Slash OPEX and increase liquidity from your oilfield operation

Many commentators see the downturn in the barrel price as an opportunity to address the long standing problems of high costs and inefficiency in the oilfield industry.

But where are the quick-wins for the oilfield services CEO who has been forced to rapidly reduce headcount and must continue to conserve cash and protect margin?

One option to consider is the rapid adoption of mobile technology to streamline oilfield operations. Paperless operations using mobile applications, barcodes and Radio Frequency Identification (RFID) tags has the ability to transform cash utilization by addressing problems that have plagued the industry for years.

In today’s era of mobile apps, removing paper from field operations will not only increase on-hand cash but also quickly reduce back office costs, increase job profitability and enhance efficiency.

Why invoices are late – and what it means for Days Sales Outstanding

Logistically, the use of paper in areas as complex and multi-faceted as oilfield services has always been problematic.

For example, a major source of invoicing delay in shale lease services is the time taken to process and present accurate invoices, with problems stemming from:

• Late and incomplete paper job tickets
• Errors transcribing and translating job ticket handwriting
• Repeated customer rejection of invoice pack due to errors

Days Sales Outstanding (DSO) of up to 70 days is not uncommon in the oilfield service industry. That’s why advancements in mobile technology are a game-changer as they have made the automation of complex field ticket creation a reality and can reduce DSO by over 40%.

Replacing oilfield paperwork with mobile apps delivers near real-time cost reporting by allowing operations to record crew hours, equipment and inventory on a smartphone, tablet or industrial mobile device.

Instead of the ‘paper chase’ between the Company Man, service provider and customer procurement team, invoicing becomes streamlined and much less susceptible to dispute, given the pusher can digitally obtain work authorization on a day-by-day basis, either in person or via an automated chaser email.

DSO reduction is a major implementation driver for mobile operations and delivers significant cash flow benefits.

If you would like to see an example of how paperless operations can accelerate the invoice cycle, download our free white paper, which uses benchmark industry statistics to build a solid business case.

Download our FREE whitepaper: Oilfield Services – How to build a business case for mobile operations

Significant increase in productivity

With paper-based operations, it is estimated that every twenty field service crews require one equivalent back-office employee to administer and process job tickets.

For that reason alone, companies utilising paperless operations can expect a reduction in back-office administration costs by removing paper processing and increasing productivity. Typically, the latter can increase by at least 50%. One of our customers has achieved same-day cost reporting for over 90% of service jobs and reduced the back-office staffing levels from 30 to 3.

Watertight invoicing becomes simple, negating the need for complex disputes around areas that may deviate quite substantially from the initial remit or quote. In the end, it’s about minimizing leakage, maximizing profit.

Stop bleeding revenue through under reporting

A significant drag on job profitability is the under reporting of crew hours, equipment rental and materials used, often due to bad practice, poor handwriting or transcription errors.

Replacing paper with mobile apps delivers a simple, standardized data capture process that enforces best practice, is scalable and much easier to measure. The operations team will be able to track actual vs expected equipment and inventory utilization on a per job basis.

Join our FREE webinar: How to increase job profitability and slash Days Sales Outstanding (DSO) – A demonstration

Rapid implementation

In the current climate, it’s understandable that fear, uncertainty and doubt may provide hurdles for organizational change. While the financial benefits are rarely doubted, often one of the biggest concerns about the switch to paperless operations is the length of time implementation will take. After all, industrial change can be laborious and oil and gas environments have relied on paper since their beginnings.

Yet, results like the aforementioned reduction in DSO can be achieved much quicker than many people think. Spartan Solutions has rolled out their PHALANX mobile solution in less than 30 days.

It’s a seamless process that will ensure your business plugs the gaps that have been leaking money and help foster a culture of zero error, zero delay and immediate cost reduction.