hence why business leaders are focusing on initiatives to boost operational performance.

Process intelligence technology offers organisations in the oil and gas space a way to take control in an unpredictable world and gain an unprecedented understanding of their own operations. This can deliver millions of dollars in savings and increased visibility across everything from plant maintenance to processing invoices, offering a way to drive efficiency and change across the sector.
There is already a huge drive within the industry to incorporate more automation into business processes. Research by Gartner shows that 60% of CIOs in the oil and gas sector are increasing investments in business insights and data analytics, alongside 51% who are spending more on cloud platforms.

The pandemic accelerated these efforts, as leaders in the sector were forced to do more with less, and turned to digital transformation and automation to mitigate the effects of workforce reduction. But now business leaders at organisations which have ‘lagged behind’ are seeing the success stories of those who have invested in digital transformation and are making their own efforts to catch up, further accelerating this push. This move away from legacy architecture and towards a less siloed future offers business leaders a key opportunity to improve liquidity, resilience and revenue. Process intelligence will be central to this.

Finding horizontal value

Leaders in the energy sector have already made efforts to rebalance insourcing and outsourcing, bringing non-core processes back in house to increase control, while improving data-integration capabilities. The ultimate goal is to achieve a setup where operational insights are actionable, accessible and reliable. This can be seen as delivering ‘horizontal value,’ where different departments and functions are connected by a common language, revealing new ways to improve liquidity, revenue and productivity. This is where process intelligence technology comes into its own.

Process intelligence technology is built to model and optimise business processes, based on ‘event logs’ across processes such as invoicing or procurement. One way to think of it is as an MRI scan which shows how processes actually run across a business, rather than the way staff or management have always assumed they run. For companies in the oil and gas sector, process intelligence technology enables business leaders to create a living ‘digital twin’ of their entire business, taking in everything from hydrocarbon logistics to maintenance, and uncovering hidden value opportunities. Paired with artificial intelligence (AI) to offer rapid next-best-action recommendations, this can be a transformative technology in the sector.

Sustainable value for businesses in the energy sector lurks in the connections between departments and functions. Many energy companies have already invested significantly in digital transformation technology such as cloud-based enterprise resource planning (ERP) but even with the addition of digital solutions such as business process management tools, have yet to see significant returns. Process intelligence can offer a common language which enables business leaders to ‘connect the dots.’

Broadly speaking, the energy solutions market is divided into two halves. One half is saturated with products and digital services which generate process data, and the other half is saturated with solutions that help organisations to run automations. What is lacking is a solution to help analyse and improve the underlying processes, as many companies are still grappling with complex infrastructure, and the multiple acquisitions and mergers in the sector only serve to make this more complex. Process intelligence offers a bridge between these two halves, and a connection across the whole organisation, offering readily accessible and actionable insights which can highlight hidden value opportunities. This offers companies in the sector real and measurable ways to cut costs in operations.

Improving maintenance

Process intelligence, combined with artificial intelligence, can deliver measurable cash impact in several ways, including in helping to maximise asset uptime by increasing the efficiency of plant maintenance operations. Downtime is extremely expensive in the energy sector, where a mere 1% rate of unplanned downtime (3.65 days per year) can cost organisations upwards of US$5 million annually. Minimising downtime is very difficult using standard business process management software.

Plant maintenance sits at an intersection for manufacturing companies, depending on upstream processes such as procurement and inventory management. Business leaders need insight into how material procurement and logistics will affect maintenance schedules, and into the root cause for unplanned and unscheduled maintenance, and the real reasons for maintenance delay.

Process intelligence enables business leaders to visualise a process as it runs in source systems, based on event logs extracted directly from enterprise resource planning (ERP) systems. Plant maintenance often involves multiple teams from procurement, accounts payable, to inventory and materials management, each of which all too often operate in their own silos.

Process intelligence works as a ‘force multiplier’ here, enabling business leaders to orchestrate continuous process improvements and zoom in on the factors that are creating problems. Using process intelligence, business leaders can see how problems in one area connect to others, for example how delays in material procurement might affect maintenance schedules. Process intelligence can pull in data from systems to help business leaders understand why a scheduled adherence rate might be low, along with next-best-action recommendations, taking in the real-time flows between material reservations, work orders and purchase orders. Business process management (BPM) tools are very limited when it comes to dealing with problems like this.

Improving flow and efficiency

Businesses are leveraging the combined power of process and task intelligence to improve efficiency and root out problems in operations. Organisations are using a task mining to capture pain points, for instance how many hours of manual data entry are required from console operators, who spend multiple hours a day copying and pasting data. With task specific data, business leaders can focus on how to adapt emerging technologies to eliminate low-value work and create safer operations.

In accounts payable, teams are using process intelligence to tap into invoice-management modules and identify duplicate invoices before they cause problems. The process intelligence platform groups together invoices that are suspected of being duplicates, using a machine-learning based ‘confidence score’ to pinpoint likely duplicates and prevent unnecessary payments. Built-in automation can then help to block future duplicates. Prior to using process intelligence, business users were all too often using Excel spreadsheets to analyse data on a monthly/quarterly basis: but business leaders are now able access data daily and are recovering millions of dollars across the organisation.

Process intelligence can also help to specifically root out delays in invoicing, helping to enhance resilience and secure longer-term value. Similarly to downtime, given the scale of large energy companies, even a day’s delay in invoicing lead time can result in millions of dollars in cash-flow impact. For companies which have highly complex supply chains and product ranges, it can be difficult to hone in on the problems and track high-priority KPIs like customer cancellations and invoicing lead times. Process intelligence offers every team involved in the order-to-cash process the same real-time, end-to-end picture.

Finnish oil refining company Neste was able to cut their invoice lead time in half, with a monthly cash flow impact estimated at €55 million, using process intelligence. Neste, the world’s largest producer of sustainable aviation fuel and renewable diesel, was able to gain visibility over supply chain processes and its commercial processes, allowing leaders at the company to home in on value opportunities, such as the 20% of invoices which were delayed. Process intelligence can also help to boost cash flow by accelerating slow-moving inventory and helping to reduce excess, offering an overview of real-time replenishment and consumption trend data. These data-driven assessments can help business leaders uncover further automation opportunities and move towards a future where invoice, sales order and purchase order processes are all touchless.

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