The Oil & Gas industry is arguably the most vital industry to the world’s economy. Companies within the sector have to navigate through the economic risks of the global economy as they invest in new reserves and continue to operate large, complex plants and equipment. Workplace safety and health and regulatory compliance have always been key issues to manage. But now, climate change and energy policy, ecosystem protection, and respect for human rights issues are at the forefront of discussions. Stakeholders lump their concerns under the general topic of “sustainability” or “corporate social responsibility (CSR),” and are demanding that companies report their progress toward resolving these critical issues.
One of the challenges of sustainability reporting is the measurement, management and reporting of the key indicators, and—taking this a step further—finding ways to efficiently and responsibly report this information while incorporating results into everyday business decision making. Establishing key indicators for each environmental issue is an important first step. These can be ranked by interest to stakeholders, or materiality—indicators that reflect significant economic, environmental and social impacts, or that would substantively influence the assessments and decisions of stakeholders.
Once the key indicators are identified the next step is to collect data on a regular basis. The easiest way to accomplish this is with an Environmental ERP (EERP) software solution that is delivered on demand over the Internet. This approach offers the most advanced, yet cost-effective way to measure, manage and report highly-distributed complex, sustainability key indicators across an enterprise. A centrally located EERP system can not only store and report on the data, it can normalize and aggregate the data by Upstream, Downstream (Refining, Marketing), Pipelines, Marine and Services.
The Case for a Cloud Solution
The cloud element allows for EERP software to be delivered as a service without any need for hardware and software beyond a modest personal computer. As compared to traditional on-premise, installed software, the cloud option requires fewer resources to operate, increases efficiency by automating many processes, and reduces IT costs across the board. Furthermore, Web services make it easy to safely share data between cloud computing applications and legacy, mission critical on-premise systems. An organization’s sustainability and financial information is now readily available from a centralized relational database system, and all it takes to access is an Internet browser.
Rapid Deployment
Traditional on-premise ERP and EMIS software systems often require lengthy, complicated and resource-intensive deployments. Web-based cloud computing EERP software means a quicker and easier deployment, helping companies meet difficult reporting deadlines in a shorter time span. Because maintenance, security and upgrades are all responsibilities of the service provider (and not the organization,) oil & gas companies can spend less time and have fewer resources dedicated to performing system administration, maintenance or support, and focus their attention on core business functions. Most importantly, secure, anywhere and anytime access via the Internet allows company personnel to access their data and information from corporate offices, production facilities, remote offices, airports, coffee shops, etc., and have a real-time view of their environmental impact.
Multitenant vs. Single Tenant
Cloud computing software is architected to be multitenant and multitenant architecture allows many customers to operate from a single software instance. This delivers a higher economy of scale over traditional single tenant software (where every customer operates from its own separate and distinct software instance,) because it combines IT infrastructure and application software into a single, yet highly secure operating environment. The true cost savings are recognized by purchasing access to the amount of that single software instance your company uses; an organization does not pay all the software and hardware costs for the entire system. Furthermore, cloud-computing systems eliminate the need to purchase or install application software, operating systems, databases and servers upfront. This dramatically reduces the deployment costs of a cloud computing solution and reduces the time to value for an organization.
As mentioned earlier, cloud computing providers are responsible for upgrading their software, so customers always have access to the latest technology and richest features without having to employ personnel to continuously re-install upgrades or install new modules. This on-demand approach refocuses an organization’s time on the measurement, management and reporting of sustainability and financial data, not the procurement and deployment of new or upgraded software.
Secure
Cloud often faces opposition because of a belief that storing sensitive data off-site presents a significant security risk. The fact is, top-of-the-line EERP solutions take the necessary actions to eliminate these concerns. Here are some elements an organization should be sure their solution of choice utilizes to protect its customer’s data:
• Stringent physical access controls at co-location facilities using state of the art technology like biometric scanners;
• Redundant power sources with backup generators capable of indefinite operation and redundant Internet connectivity to maximize network availability and provide complete fault-tolerant network infrastructure with the goal of 24/7 system uptime;
• Encrypted communications to ensure safety of data and information during transit;
• Regular testing of system vulnerabilities to identify potential breaches before they occur;
• Built-in virus scanners to scan active content that is uploaded to the system;
• User access and authentication via unique username and password with configurable password policies for each user;
• A comprehensive disaster recovery plan.
Scalable and Extensible
The goal of any organization is to grow, and as it continues to expand so too does its sustainability management needs. Likewise, its EERP software needs to grow along with the company. The cloud-computing model enables service providers to rapidly offer more computing power and functionality without increasing the burden on the organization’s IT staff. Service providers are able to add new or upgraded servers, storage, operating systems, security patches, etc. on the back-end with no effort from the organization. As the company expands, the cloud EERP solution is flexible enough to expand along with it, providing as much new functionality, storage and computing power as necessary.
The Nature of Reporting
It’s important that your environmental reporting be relevant, transparent, consistent, complete, and most importantly—accurate.
The reported information should appropriately reflect the sustainability issues facing the company and meet the needs of its stakeholders—both internally and externally. The information should be reported in a clear, understandable, factual and coherent manner, and should undergo independent review. A truly transparent organization includes disclosure of the processes, procedures, assumptions and limitations affecting its report preparation. For the reports to be considered credible, information-gathering processes and definitions must be systematically applied. Consistency in what is reported and how it is reported enables meaningful review of a company’s performance over time, and facilitates comparison internally and with peer companies. The information reported should be included in a manner that is consistent with the stated purpose, scope and boundaries of the report. Lastly, information should be sufficiently precise to enable intended users to understand the relevance of data with a suitable level of confidence.
Conclusion
The unique nature of cloud-computing technology enables greater understanding of data as part of a broader context. EERP solutions offer the Oil & Gas industry peer-to-peer comparisons and the ability to compare across Upstream, Downstream, Pipeline, Marine and Service. For example, available cloud computing solutions can create an index factored by revenue, number of employees, production output or any other operational or financial variable necessary to enable the organization to understand its global performance and find ways to improve its bottom line while decreasing its impact on the environment.
For any Oil & Gas organization looking to implement a cost-effective, scalable, easy-to-use and secure system to handle its environmental ERP needs, those built on a cloud-based platform should be the first considered.
About the Author
Doug Hatler joined Enviance with over 15 years of environmental management and technology experience.
As Vice President of Operational Excellence, Doug’s focus is on delivering higher value to customers through more effective teamwork and collaboration, optimizing business processes, and leveraging technology that continuously measures, manages, and reports progress.
Prior to joining Enviance, Inc., Doug served as Customer Program Manager at Intel Corporation where he managed multimillion dollar go-to-market programs with ISV’s and VAR’s. He served as Program Manager for Implementation Services and a Sales Executive at a competitive EH&S software firm where early in his tenure he led the implementation of one of the first enterprise EMIS deployments for Union Carbide Corporation (now Dow Chemical). Prior to his engagements with technology companies, Doug worked as an environmental engineer and corporate environmental regulatory specialist with Roche Pharmaceuticals. Earlier in his career, he worked as a consultant and project manager for Geraghty & Miller, Inc. (now ARCADIS).
Doug received an Executive MBA from the Rutgers Business School. He also holds a Bachelor of Science in Environmental Science and a Master of Science in Environmental Engineering. He is a published industry expert, college instructor, and featured speaker on environmental management.
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