The oil and gas industry is under increasingly more pressure to control spend. For an industry with such extreme peaks and valleys and so much of spend, personnel, and HSE risk out of companies’ direct control, it’s crucial to find a balance that maximizes the value of the highs while withstanding even the worst lows.
Factoring in the additional challenges – the ever-fluctuating supply and demand for crude oil, onshore and offshore storage location management, changing oil production levels, and the ever-so-quickly approaching goal of net zero by 2050 – is leaving companies facing immense pressure to respond on all fronts.
As initiatives are laid out to innovate in the area of decarbonization, as companies are sorting out their future employee needs and skillsets, a long-present blind spot is growing larger and larger: lack of visibility into spend. Even simple questions are difficult to find answers to:
- How much did we spend in a specific category over the last year?
- How much did we spend on a specific supplier in the last quarter?
- How much do we anticipate spending on contractors in the next year?
It can take hours to sift through disparate systems and paperwork to find these answers when, in an optimized and efficient operation, they shouldn’t even need to be asked. All stakeholders, decision-makers, and leaders should have succinct, pertinent reports to always remain data informed.
One of the best, scalable, and efficient solutions is to implement a Business Spend Management (BSM) software, which can have these answers instantaneously and, more importantly, provides much more than a channel to eliminate spend – it can increase compliance and reduce risk, discover funds that can be allocated for innovation and futureproofing, and it can be a significant step in reaching operational efficiency.
3 Reasons Why Business Spend Management Software is Non-Negotiable
1. Supplier risk is high – compliance needs to be baked into your process.
Taking the time to vet suppliers and understand potential risks will help execute in the constantly fluctuating market and industry. With complex operating equipment coupled with high temperatures and high pressures, there is no room to partner with suppliers who don’t comply with rules and regulations religiously.
Not to mention, those sorts of financial mistakes are difficult to recover from.
Safety is critical and highly dependent on the suppliers that your company chooses to work with. Strategically sourcing quality suppliers requires being able to monitor and derive insights from current and potential suppliers. The same attention to detail dedicated to clients on the sales side of organizations needs to be mimicked on the supplier side, which can be accomplished with the right business spend management software.
2. Environmental impact is a large investment.
There has never been a time where environmental, social, and governance (ESG) factors have carried a higher weight in the oil and gas industry.
Although the demand for energy sources will only continue to increase as our modern living progresses, producers of oil and gas are put under enormous pressure to meet this demand while simultaneously reducing CO2 emissions. Companies are having to spend more money on initiatives that include alternative energy sources, deployment of new assets, and decarbonization of existing assets.
Understanding and analyzing in-house existing spend to find areas to reallocate is the only way companies will be able to invest in ESG initiatives and technology while retaining the kind of profitability they’re accustomed to.
3. Digital transformation is the next big step for the industry.
Let’s face it, oil and gas has been operating on paper notepads and legacy systems for far too long. Reporting through disparate systems has given us all difficulties when we’re asked to come up with metrics or track progress on financials. Trying to quantify how much we’ve spent with suppliers can take hours of sifting through documents in folders to get a simple number.
The demand for complex reporting has become increasingly detailed and managers want to continue to dig into the numbers as they are squeezed for more savings. Having a consolidated spend management system makes it possible to report on where all spending is taking place, as well as being able to guide users on preferred vendors to buy from.
Spaulding Ridge is Your Business Spend Management Software Solution.
With so many asks coming from different directions, leveraging business spend management software to gain visibility into spend is the most viable path forward.
More than ever, companies in the oil and gas industry need real-time view into spend, providing leadership with the intelligence they need to make informed decisions that benefit the transforming state of the business on the road to long-term resiliency.
Coupa, a business spend management tool, is a business spend management software that allows for greater visibility into spend management categories and smoother supplier management. By incorporating all aspects of the source-to-pay cycle in Coupa, companies are enabled to make business decisions that help gain control of spend and provide more room to be innovative and resourceful with future initiatives in the industry.
Spaulding Ridge is a Coupa implementation partner with vast experience in the oil and gas industry and are the go-to partner for your business spend management software needs. We’ve partnered with clients that operate upstream, midstream, and downstream to prepare for challenges across the board.
Gain visibility into your business spend today to better prepare for the future.
Contact Nicole Moss to start your digital transformation journey today.
Senior Associate, Coupa, Spaulding Ridge
About the Author
Nicole Moss is a Senior Associate in Spaulding Ridge’s Coupa practice. She is Coupa Platform Certified in Coupa Supplier Information, Coupa Pay and Coupa Expense.