This major Oil and Gas producing company in the Gulf went through an implementation experience of EIS system in 2005. The EIS Implementation involved the replacement of the existing Maintenance, Supply, and Commercial system with a new EIS and an upgrade of the HR and Financial systems to the latest releases. The exercise was prompted by management’s desire to replace the outdated ERP system in order to address shortcomings in functionality, to control the high cost of upgrades and modifications, and to enable implementation of the newly formulated Maintenance Policy. The project was deemed a success, even though it took longer than planned and the results were less than anticipated.
TopSetting The Stage
Operations of the company are centered on the production of oil and gas after exploring and location of deposits in the concession areas. Drilling is the most costly activity in the oil production process, which makes planning an essential activity. Plans for the drilling operations for new and work-over wells are usually developed for a period of five years. The shareholders must review and approve budgets. Production policies are reviewed regularly to keep astride international markets regarding demand volumes and prices.
Extracted oil and gas undergo a number of treatment processes before delivery for export. These processes require sophisticated plants that are operated to a very high standard of safety, health, and environment protection.
To ensure the uninterrupted service of these plants a number of ERP systems were employed in the company. Because of the scale of the plants and facilities it is required that these systems support all business processes and cater for large volumes of data and transactions. These systems cover the areas of maintenance, procurement, and material management, HSE, finance, and HR.
A new performance study was carried out and recommendations for a Performance Driven Organization were published. It was felt by management that the existing ERP systems were incapable of supporting the new ideas, procedures, and policies.
At this stage, the business processes were not up-to-date and require some effort to enhance and improve. Business processes for Finance and HR were in pretty good shape. The Supply and Commercial business processes where well formulated but required some effort to document in full detail. The Maintenance business processes required major revamping because of the introduction of a new Maintenance Policy that was formulated recently by an international consultancy firm. Part of the findings of the study was that the current ERP system could not support the new policy. Another recommendation of the study was to rebuild the equipment and Location hierarchy to be in line with the new policy. Data in the existing ERP system was limited and major effort was required to fill the missing parts to support the new policy and to produce the required management information. In the current system, management could not get clear and correct information on the cost of plant maintenance.
The decision was taken to choose a new EIS system to replace the existing one and to utilize the expertise of an International Implementation Vendor (IIV) to carry out the implementation process under the control of an implementation project formed for this purpose.