The Importance of the right Business Systems Strategy

Small and midsize oil and gas operators are central to the industry imperative of exploiting marginal offshore reserves.

Typically lean and efficient businesses, many of these companies are driven by an objective to prolong the lives of fields that have become economically unattractive for bigger operators.  

These companies are no less ambitious for growth than their larger counterparts and inevitably experience similar cost control pressures.  In their drive for optimum cost-efficiency the mid-market oil and gas businesses are taking a more strategic approach to investment in their business systems.

The ERP systems sector that Absoft operates in is witnessing increasing interest from these players, as they realise that a piecemeal approach to their business application portfolio – a characteristic of past IT investment -  may offer short-term gains but limited long term value.

These companies need the same tools as their larger rivals to compete and survive. They have the same complex operational requirements and their IT systems need to be capable of addressing those requirements.

Their licensing arrangements mean they may need to apportion costs quickly and accurately, they may have to work in multiple currencies and languages, and they will almost certainly have complex reporting requirements.

An IT strategy typified by an evolving patchwork of niche products and bespoke systems held together by spreadsheets and some degree of manual processing is not going to support the future growth plans of these companies.

These small and midsize players in the upstream oil and gas market increasingly appreciate that they need an integrated set of industry-specific solutions in financials, supply chain management, asset management and human capital management, which can scale and flex with them as they grow.

By getting their business systems strategies in shape at an early stage these companies will ultimately enhance significantly the central role they can play in prolonging offshore activity.