Eliminate, simplify, standardize and automate processes for greater outcomes.
Long before 2020, the oil and gas industry worked to transform its operations through technological innovation. Once the COVID-19 pandemic struck, digital transformation initiatives accelerated as many everyday activities moved online.
The global economy continues to embrace digitization to support business growth and address productivity, labor, planning and spending challenges. However, it can be difficult to understand which technologies are worth the investment versus those that are more hype than help.
What technologies can help oil and gas organizations, a sector generating approximately $5 trillion in global revenue in 2022, build long-term competitive advantage to succeed and thrive in this rapidly changing world?
According to McKinsey, “Oil and gas company leaders should be clear about the business problems they wish to address and the results they want to achieve with their digitization programs.”
Before diving into technology, they should first consider adopting and implementing process optimization through the methodology ESSA, which stands for eliminate, simplify, standardize and automate. Using the ESSA approach, organizations can set themselves up to reduce unnecessary steps in processes, leading to fewer handoffs and errors, plus a reduction of lead time for vendors and customers.
Repetition Sets the Stage for Implementation
ESSA helps companies deliver a greater business impact and make more informed decisions at lower costs. It removes redundancies and waste.
I learned to live and breathe ESSA during my 20-plus years working for Shell, a well-known global group of energy and petrochemical companies best known for its gasoline stations. The ESSA acronym is a behavior – a mindset shift – the company tried to implement in every task performed.
It was an agenda item I kept repeating to my direct reports, as my manager and the leadership team did with me, and it became part of the culture. Repetition creates habits. I even use ESSA at home when asking my children, “Is that something you really have to do, or can you eliminate that from your activity?”
ESSA is used by my employer, Management Controls, Inc. In doing so, the company, like any organization employing this methodology, improves safety, productivity and costs, among other benefits.
The Four Parts of ESSA
Let me delve into each component of the ESSA approach:
- Eliminate involves removing waste (any non-value-adding activity) in any process. A simple example is a team member asking a co-worker to email another person information about a vendor. Why not just send it in the first place rather than get another person involved? When an additional handoff is necessary, like when one person is bogged down in a project while another colleague has free time, it’s understandable. But often, unnecessary, time-wasting steps bog down processes when it would be more efficient to eliminate them.
- Simplify means streamlining tasks. What steps in a process take too long to execute, and how can they be simplified? This is applicable everywhere throughout business so multiple people don’t need to do the same activity as part of their role. Think about a core process that takes 140 steps to complete, which is not uncommon, particularly in large organizations. Can it be whittled down to 20? Often, processes become overly complicated and grow a life of their own, albeit a time-wasting, expensive one. Simple is best.
- Standardize aims to perform duties the same way between departments, locations, customers, vendors and so on. Consider a large enterprise with 50 locations throughout North America. Does each site have its own processes and, if so, what is the benefit? Standardization supports productivity by eliminating inefficiencies. A systematic, consistent approach works well in everything from equipment maintenance to vendor contracts to quality control.
- Automate is to find opportunities to employ automation tools to optimize the first three – eliminate, simplify and standardize workflows. For example, by using robotic process automation (RPA) software, employees are freed from performing time-consuming, repetitive, manual activities. Instead, they can perform more value-added activities. This eliminates (see how we’ve come full circle?) unnecessary work.
Oil and gas companies should consider all four ESSA components when searching for new technology or updating or replacing outdated tech to improve their business. Regarding the safety, productivity and cost control of their supply chain processes, they must all consider maintenance, planning, scheduling, turnaround, capital projects and more. Being able to standardize these processes, especially around vendor and contractor management, is invaluable.
Advantages of this Transformative Approach
The versatility of the ESSA methodology is that it applies to any company in the oil and gas industry, and outside of it, too. Its benefits include:
- Enhances engagement since it empowers employees to improve how they get their work done.
- Increases efficiency by reallocating employees’ time for value-add work.
- Reduces costs by doing away with waste in processes, which increases profitability.
- Improves safety by having practices in place prioritizing people’s well-being.
Improve Processes With the Help of the Right Technology
Technology can help oil and gas companies implement the ESSA approach to add value. For example, consider traditional, manual contractor management. After contractors perform work, they submit their timesheets for approval. Once the company authorizer signs and returns them, contractors submit their invoices, which are entered into a system and matched with timesheets. When necessary, discrepancies are addressed, and contractors are paid.
But there’s no visibility into daily activity, work progress and associated costs. Without the right technology, it’s hard to accurately reconcile invoices, hours earned, varied contractor rates and contract terms.
A robust contractor spend management platform provides near real-time visibility into on-site and remote labor, removes timesheet and invoice errors, and curbs off-contract spend, such as invoicing for unapproved items. It eliminates, simplifies, standardizes and automates the contractor management process by improving safety (for example, when contractors are using equipment they aren’t trained for), along with productivity and costs.
Just Do It – Repeatedly!
The best way for the oil and gas industry to optimize workflows is to employ the ESSA approach, which can be enhanced with the right technology. It should be used in the C-suite and trickle down throughout the company.
Mistakes will still happen. Things could still fall through the cracks. But not as often when employees, contractors, vendors, and even customers employ the ESSA method. Use it repeatedly and the methodology will stick and improve business outcomes.
Jackie Andre is senior director, Contractor Optimization, at Management Controls. As a highly motivated contracting and procurement professional, Andre values the experience she has gained during her career. With over 23 years of experience in the oil and gas industry, she can help deliver bottom-line impact to the business and companies she works for. Being first and foremost client focused, the energy she brings to all engagements, both internally and externally, helps foster a collaborative working environment where, together, collective goals can be achieved.
Through Management Controls, Inc. (MCi) and the TRACK platform, Andre has seen firsthand how millions of dollars in savings and value can be realized utilizing the functionality and automation the software and process provide. As the senior director of Contractor Optimization with MCi, she leverages 14 years of experience from implementing ~20 sites and optimizing TRACK globally for Shell. The implementation teams were the successful recipients of two separate Vice President Awards which recognized the outcomes achieved by those projects.
Jackie Andre is senior director, Contractor Optimization, at Management Controls. As a highly motivated contracting and procurement professional, Andre values the experience she has gained during her career. With over 23 years of experience in the oil and gas industry, she can help deliver bottom-line impact to the business and companies she works for. Being first and foremost client focused, the energy she brings to all engagements, both internally and externally, helps foster a collaborative working environment where, together, collective goals can be achieved.
Through Management Controls, Inc. (MCi) and the TRACK platform, Andre has seen firsthand how millions of dollars in savings and value can be realized utilizing the functionality and automation the software and process provide. As the senior director of Contractor Optimization with MCi, she leverages 14 years of experience from implementing ~20 sites and optimizing TRACK globally for Shell. The implementation teams were the successful recipients of two separate Vice President Awards which recognized the outcomes achieved by those projects.
Oil and gas operations are commonly found in remote locations far from company headquarters. Now, it's possible to monitor pump operations, collate and analyze seismic data, and track employees around the world from almost anywhere. Whether employees are in the office or in the field, the internet and related applications enable a greater multidirectional flow of information – and control – than ever before.
