Oilfield service companies depend on people, tools and technology to get the job done. On another level, you might say that information is the lifeblood of the industry.
Having worked with oilfield service companies for years, VistaVu CEO Jory Lamb believes that the management of information is a major vulnerability for many firms.
“When we meet with companies, we often see several information systems doing different things, and multiple ways for information to enter the system,” says Lamb. “Typically, there’s manual entry of paper tickets, Excel spreadsheets, a desktop accounting package and maybe a database for parts and equipment.”
As Lamb explains, mismatched - or disparate systems can cost you in a variety of ways.
First, multiple points of data entry increase the chance for human error. Companies run the risk of overpaying suppliers and underbilling clients, damaging their profitability.
Second, without a single repository of information, management will find it harder to make evidence-based decisions and tell credible success stories to prospective clients.
Third, without complete documentation of the company’s activities, it’s ultimately more difficult for owners to execute an exit strategy. For larger companies subject to Sarbanes-Oxley compliance, mismatched systems can create nightmares in terms of auditability and financial controls.
It's for these three reasons that mismatched systems can be so dangerous to your growing Oilfield Services business, and why we've made it #1 of our list of the 10 Deadliest Sins of Oilfield Service Companies.
It’s easy to see why mismatched systems occur. Companies grow step by step, adding new software as business conditions demand, often without an overarching plan. At some point, however, mismatched systems stop saving you time, start costing you money, and even preventing your business from growing. The solution: one system for everything.
“Managers want to run their company by the numbers,” says Lamb, “and to me, the most important number is one. You need to have one point of entry and one repository for information, with information made available to each area of the company as needed. When you have this, billing is more accurate, profitability increases and it’s easier for investors to see the value of the business.”
