Top Challenges Facing The Oil & Gas Industry And How To Conquer Them

Lisa Jacobsen

It’s hard to imagine an industry with greater complexity – or greater demands – than the oil and gas industry.

As dwindling reserves force companies to operate in remote and even possible hostile environments, the high cost and difficulty of extracting energy is steadily increasing.oil and gas

Massive capital investments are required.  Portfolios are weighed down by projects that aren’t optimized.  And incredibly complex supply chains make it extremely difficult to deliver projects on time and within budget.  In fact, a recent study by Booz Allen Hamilton showed that 40 percent of new capital projects experience cost or schedule overruns.

Compounding the problem is a lack of operational insight caused by siloed data from disparate sources, legacy software systems, and a lack of standardization.  Without an accurate, 360-degree view in real time, it’s hard to know which fires to put out first.

Price and demand volatility squeeze margins.  The emergence of alternative energy sources is negating old assumptions, and competition for scarce human capital is fierce.

The inclusion of third-party vendors is making supply chains even more complex – and consequently, more vulnerable to risk – at a time when governmental regulation is increasingly burdensome.

Clearly, challenging times for the oil and gas industry have emerged.  But for companies that leverage innovative technology to maximize investments, lower costs, and mitigate risk, the opportunities are endless.

Running simple starts with closed-loop management

To meet the world’s energy demands, capital spend growth will exceed $19 trillion dollars over the next 20 years.  Without sufficient depth, accuracy, and transparency, many of those investments will underperform.

Leading-edge technology such as in-memory computing, analytics software, mobile solutions, and the cloud, can help oil and gas companies optimize every asset for maximum return on investment.  By leveraging closed-loop management, companies can gain control of capital and spend to mitigate financial risk, improve asset productivity, and increase annual savings.

Closed-loop management and control of capital spend enables your company to manage the convergence of production, maintenance, engineering, and financials at all enterprise levels, leading to less maintenance and rework.  Define and execute a solid spend strategy and long-term budget plan that leverages the power of an online supplier network to save time, money, and resources.

It’s time for the oil and gas industry to reduce complexity and Run Simple

SAP’s cloud-based Ariba Network streamlines purchasing processes, including self-service procurement, order transmission, and supplier collaboration – and produces savings as much as 30 percent.  Perhaps that’s why more than 800 oil and gas companies worldwide – 85 percent of which are Forbes 2000 – are SAP customers.

Learn more about how the oil and gas industry can Run Simple in 2015.


Lisa Jacobsen

About Lisa Jacobsen

Lisa Jacobsen is an Industry Marketing Director at SAP. Her specialties include CRM, strategic partnerships, product management, marketing, and go-to-marketing strategy.

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Simplicity , NA , Awareness