Capital and Spend Effectiveness - a248.g.akamai.neta248.g.akamai.net/n/248/420835/fbda860710b5f92861... · The stakes are high, and the competitive landscape is changing. To gain

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© 2014 SAP AG or an SAP affiliate company. All rights reserved.

Optimized

Performance

Oil and Gas

Capital and Spend Effectiveness

Executive

Summary

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© 2014 SAP AG or an SAP affiliate company.

All rights reserved. 2 / 29

Capital spend in the energy industry continues to grow. Estimates suggest it needs

to exceed US$19 trillion over the next two decades to meet world energy demands.

Organizations must focus on enterprise portfolio management, effective program

management, and optimization of procurement processes.

The energy industry is asset intensive and

requires massive capital investment. How a

company allocates its multibillion-dollar

investments is critical.

As the extent and complexity of capital

programs expand, companies can struggle with

management of their capital portfolios, often

suffering overruns in budget and timelines.

Given the size of these investments, this could

have catastrophic consequences on the

financial well-being of an organization.

Conversely, improving management of capital

investments, and the associated operating

spend, can lead to a direct and significant

increase in the return on capital employed, as

well as profits and shareholder value.

The key challenge is to translate the business

strategy into an optimal portfolio of capital

programs that can be flawlessly delivered.

Best-in-class organizations achieve this

through integrated portfolio planning and

project execution, supported by a strategic

approach to sourcing and supplier manage-

ment. Leveraging the complex and diverse

network of suppliers typically engaged in this

type of program is vital, together with a seam-

less procurement process. In addition to price,

suppliers are increasingly measured by their

operational impact and service quality.

Maximizing Return on Capital Employed

Optimize Performance

Maximize Capital Return

SAP Innovations

Gain Competitive Edge

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Optimized

Performance



The delivery of an optimized capital project portfolio is underpinned by an

investment program that is fully aligned with business strategy. Best-run companies

select the right projects, deliver them flawlessly, and support delivery with a

comprehensive sourcing and procurement strategy.

Optimize Capital Portfolio Performance

Strategy management, project management,

and supplier management are increasingly

important core competencies for energy

companies. Organizations are dedicating more

resources to select, orchestrate, and monitor

investments. The most successful of these

involve the management of a large number of

specialized and well-integrated suppliers.

The diverse nature of today’s organizations

creates challenges with the harmonization of

processes. The trade-off between process

flexibility and compliance must incorporate a

rules framework, underpinned by software that

guides, supports, and controls activities.

To optimize performance across the

organization, projects should be centrally

controlled and monitored in real time, to allow

proactive actions to be undertaken. Strong

visualization and in-depth analytics support

users, enabling proactive identification of and

alerts for deviation risks and issues. A key

principle is that the software manages routine

activities and sends alerts, freeing project and

procurement specialists to focus on the high

value-adding elements of their roles.

The introduction and leveraging of business

networks and data connections further

automates the business, improving efficiency.



SAP Innovations


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Best Run Oil and Gas

http://www.youtube.com/watch?v=MJubrV29fOA



The stakes are high, and the competitive landscape is changing. To gain a clear

strategic advantage, energy companies must plan and execute their capital

investment programs flawlessly and flexibly while maintaining a long-term

investment and operating outlook.

Gaining Strategic Competitive Advantage

To gain competitive advantage from capital

investments, organizations must objectively

select, approve, and effectively deliver their

portfolio. Companies must align corporate

strategy and operational goals across the

whole enterprise, with the identification and

proactive management of any arising risks

and issues.

Organizations must align budgeting and

resource planning in accordance with strategy.

They should also measure and control

performance against strategy by embedding

appropriate regulatory and compliance controls

into processes.

Data can often exist in disparate systems, with

business decisions made based on information

that is neither timely nor accurate. Companies

can reduce planning cycle times and improve

accuracy in forecasts and budgets by consoli-

dating data and incorporating effective project

controls and collaboration tools. A single view

also results in increased process transparency

and optimized project profitability. Business

modeling and what-if simulation enables scen-

ario analysis and risk mitigation.

Spend analysis, strategic sourcing, and contract

management tools drive procurement efficiency.

They also help companies to automate stan-

dardized processes, reduce noncompliance, and

boost savings.

22% Higher asset productivity

where companies optimize

the asset lifecycle through

long-term financial planning,

utilization, upgrade, and

replacement plans

Source: SAP Performance

Benchmarking



SAP Innovations


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https://valuemanagement.sap.com/disclaimer/



streamlining processes and eventually lowering

costs. Considering the multiple back-end

systems involved, the onboarding of suppliers

must be efficiently managed.

Mobile solutions have improved process

efficiency, providing access from anywhere

and smart dialogs for project operations and

procurement. Extensive opportunities exist in

offshore operations for mobile solutions to

support the business. These include stock

management, logistics management, and cart

approval.

A huge amount of data is generated by project portfolios and the intensive

collaboration with suppliers that is required. High-performance analytics is critical to

monitor, post alerts for, and display every dimension of investment, project phase,

and procurement decision.

The SAP HANA platform manages millions of

data records almost instantly. It is perfectly

suited to providing analytical insights into

projects as well as into business data, such as

procurement history, spend analytics, or

supplier performance. Analytically based

dashboards display relevant and role-specific

information.

Collaboration is an important part of project

realization and procurement, enabling tight

integration and accessibility of business

partners. Cloud-based procurement enables

companies to manage multiple suppliers,

SAP Innovations



SAP Innovations


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Optimized

Performance



Capital and spend effectiveness embraces strategic planning and execution. It

includes monitoring the project portfolio, strategic sourcing, and procurement at an

operational level.

Optimized Investment Portfolio

Align capital investment programs with business strategy and enable transparency.

Efficient Program Execution

Maximize capital return throughout the project lifecycle through flawless execution.

End-to-End Supplier Management

Manage the supply base effectively, giving focus according to criticality and volume.

Advantage Through Procurement

Monitor performance and help ensure conformance and compliance with contract

lifecycle management.

Network-Based Collaborative Commerce

Connect a dispersed and diversified supply base, ensuring error-free transactions.

Optimizing Capital Performance

Optimized Portfolio

Optimized Performance

Strategic Sourcing

Supplier Management

Efficient Execution

Collaborative Commerce

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Optimized

Performance



Maximize the return on capital investments by ensuring

corporate strategy and operational goals are aligned

across the enterprise. Gain competitive edge by ensuring

transparency across the investment program. Establish

proactive risk mitigation and complete reporting of actual,

budgeted, and forecast data.

Best-in-class organizations operate closed-loop

strategy management. They align corporate

and operational goals across the enterprise

with tightly linked financial and risk

management.

Alignment across the organization is critically

important and enabled by cascading themes

and initiatives. Increased profitability comes

through modeling and optimization with

dynamic what-if simulation of resource and

capacity planning leading to optimized plans.

Companies can reduce planning cycles by

putting in place automated, aligned, and

collaborative processes.

Organizations must review the profit and loss of

each project and assess financial and

nonfinancial measures, key risk indicators,

themes, and initiatives. Operations planning

focuses on tracking the costs of key business

processes and planning resource and capacity

allocation prior to detailed budgeting.

During the execution phase, constant monitor-

ing of strategy, objectives, key performance

indicators, key risk indicators, and initiatives is

essential. A complete overview of all drivers is

enabled through the use of a balanced

scorecard.

Optimized Investment Portfolio

7% Lower variance between

budget and actual cost where

asset management goals,

objectives, and metrics are

aligned with business metrics


Benchmarking

Optimized Portfolio


Strategic Sourcing

Supplier Management

Efficient Execution


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Optimized

Performance




The planning and building of an energy company’s assets

is particularly complex. Best-in-class organizations make

fact-based investment decisions, manage approvals

efficiently, execute against their capital investment

programs flawlessly and flexibly, and proactively mitigate

project risks.

As the extent and complexity of capital

programs expands, companies can struggle

with management of their capital portfolios,

often suffering overruns in budget and

timelines. Organizations must utilize portfolio

management to ensure they “do the right thing”

and project management to ensure they “do

things right.” If planning is done effectively,

asset developments remain aligned with the

organization’s goals.

A company typically carries out its business

planning cycle on an annual basis with a rolling

view of the 5- or 10-year horizon. Therefore, the

strategic and financial aspects of investment

projects will typically be selected and defined

long before execution starts. This means the

scope may be sketched and verified based on

empirical values and predefined project types.

During the course of a project, companies must

include improved assumptions and actual data

within the schedules.

Detailed planning is initially concerned with

scheduling and the allocation of resources. As

the program becomes operational, organizations

must integrate data with their enterprise resource

planning (ERP) software. In this way, they spread

transactions across applications for procurement,

maintenance, human resources, and supply

chain management.

Efficient Program Execution

80% Of organizations reported no

portfolio-level roll-up capability

for project schedules or

resources deployed, and

limited integration with

customer and supplier plans


Benchmarking

Optimized Portfolio


Strategic Sourcing

Supplier Management

Efficient Execution


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Optimized

Performance




The supply base is critical to the effective operation of the

organization. To ensure high performance and minimize

risk, companies must identify dependable suppliers and

aggregate data for timely insight. Organizations must

focus on top-priority suppliers, closely monitoring and

continuously improving performance.

Not all suppliers are of equal importance to the

business. Companies must therefore prioritize

them according to volume and criticality.

When registering a new business partner, best-

run companies conduct a qualification process

to assess the partner’s capabilities. Based on

this data, the supplier is evaluated, classified,

and assigned to procurement officers.

Once live, suppliers are tightly integrated into

processes, potentially even taking part in

designing new products and services. Supplier

collaboration is based on seamless integration,

from requisitioning to payment.

Continuous supplier development ensures the

improvement of quality and performance. And

in many companies, a dedicated procurement

officer assesses services and identifies actions

to improve them, such as more stringent quality

processes, modified delivery procedures, and a

change in inventory.

If the business needs to terminate the relation-

ship, a phase-out process is instigated. Based

on specific performance indicators, performance

is continuously tracked.

End-to-End Supplier Management

30% Higher average annual

savings for oil and gas

companies, where software

aggregates purchase across

business units for accurate

global analysis of supplier

spend data


Benchmarking

Optimized Portfolio


Strategic Sourcing

Supplier Management

Efficient Execution


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Optimized

Performance




Identifying the best sources of supply and managing the

process of setting up live contracts is key for today’s

energy companies. Once in place, the lifecycle of

contracts must be managed, with companies monitoring

performance and compliance.

Oil and gas companies must set up contracts in

accordance with the organization’s existing

legal framework. Automated rules and checks

support the creation process, which may

require several iterations and negotiation steps.

After release and approval, the organization

holds the contract in a repository. Terms and

conditions are then transferred onto the

company’s ERP application for use during

further transactions.

Centralized contracts are distributed to local

software systems. Meanwhile, the consumption

and conformity of orders is constantly checked

and monitored.

To further automate the process, scheduling

agreements and call-offs simplify transactions.

They also enable the exchange of extensive

procurement data, such as precise production

requirements.

Oil and gas organizations may then add tactical

elements such as step-ladder pricing, discounts,

and payment terms. This can spur performance

and reduce costs.

Advantage Through Procurement

22% Higher direct spend managed

strategically in North America

and EMEA-based organiza-

tions that have the ability to

monitor supplier compliance

with contract terms


Benchmarking

Optimized Portfolio


Strategic Sourcing

Supplier Management

Efficient Execution


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Optimized

Performance




Managing a large volume of suppliers can lead to high

costs for each transaction. Sporadic and low-value

procurement must be automated with a low degree of

interaction from procurement officers. This reduces costs

and helps companies to avoid failures and rework.

Large organizations can often suffer from

maverick spend, where expenditure is not

correctly authorized. Maverick spend can lead

to increased cost and increased business risk

if, for example, procurement is outside of

agreed contract terms or breaks procurement

rules. Automating procurement of indirect

materials, such as office supplies, often starts

with the usage of e-catalogs in which products

and services are displayed.

Rules, workflows, and access rights determine

the process so that end users can conduct self-

service procurement on the basis of

approved products. Shopping-cart functionality

follows workflow rules and eventually sends a

purchase order to the supplier.

Tight integration supports instant processing

of further steps, such as notifications, invoices,

and payments. In this way, documents are

clearly identified and error-handling is avoided.

Cloud-based solutions offer much more and

cover the whole process from sourcing,

contracting, and purchasing to invoicing.

Network-Based Collaborative Commerce

77% Lower maverick spend for oil

and gas organizations that

can accurately measure both

direct and indirect spend

using a single repository of

data


Benchmarking

Optimized Portfolio


Strategic Sourcing

Supplier Management

Efficient Execution


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Optimized

Performance




Capital and Spend Effectiveness Value Map

SAP solutions address key requirements for capital and spend effectiveness.

Strategy Management

SAP Solutions

Procurement Collaboration

Supplier Discovery

Building Assets Capital Planning

Developing and

Translating

Strategy

Profitability and

Cost Analysis

Planning,

Budgeting, and

Forecasting

Monitoring and

Reporting

Planning, Building,

and Commissioning

Assets

Capital Portfolio

Management

Capital Project

Management

Project

Financials

Asset

Information

Creation and

Governance

Strategic Sourcing

and Supplier

Management

Spend Analysis Contract

Management Sourcing

Supplier

Information and

Performance

Management

Supplier

Discovery

Procure to Pay and

Business Network

Plan-Driven

Procurement

Procurement

Catalog and

Content

Management

Services

Procurement

Purchase Order

Collaboration

Invoice

Collaboration

Business

Process

Document

Management

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Performance



Capital Planning

Align investment portfolios with strategy.

SAP solutions enable oil and gas organizations to formulate and

achieve their strategic vision while balancing business risk. The

software allows them to drive future improvements in performance

proactively. It also enables companies to benefit from a structured

translation of business objectives into financial and operational

targets.

14% Less time to forecast, where

organizations rely on up-to-

date insight from multiple

functions and regions


Benchmarking

Developing and

Translating

Strategy

This software supports the development and translation of strategies and helps

executives cascade a strategy throughout the organization using a scorecard approach.

Planning,

Budgeting, and

Forecasting

This software helps planners automate manual processes, model what-if scenarios, and

make decisions based on cross-functional historical data to quickly identify and

capitalize on growth opportunities and take action to reduce risk and improve accuracy.

Profitability and

Cost Analysis

Complete, accurate information on profitability of products, customers, and channels

helps managers find optimal means to increase overall profitability and operational

efficiency.

Monitoring and

Reporting

Analytic functionality in SAP software provides real-time access to financial data,

eliminating information latencies that can dull competitive edge.

Strategy Management

SAP Solutions


Supplier Discovery

Building Assets

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Performance




Planning, Building, and Commissioning Assets

Enable long-term project planning and execution of

portfolios.

Define and monitor project portfolios and execute according to

budget and timelines with tight integration to ERP software. Respond

to changes in project scope and lifecycle, track communication and

documents, and integrate all business partners.

17% Higher return on assets with

integration of inventory

management, purchasing,

engineering, and finance

software


Benchmarking

Capital Portfolio

Management

The software facilitates financial and capacity planning and includes decision-

making support and functionality to monitor portfolios. It helps align projects with

portfolio strategy, reduce the risk of failure, and increase portfolio effectiveness.

Capital Project

Management

By supporting centralized project planning, management, and accounting, this

software enhances visibility into planned and actual costs and commitments for all

projects in the portfolio.

Project Financials With this software, personnel can compare planned and actual costs in detail,

manage rate cards and billing plans, and perform financial closings.

Asset Information

Creation and

Governance

The software provides the means to collect, prepare, and approve asset master data

to accelerate asset deployment, which helps prevent costly start-up delays.

Business Process

Document

Management

Companies can systematically manage business content and connect it to business

processes with content that is simple to find, govern, use, and share.

Strategy Management

SAP Solutions


Supplier Discovery

Building Assets

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Optimized

Performance




Strategic Sourcing and Supplier Management

Discover, onboard, and manage suppliers for

maximum value.

Solutions from SAP and Ariba, an SAP company, help you discover

new suppliers to meet business needs and then onboard them by

creating rich profiles and transactional information. They also enrich

relationships over time by supporting performance and risk

management.

99% Higher average annual

savings in services procure-

ment with a formal process to

collect supplier responses for

new and renegotiated buys


Benchmarking

Spend Analysis SAP software helps procurement experts aggregate disparate spend data, analyze it

for new insights, and share new intelligence.

Sourcing Companies get help reducing cycle times and improving process control, which

generates sustainable savings and creates lasting business value.

Contract

Management

Companies get visibility into the full contract lifecycle though a central contract

repository. Users gain control over contract authoring and access to information to

support negotiation processes.

Supplier Information

and Performance

Management

Companies can quickly identify and assess new sources of supply, rapidly onboard

approved suppliers, and gain a 360-degree view of supplier information.

Supplier Discovery The software matches business buyers and suppliers globally, helping to align

needs with capabilities.

Strategy Management

SAP Solutions


Supplier Discovery

Building Assets

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Performance




Procure to Pay and Business Network

Automate procurement and collaboration.

Solutions for procurement and order collaboration from SAP and

Ariba enable sound purchasing processes for spend categories,

intuitive self-service procurement with robust catalog content

management, and efficient order transmission and collaboration over

Ariba Network.

48% Of firms foresee a need for

predictive modeling and

complex optimization


Benchmarking

Plan-Driven

Procurement SAP software standardizes and automates the complete procure-to-pay process,

from daily requisitions and spot sourcing to purchase order and payment.

Services

Procurement

The software standardizes and automates the complete service procurement

process for all organizations responsible for plant maintenance and asset

operations.

Procurement

Catalog and

Content

Management

Procurement organizations can promote catalog-based requisitioning to limit

maverick buying by end users.

Purchase Order

Collaboration

End-to-end collaboration on order fulfillment includes orders, change orders,

confirmations, cancellations, and advance shipping notices.

Invoice

Collaboration

Automated data extraction and controls streamline the invoice management

process, eliminating data entry errors and duplicate invoices.

Strategy Management

SAP Solutions


Supplier Discovery

Building Assets

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Optimized

Performance




The global oil and gas market is increasingly challenged

by changes in supply and demand. Insecure resource

availability and changing demand patterns prompt a need

for better planning and insight. New technologies are key

to delivering the competitive edge needed for performance

excellence.

SAP Innovations

Applications

Companies need applications that integrate data and transactions in order to get real-time

information and provide it to all their business units.

SAP HANA

Businesses generate increasing data volumes, and managers seek better and faster insights.

Handling Big Data effectively is now essential.

Mobile

The static workplace is made redundant by enterprise mobility. Mobile applications enable staff to

work from anywhere with access to all information needed.

Analytics

Extracting the right information from millions of data sets using analytics solutions enables

organizations to know more and react faster.

Cloud

The freedom to choose the infrastructure you want – either in-house or in the cloud – generates

exciting new business opportunities.

24% Higher operating margins

where enterprise mobility is

embedded in all business

processes


Benchmarking

Applications

SAP Innovations

The SAP HANA Platform

Mobile

Analytics

Cloud

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Optimized

Performance




SAP Business Suite powered by SAP HANA

SAP Business Suite software powered by the SAP HANA

platform encompasses all integrated processes in project

management and operational and strategic procurement.

Companies seek the seamless integration of data and

transactions to provide real-time information to all

business units involved.

76% Higher operating margin

where financial software

provides historical and

forward-looking views into

financial and operational

performance


Benchmarking

Capital Project

Management

The ability to constantly react to changes during the course of a project is critical to

completing it successfully. Starting with a project template, activities, networks,

purchasing requisitions, and documents are continuously added and changed with

impact on budgets, timelines, and scope.

Supplier Information

and Performance

Management

With thousands of business relationships to manage, it is critical that companies can

accurately track the performance of suppliers, ensuring that all related transactions

comply with the terms and conditions. Solutions for strategic procurement from SAP

play a key role in enabling this.

Plan-Driven

Procurement

Materials that are stocked and subject to asset accounting must be managed on the

basis of well-defined master data. Parameters regarding procurement strategies,

from stocking decisions to accounting data, are essential to help companies manage

thousands of separate material items.

Applications

SAP Innovations


Mobile

Analytics

Cloud

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Performance





The quality of project management and procurement

depends on the appropriate handling and analysis of

large data volumes. Displaying spend performance in

various ways provides insight and identifies saving

potential. Project optimization relies on simulation

scenarios based on Big Data.

53% Of organizations report a big

gap between the availability of

Big Data and their ability to

analyze it for insights


Benchmarking

Planning, Building,

and Commissioning

Assets

SAP HANA supports a variety of scenarios related to real-time project reporting,

such as planned against actual performance, margins, and evaluation of different

simulations. For projects with thousands of activities and line items, performance

analysis is imperative in order to gain timely insights.

Strategic Sourcing

and Supplier

Management

SAP HANA supports the analysis of key procurement processes. Procurement

managers can analyze key spend figures – by material group, vendor, plant, or

purchasing organization – to gain instant insight into inefficiency and areas with

savings potential.

Applications

SAP Innovations


Mobile

Analytics

Cloud

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Optimized

Performance




Mobile

Instant access to supplier-related data delivers a big

advantage to oil and gas companies when dealing and

negotiating with business partners. Procurement

operations, such as requisitioning, can be supported

anywhere, assuring instant supplies. Time recording for

projects adds significant value.

40% Higher employee productivity

where mobile access is

provided to employees across

all levels


Benchmarking

Planning, Building,

and Commissioning

Assets

During project execution, many different parties have access to applications to

execute a large variety of activities. Time recording based on a mobile application

helps ensure the actuality of data. Requisitions can be posted instantly and

approved right away by the manager or procurement officer.

Strategic Sourcing

and Supplier

Management

Insights into spend and supplier performance delivered on a mobile device are

giving managers a competitive edge and can accelerate business.

Procure To Pay and

Business Network

With catalog items displayed on mobile devices, users can check availability, post

requisitions, and confirm orders.

Applications

SAP Innovations


Mobile

Analytics

Cloud

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Optimized

Performance




Analytics

In the procurement environment, analytics solutions from

SAP highlight any exception situations, which will allow

organizations to take any appropriate remediation actions

necessary. Analytics solutions also enable oil and gas

companies to focus on high-value and high-impact activity.

17% Higher direct spend managed

strategically where regular

spend reviews are conducted

to identify new areas of

contract opportunity


Benchmarking

Supplier

Information and

Performance

Management

Supplier performance is subject to critical assessments and supervision. Analytics

solutions from SAP monitor top-rank suppliers on a continual basis to avoid and

mitigate risk. SAP software provides a view of corporate performance based on

dashboards that aggregate relevant key performance indicators for ready

visualization.

Capital Portfolio

Management

Analytics solutions from SAP provide a holistic view of all projects with key

performance indicators, specific aggregates of performance values, and alerts to

summarize status and indicate required next steps.

Contract

Management

Terms and conditions include quality, price, and delivery accuracy. With SAP

solutions, compliance with contract clauses is reflected in the performance

dashboard. This helps oil and gas companies to avoid penalties.

Applications

SAP Innovations


Mobile

Analytics

Cloud

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Summary


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Optimized

Performance

Content Owner: First box here originally said Performance

Management. Since this is not an i-step on the Value Map, I combined

the text that was included with Performance Management with the text

in the Supplier Information and Performance Management section. OK?




Cloud

Cloud-based solutions from SAP enable oil and gas

companies to avoid time-consuming onboarding and

installation procedures. Instant access to applications on

a global basis accelerates business processes and drives

margin growth. For example, suppliers can upload

product data for requisitioners to access from anywhere.

85% Believe the cloud will have a

major impact on their

organization through

efficiencies, innovation, or

competitive differentiation


Benchmarking

Procurement

Catalog and

Content

Management

Cloud-based data for catalog or contract procurement facilitates indirect

procurement processes. Suppliers can upload product data and edit information

when necessary. Contractual and product information can also be added to catalog

items. Requisitioners can access this information from anywhere and post new

requirements.

Procure to Pay and

Business Network

Orders are routed in real time to suppliers in a cloud-based business network using

electronic data interchange or “flat file” technology as appropriate. Suppliers then

send electronic documents, such as invoices, through the cloud-based network.

Invoice verification can be triggered to finalize the business transaction.

Applications

SAP Innovations


Mobile

Analytics

Cloud

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Optimized

Performance




Best-Run Customers

Nine of the top 10 oil and gas companies in the United States run SAP.

Fifteen of the top 20 global upstream companies run SAP.

Nineteen of the top 20 global downstream companies run SAP.

97% Of the oil and gas companies

listed in the Global Fortune

500 are SAP customers

Source: SAP Market Research

Lukoil

Best-Run Customers

Why SAP?

Surgutneftegas

Executive

Summary


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Optimized

Performance



SAP co-innovates with dozens of leading oil and gas companies in its global

advisory council structure. Through communities and work streams, its member

companies lead co-innovation, definition of best practices, and continuous

incremental enhancements across the SAP solution portfolio.

Customer Co-Innovation

Global Industry Advisory Council

The industry advisory council consists of over 20 of the world’s most successful and influential

energy companies. Chief information officers, together with other business leaders of these top oil

and gas companies, come together to meet physically twice per year and also hold monthly

teleconferences.

This group receives strategic direction and road maps from SAP. It supports many interest-group

communities and discusses business innovation and future technology requirements. Additionally,

members share best practices on how to drive more value from SAP solutions.

Co-Innovation Partners

SAP is working with a number of key systems integrators and complementary solution providers to

drive innovation for operations and the supply chain across the entire oil and gas value chain.

>50% Of the world’s daily oil volume

is managed by members of

the global industry advisory

council using SAP solutions

Source: SAP Market Research

Lukoil

Best-Run Customers

Why SAP?

Surgutneftegas

Executive

Summary


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Optimized

Performance



“The SAP Supplier Relationship Management application helped us optimize our

procurement processes and establish transparency. It also helped us increase our

supplier base and sped up the purchasing process by eliminating paperwork.”

Beltiukov Ivan Vsevolodovich, Director of Procurement and Contracts, LUKOIL

MID-EAST LTD.

Lukoil is one of the world's biggest vertically integrated

companies for production of crude oil and gas and their

refining into petroleum products and petrochemicals. It is a

leader in Russian and international markets in its core

business.

LUKOIL MID-EAST turned successfully to the SAP Supplier Relationship

Management application to manage a large number of operational

routines and procurement processes, as well as a new market of Iraqi

suppliers.

Key Benefits

More transparent, manageable procurement for confidential and

unified processes and supplier-buyer audit trails

Larger supplier database, enabling strategic procurement initiatives by

cutting time spent on smaller purchases

Wider supplier base and equal opportunities, increasing supplier

competition

400% Return on investment within 18 months

120x Reduction in time spent on invoice approvals

20% Fewer mistakes in purchasing documents

Lukoil

Best-Run Customers

Why SAP?

Surgutneftegas

Executive

Summary


Contact Us

Optimized

Performance



“SAP Consulting professionals helped us build a solution that supports our

key business processes with current, consistent master data. This project is

the first step in building our new, service-oriented IT architecture.”

Rinat Gimranov, CIO, Surgutneftegas

Surgutneftegas is one of the Russian oil majors involved in oil

and gas production and exploration, gas processing, power

generation, output and marketing of petroleum products,

petrochemicals, and gas products.

One of the largest oil and gas producers in Russia facilitated its transition

to service-oriented architecture by deploying SAP NetWeaver technology

platform components, enabling the company to improve the quality of

master data, optimize inventory, reduce purchasing costs, and achieve a

dramatic return on investment of 229%.

Key Benefits

Enhanced data governance by deploying transparent, comprehensive,

change-approval processes for master data

Improved quality of master data

Eliminated data attribution conflicts between material procurement and

financial departments

229% Return on investment

10% Reduction in master data maintenance cost

10% Reduction in duplicate material requests

Lukoil

Best-Run Customers

Why SAP?

Surgutneftegas

Executive

Summary


Contact Us

Optimized

Performance



SAP and Ariba solutions empower oil and gas organizations to optimize and

manage spend across the full lifecycle of capital programs and operations. The

solutions offer flexible deployment options using the latest technology innovations.

Why SAP?

Tightly Integrated, Comprehensive Solutions

SAP and Ariba offer the most complete on-premise and cloud-based platforms for capital program

management and its sourcing and procurement. This enables a closed-loop cycle of planning,

optimizing, sourcing, and procurement needed for business success.

Leveraging Key Breakthrough Innovations

Software from SAP and Ariba leverages the industry’s most innovative technologies, combining

solutions for database and technology, mobile, analytics, and cloud-based applications, as well as

the world’s largest trading network. This provides unsurpassed process efficiency at the lowest

possible cost.

Proven Time to Value in Large-Scale Implementations

The world’s leading companies, across every major industry throughout the world, continue to rely

on SAP and Ariba software to help them maximize their return on capital employed.

Lukoil

Best-Run Customers

Why SAP?

Surgutneftegas

Executive

Summary


Contact Us

Optimized

Performance



Benchmark Your Performance

Position your organization for dominance in this new economy with the business performance

benchmarking program from SAP – available free to SAP customers and select prospects.

The SAP benchmarking program has helped more than 3,000 organizations assess their

strengths, uncover areas for improvement, and identify best practices and IT strategies that

generate clear, tangible value – not someday, but today.

Go Live in Weeks

Here’s the fastest way to run your business better: our rapid-deployment solutions. In one

package, you get everything you need to be up and running quickly – including preconfigured

software and implementation services – in just weeks. With a defined scope and predictable

costs, there are no surprises.

Join Your Community of Practices

Every day, SAP Community Network (SCN) changes the way that thousands of SAP users work.

It lets members help one another solve problems, learn, and invent new ways to get things

done – faster. Find out how to connect with people, content, and resources.

Find Out More About How Your Organization Can

Become Best-Run

Visit valuemanagement.sap.com >>

Visit sap.com/solutions/rds >>

Visit scn.sap.com >>

Executive

Summary


Contact Us

Optimized

Performance

https://websmp105.sap-ag.de/solutionpackages

https://valuemanagement.sap.com/

http://www.sap.com/solutions/rds

http://www.sdn.sap.com/irj/scn

Solution Overview


Optimized

Performance

Executive

Summary


Contact Us

For active engagement, visit us at the following:

www.linkedin.com/groups/SAP-Oil-Gas-

4546067?trk=myg_ugrp_ovr

https://twitter.com/sapoilandgas

www.facebook.com/SapOilAndGas?ref=tn_tnmn#!/SapOil

AndGas

http://scn.sap.com/community/oil-and-gas

Oil and Gas

CMP 28927 (14/01)


http://www.linkedin.com/groups/SAP-Oil-Gas-4546067?trk=myg_ugrp_ovr









http://www.facebook.com/SapOilAndGas?ref=tn_tnmn










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Capital and Spend Effectiveness - a248.g.akamai.neta248.g.akamai.net/n/248/420835/fbda860710b5f92861... · The stakes are high, and the competitive landscape is changing. To gain