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Planning and Forecasting in Oil & Gas

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Oil and Gas companies are facing energy transition with a significant increase in energy demand, but also a shift towards a lower carbon fuel mix. In addition, digitalization is disrupting manifested business models. A new way of business steering and planning is required to cope with these challenges in order to shape a successful strategy for the future.

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Planning and Forecasting in Oil & Gas

  1. 1. Planning and Forecasting in Oil & Gas A BearingPoint Accelerator Oil and Gas companies are facing the energy transition with a significant increase in energy demand, but also a shift towards a lower carbon fuel mix. In addition, digitalization is disrupting manifested business models. A new way of business steering and planning is required to cope with these challenges in order to shape a successful strategy for the future.
  2. 2. Contents Market Drivers Our Approach Client Benefits References Contact Planning and Forecasting in Oil & Gas | A BearingPoint Accelerator
  3. 3. Planning and Forecasting in Oil & Gas | A BearingPoint Accelerator The value chain with all its upstream and downstream activities in the oil and gas industry is complex and versatile. This offers many opportunities to optimize and simplify the business model and operational excellence. The market is currently undergoing substantial change - so it's the perfect time to set up for the future and align B2C, B2B and refining with good practices of the industry! Market Drivers Asset maintenance • Conscious and proactive budgeting of maintenance costs for refining and terminal assets with predictive technology • Planning of turnarounds (forecast accuracy and minimizing impacts) Price / demand & supply volatility • Predictive models to anticipate short and midterm volatility (e.g. crude oil price changes) • Flexible scenario planning for supply and logistic operations Rapid technological advancements • Increase level of harmonization and automatization (e.g. implementation of same system for businesses and controlling) • Focus on content rather than technical boundaries (replacement of Excel solutions) and hence process acceleration Performance improvement • Process efficiency and improved coordination of refining, logistics and sales activities • Precise prediction of performance results by integration of sub-plans (e.g. projects, chances and risks) Cost reduction challenge • Supporting the business in optimizing operational and head-office cost planning to stay competitive (e.g. refining CO2-cost) • Enhanced business steering e.g. ad-hoc and scenario analysis Expansion into new business segments • New business operating models need additional planning dimensions (e.g. e-mobility solutions) • Definition of a standard planning approach across all business areas (e.g. volumes and margin planning) Trends & Challenges and the respective Planning requirements
  4. 4. Planning and Forecasting in Oil & Gas | A BearingPoint Accelerator BearingPoint is offering a solution for a fully integrated business planning environment through its Planning Integration Cycle (PIC). The Cycle is designed to connect operational business planning with financial planning and budgeting across different time horizons, from short-term up to a strategic perspective. • Business planning with volumes and margins and its financial aspects • Operational alignment along the value chain from refining production, logistics to B2C and B2B sales • Free bottom-up forecasting on a monthly basis (e.g. 24 months) Operational and Financial Forecasting Process 1 Projects Demand Refining Supply Planning Integration Cycle • Detailed budgeting • Annual plan including top-down management targets, energy and inflation effects, as well as project planning • 1 year horizon 2 Annual Planning & Budgeting Jan Dec • Focus and financial planning of macro- economic assumptions and industry trends like energy supply and demand, energy split, influence of disrupting technologies as transport electrification and inflation • Long-term planning • 3-10 years horizon 3 Mid-Term and Strategic Planning Definition of a firmwide planning standard with process models System harmonization & tailored tool selection
  5. 5. Planning and Forecasting in Oil & Gas | A BearingPoint Accelerator In several stages, we define a common understanding of the planning terminology across all business and functions with a holistic approach. The planning meetings are designed to have a different focus and level of detail, but will converge information, which reduces effort and inaccurateness and supports alignment. Integration in Finance Organization • Alignment with the existing processes to ensure efficiency and assurance of a consistent database • Use of evolving technologies and solutions from the portfolio Tools • Criteria-based tool selection by involvement of all contributors • Comfortable usage for business and controlling with user experience • Proof of concept/ prototyping and implementation of the planning solution Business Engagement • Development of a collaborational approach that fits for the business (refining, logistics, sales) as well as controlling • Coaching in process and system usage for key users in refining, logistics and sales in the role of multipliers to increase internal acceptance Process Design • Design of an integrated sales, operational and financial process including timelines • Definition of core activities and responsibilities of the planning processes for volumes, margins and financial materialization Definition of a Planning Standard • Definition and development of planning scope, meetings and dimensions • Definition of planning methodology (top-down, bottom-up, middle-up) • Development of information model (e.g. planning on product and station level in B2C) Components of the BearingPoint approach I II III IV V
  6. 6. Planning and Forecasting in Oil & Gas | A BearingPoint Accelerator Individual business needs can be supported by applying the solutions in the BearingPoint portfolio. </> $ Integrated planning with a subsequent focus on controllers as “business partners” with state-of- the-art software solutionsFocus on high value tasks while reducing manual labor Integrate smart and real-time monitoring of oil price developments, volume & margin deliveries and reporting tools Identify, evaluate and document relevant KPIs to enable a value based direction and adjustment of planning lines Using an agile project methodology as a reaction to dynamic and changing business environments Incorporate modern finance strategies into target businesses Predictive & cognitive approaches to enhance and optimize forecasting accuracy while focusing on real performance drivers Software Solution Robotic Process Automation Smart Reporting KPI / Steering Model Agile (Scrum) Finance Strategy Advanced Analytics
  7. 7. Planning and Forecasting in Oil & Gas | A BearingPoint Accelerator Due to the scaling, optimizing and integration of the processes, a continually increasing benefit for the customer is achieved in the long term. Both direct and indirect cost advantages are achieved, as well as an optimization of the processes in planning and forecasting by enabling functionalities as scenario based planning. Cost Efficiency Cost efficiency due to reduced effort in planning and forecasting and through increased accuracy and increased steering capabilities Business Engagement & Satisfaction A holistic planning approach along the value chain ensures stable operations and minimizes disruptions Effort Reduction Reduction of complexity and effort to ensure time saving Integrated Planning Landscape Full integration of all subplans facilitates a target oriented planning process One single Source of Truth Accuracy, consistency and simultaneous processing of planned figures and data ensures an effective and honest workflow Business Partnering Enable business partnering to take over an active role and act as a mediator between controller, business units and management Scenario Based Planning Calculation of scenarios increases steering possibilities and identifies risks, chances and measures to mitigate threats Elimination of Excel Plan Books Reduction of vertical and horizontal coordination cycles to increase time efficiency
  8. 8. Planning and Forecasting in Oil & Gas | A BearingPoint Accelerator References Our client is a multinational oil and gas company with a fully-integrated value chain consisting of upstream as well as downstream activities. BearingPoint was hired to support a forward looking planning & data project for downstream. Challenges • Planning processes executed in Excel with very little support from enterprise systems • Marginal interaction and no streamlining of planning processes • No clear definition and scoping for existing planning and forecasting situations regarding contents (volumes, margin and financials ) and subplans (e.g. demand and project planning) • Lack of data transparency, clear accountability across units and process efficiency • No standardized process throughout the different businesses Approach • Analysis of planning processes and contents to understand complexity and unveil potential areas for automation and integration of planning dimensions (high level design concept) • Design of an integrated planning process for all downstream businesses in B2C, B2B and supply and logistics (business blueprint) • Development of a technical prototype to show benefits and technical possibilities of the selected tool for a fit/gap analysis • Definition of a module based implementation approach • Agile approach for implementation, with continuous improvement and close collaboration of business and IT resources • Definition of communication plans and change management measures Results • Integration of all planning sessions due to an information enriched planning process • Made business relevant information transparent for better decision making and improved forecast activity • One single source of truth, eliminated an opaque, multi-source and diverse system landscape • Implementation of a lean business and process workflow architecture, lead to an increased level of responsibility, speed and efficiency
  9. 9. Planning and Forecasting in Oil & Gas | A BearingPoint Accelerator Contact Stefani Rahmel Partner BearingPoint Germany stefani.rahmel@bearingpoint.com Dr. Wolfgang Völl Senior Manager BearingPoint Germany wolfgang.voell@bearingpoint.com About BearingPoint BearingPoint is an independent management and technology consultancy with European roots and a global reach. The company operates in three units: Consulting, Solutions and Ventures. Consulting covers the advisory business; Solutions provides the tools for successful digital transformation, regulatory technology and advanced analytics; Ventures drives the financing and development of start-ups. BearingPoint’s clients include many of the world’s leading companies and organizations. The firm has a global consulting network with more than 10,000 people and supports clients in over 75 countries, engaging with them to achieve measurable and sustainable success. For more information, please visit: Homepage: www.bearingpoint.com LinkedIn: www.linkedin.com/company/bearingpoint Twitter: @BearingPoint © 2019 BearingPoint. All rights reserved

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