At the ASUG Best Practices: SAP for Oil, Gas, and Energy conference last month, Mathew Abraham, IT finance manager at Schlumberger gave a presentation about how the oil and gas company used RPA with SAP to improve its financial hub. ASUG recently caught up with Abraham to dive further into the work he did on this project.
ASUG: Why don’t you start by telling us about Schlumberger and the customers that you all serve?
Mathew: Schlumberger is an oil and gas service company. We are the world's leading provider of technology for reservoir characterization, drilling, production, and processing to the oil and gas industry delivered by a team consisting of 140 nationalities working in more than 85 countries. We service the big oil and gas companies like Chevron, BP, and Shell. We help these companies explore, dig and service wells, and extract the oil. We assist with everything from oil exploration, upstream and downstream processes. We do end-to-end project management of an oil and gas industry life process. While it is predominantly a service company, it's also heavily focused on the manufacturing side as well.
ASUG: I'd love to know a little bit about Schlumberger's current IT landscape, specifically as it relates to the financial side of things.
Mathew: Schlumberger uses best-of-breed applications and business systems. But our core enterprise system is of course SAP and we have different versions of SAP, including SAP ECC 6 and SAP S/4HANA. As I said, Schlumberger has many business lines and product lines across different countries. Currently, not all of this is maintained or managed to one enterprise ERP system, but we are currently transforming fully to manage and transact our business in one ERP SAP instance. With the core ERP as SAP, all other peripheral business front-end applications collect data and transact to SAP. Another critical area of focus is data analytics where we use a lot of reporting platforms include SAP Business Analytics on SAP HANA.
ASUG: Broadly speaking what are some of the main financial challenges that the oil and gas industry is facing right now?
Mathew: One of the biggest challenges is around data and analytics. From a financial point of view, financial analytics is something that is growing. Your transactional volume and the needs of the business are growing day by day. If you give users raw data, they want to slice and dice that data into different dimensions and come out with different analytical reports that will help them in a lot of these strategic decisions.
But I think one of the biggest challenges that we normally see in a financial hub is meeting a lot of these management reporting needs, especially the ones that are highly time-sensitive. A great example is tasks that have an SLA (service level agreement) and need to be done within a specific time. But with all these analytics, processes, and functions working together and churning all this data, it often becomes a challenge to deliver accurate reporting on time. Normally, when this happens, you tend to add more human resources to facilitate such tasks. That's where you see a lot of repetitive tasks, especially in a company as large as Schlumberger. We need to think about how we can effectively, quickly, and accurately provide data insights to the business.
ASUG: Schlumberger has been going through some consolidation efforts. Can you tell us a little bit about those efforts and why you all decided to take that route?
Mathew Abraham: The old way of working had all these activities localized. You would have a cost accountant sitting in Brazil and another one in Houston. You would have billing in various countries around the globe. You would see them doing the same set of tasks in a very decentralized fashion. This will eventually lead to a lot of reconciliation issues. There are time zone differences. Your deliverables might not be ready. This process must be done by region.
There's a lot of nuances that come along generally whenever you see a decentralized approach. There are specific things that are very, very country-specific, where it makes sense to have that function sitting in that country. But what Schlumberger has done is consolidate our hubs in certain strategic locations. This means we have 300 to 400 people sitting in a hub servicing all these countries and across various functions. This could be our HR, legal, finance, or billing functions. All these functions are now centralized and consolidated at Schlumberger.
ASUG: Let's talk a little bit about RPA with SAP, which you all used. Can you tell me a little bit about how you all decided to use this solution and how it helped streamline the work you all were doing and this particular project?
Mathew: Yes. The first step was we wanted to identify the pain areas. We had multiple sessions with the business to understand the processes being done today in the hubs. What are those processes? What were the high-volume tasks? What were the tasks that were critical that had to be done within a specific time or a period that were repetitive? Normally when you go to these kinds of iterations, you naturally reduce 30 to 40% of the scope. The first phase of our effort was to identify the scope. As easy as it sounds, over the last two years, we have been observing very closely to develop guidance and best practices to engage for an RPA project. At the time when we embarked on such initiatives, we did not have off-the-shelf, guided principles and practices to approach such automation needs. Eventually, through multiple trials and lessons learned, we documented and developed a very robust process to identify and facilitate RPA automation—especially around financial processes.
One of the approaches that people tried to do is pick up a solution and find the problems that this particular solution can remedy. It should be the other way around: you first find your scope of work, understand the pain points, and then you look at whatever solutions that you have.
Automation was our last option. We wanted to ensure that we leveraged whatever SAP provided us. We then looked into automation and there are different products in the market. We wanted a product that met our security guidelines, policies, and audit controls. Our decision was purely based on that. Now another company and other industry could have an entirely different need, but there are multiple products available in the market today that does RPA. It depends on what you're looking for.
On the Schlumberger side, when we were automating, we wanted an RPA solution that would not just automate the SAP side of things, but also do the end-to-end desktop automation along with SAP. It was a full end-to-end automation.
ASUG: What sort of advice would you have for other SAP customers who are considering doing a project like this?
Mathew: It's a learning process. If you see the whole journey, most of the time the initial time is spent on understanding your current as-is business processes. If you go with automation, typically business users will ask to automate three or four items they want to see automated. That is often not the right approach, because when you're automating a process, you first need to understand that you are not automating a bad process. Your main goals should be to understand what has been done, understand the pain areas, and try to resolve the root cause of the pain area. If you automate that process, you are automating a bad process. When you do these scoping sessions, they will give you an insight into the root cause analysis that needs to be done. Then the last step, as I said, is automating it. That includes spending time with your users, your hubs, your functions, along with understanding the pain points are vital.
Typically, as I said, you would see a 30% to 40% reduction from where you started to where you will end up, in terms of automation scope. People normally think bots are here to replace humans. There will be operational cost efficiencies that will naturally be shown across the processes. But that's not the intention. If you're telling your users that you are here to replace what they’re doing, you've lost the battle. I think it is very important to educate your users and let them know that you're doing this to ensure you reduce your non-productive time. We can utilize the resources in more efficient value-added tasks.
Building automation is not just an IT job. It is a total collaboration with the business and IT. I know companies that have established digital cells in all of their strategic locations and hubs. That's because you need a heavy collaboration. You need to be in the middle of things to understand the pain points. It’s absolutely worth it to set up a dedicated continuous improvement team
Last but not least, always look out for three things when you are trying to automate. The first is to look out for high-volume tasks that take a lot of personnel hours to execute. Second, tasks should be SLA-critical, time-sensitive tasks. It should be rule-based. If you look at a task, you should be able to clearly sequence them in steps. Finally, the task must be repetitive. If you're automating a task that is done once a year, you might as well not do it.