1. The Four Biggest Back-Office Challenge Areas in the Oil and Gas Industry
(And How the Cloud Can Help)
Introduction
For all its importance to modern society, energy is a challenging business to be in at the best of
times. Companies face a wide array of challenges, and fierce competition for opportunities. On
the administrative and support end, energy companies have a unique set of concerns.
In late 2011, we at P2 Energy Solutions sent out a survey to domestic oil and gas companies with
revenues under $700 million, asking their accountants and senior management about industry
trends and their attitudes. 115 companies responded.
From the responses, we identified four main back-office areas where companies are concerned.
These are:
• Number of spreadsheets
• Real-time reporting
• Workflow
• Training
This white paper will discuss these issues, and talk about how modern cloud computing can
substantially help in dealing with them.
Spreadsheets
Many oil/gas companies depend on spreadsheets, our survey found. But as they grow – adding
properties and acquisitions, and more activity – it becomes difficult to handle everything
manually in Excel.
Issues include:
• Control. Spreadsheets can be changed on the fly, making it difficult to enforce auditable
controls.
• Speed. Companies that handle their JIB (Joint Interest Billing) and AFE (Authorization
for Expenditure) processes through spreadsheets, find it a difficult and burdensome affair.
It takes longer to get a clear picture of where you are at a given time.
• Workload. Integrating spreadsheets, closing your books at the end of every month,
necessarily takes a lot of time.
The essential problem with spreadsheets is that they’re not integrated, and therefore rely on a lot
of manual labor. They’re a cumbersome way of doing things that requires a lot of (avoidable)
time and effort.
Real-time Reporting
Related to the issue of spreadsheets being cumbersome is the matter of real-time reporting and
business intelligence – the data that allows management to make effective, timely decisions.

2. 77% of companies in our survey indicated that they don’t presently use a business intelligence
solution. This despite the substantial benefits, which boil down to companies being able to move
faster and take advantage of opportunities.
Why don’t they? Without integrated information systems – if you’re dependent on spreadsheets
that have to be pulled together on a monthly basis – it’s simply not possible to get that kind of
dashboard-level intelligence quickly.
Workflow
In a manual world, workflow management looks a lot like invoices moving around an office –
people write/approve statements, move them on. Losing track of material is easy and common.
This is especially the case in the energy industry, where a given company will have a lot of
different locations and heavy remote usage of systems.
It’s another case where an integrated, automated paperless solution has very real benefits. It
allows a company to streamline its processes, with electronic confirmations keeping anything
from being lost along the way.
You can:
• Better manage cash flow
• Take advantage of discounts offered for rapid payment
• Get clearer information faster
• Save on expensive paper record-keeping.
Training
The fourth big area companies in our survey listed as a concern, was training. Clearly, a system
isn’t much good if your people don’t know how to operate it effectively, and this is seen as a
barrier to transitioning to integrated systems.
The oil and gas industry is an active and fast-moving one, with a lot of acquisitions and constant
staffing turnover. Any solution deployed by a company in the space needs to be usable, which
means that sufficient training materials need to exist and be rapidly deployable.
About Hosted Solutions
One option that contributes heavily toward solving a lot of these issues is an integrated,
externally-hosted solution. Rather than sitting on the company’s own network, a hosting solution
resides ‘in the cloud’, on a dedicated server (or servers) reached by internet connection.
Hosted solutions have a number of advantages over in-house ones:
• Higher uptime, because they’re run in dedicated data centers by specialists on-site 24/7.
• Rapid deployability. Most hosted solutions require nothing on the client’s end except an
internet connection and a web browser. This makes rollout easy.

3. • Focus. A company using a hosted solution doesn’t have to worry about server or IT
management; they can focus on their core business.
• Fixed costs. Typical cloud solutions charge a set and predictable monthly fee.
• Scalability. It’s easy to add capacity in a hosted solution; just ask the provider.
• Capital expenditure. You’re paying by the month, without having to shell out for
infrastructure costs.
• Security. Cloud servers operate in specialized data centers, with considerably better
controls and policies – and staff – than most small-to-medium companies can bring to
bear.
• Backup. Cloud servers also tend to have firm, redundant backups, functionally negating
your risk of a catastrophic data loss.
Of course, a potential disadvantage to a cloud solution is that it is off-site, and you’re therefore
totally dependent on your internet connection. Without internet, you lose access to mission-
critical applications. It’s a highly recommended best practice to have multiple ways to reach the
internet – a wireless option in case a local cable gets severed, for instance.
Benefits of a Hosted Solution in the Energy Space
Given the turbulent environment and unique considerations facing the oil and gas industry, and
the four main areas that respondents to our survey indicated were major concerns, an integrated
hosted solution can deliver very real benefits.
Many hosted solutions allow direct integration with Excel and other spreadsheet packages; the
data can be brought together, extracted, processed and presented seamlessly.
This frees you from dependence on spreadsheets, and – from a business intelligence and reporting
standpoint – allows you to access data in real-time, without having to go into your accounting
system to create custom presentations. Reporting gets to management faster.
Another industry-specific benefit to this type of a solution is remote access. The cloud can, by
definition, be accessed from anywhere a user has an internet connection; people in remote sites
can log in easily to enter or pull data.
And because hosted solutions are designed to scale, many of them will have comprehensive
training materials available for your staff, with human instructors and tech support readily
available, often 24/7, to fill in any gaps or solve immediate problems.
Conclusion
The turbulent energy and gas space faces serious problems; other findings of our survey were that
64% of the responding companies thought there was room to improve their accounting systems,
and that 62% are prepared to invest in technology when there’s a competitive return on
investment to be made.
Replacing spreadsheet-based accounting processes with an integrated cloud solution has clear
benefits. Some of the key ones are:
• Many processes can be fully automated

4. • Data can be compiled, collated and accessed much more rapidly
• Scalability and integration, as a company makes acquisitions, is simplified
• Auditable controls are considerably easier to implement and ensure
• Fixed monthly costs remove capital expenditures and a potentially expensive variable
from your balance sheet
• Outsourcing IT allows a company to better focus on its core business
Companies looking to improve their back-office processes have good reason, then, to seriously
consider a shift from internal, spreadsheet-based systems to an integrated cloud solution. The
cloud directly addresses – and in some cases resolves entirely – some of the biggest challenges
that energy-industry accountants and executives have identified themselves as presently facing.
About P2 Energy Solutions
Headquartered in Denver, CO, P2 Energy Solutions is the largest independent technology
company providing solutions to the energy industry. They provide a comprehensive range of
software to the oil, gas, and alternative energy sectors. These include the Excalibur Online suite, a
SaaS package specifically designed to address the problems discussed in this white paper. For
more information, go to http://www.p2energysolutions.com/excalibur .
Graphics:
14:45 (on the workload imposed by heavy spreadsheets)