Business Process Improvement - Can it help your Oil & Gas company?

The current economic climate is challenging for all industries, for the Oil & Gas industry, the oil price on top of the Covid-19 pandemic has seen companies put projects on hold and commence consultation processes.

Oil & Gas companies find themselves continually reinventing the way in which they operate to manage and mitigate the commodity price volatility, increased technological innovation, and regulatory uncertainty.

Process improvement can deliver short term quick wins and long terms strategic changes to the way in which they operate. This can be in the form of a full restructure of resources or a restructure of a business line to streamlining end to end process to reduce waste.

An example may be ensuring that the controls around procurement ensure that you have full visibility and control over who is committing to spending your company’s money.

Often overlooked this fragmented process can be riddled with poor controls, from the Delegation of Authority which sits with Finance, the operational requirement, the project team’s needs and the procurement department’s control over the delivery of goods and services. Such a process which spans many departments can result in time, cost and energy waste.

Each element when viewed in isolation may seemingly work, and result in control owners saying “It has always been done this way”, however mapped end to end with all of the contributing processes, may identify areas of weakness and poor control which leaves your company open to fraud and financial waste.

Another example would be a company which has merged or acquired another, or many others due to the continual changes in the market. Often in these cases, the individual companies remain operating in the same way as they did prior to the M&A activity, which results in duplicate finance systems, procurement systems, risk systems and project management systems. It leads to difficulties in pulling together the month end financial reporting, which may be performed in several systems, using different methodologies resulting in incomplete or inaccurate consolidated reporting.  Not least working this way leads to increased costs for the licences and maintenance of the systems, duplicate staff increasing the overhead costs and inconsistent ways of working.

Taking time at the start of the merger process to identify these duplications and apply a business process improvement approach, reduces waste.

If you are interested in finding out more about Audit ink’s Business Process Improvement services and how it can help your organisation, please get in touch kara.griffiths@auditink.com.