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OPN Logo Here Oil & Gas Industry Enterprise Project Portfolio Management -Name- -Title- Client Logo Here
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle. Prepared For: Client Logo Here Copyright © 2009, Oracle. All rights reserved.
Agenda • Leadership: Oracle in Oil & Gas • Value: Enterprise PPM (EPPM) • Challenges: EPPM in Oil & Gas • Solutions: Oracle Primavera for Oil & Gas • Next Steps • Contacts Prepared For: Client Logo Here Copyright © 2009, Oracle. All rights reserved.
Leadership in Oil & Gas: All Major Oil Sectors More than 200 upstream companies run Oracle Applications Top 5 of 5 for Oil Field Service, Drilling and Equipment Providers run Oracle More than 200 Downstream companies run Oracle Applications 49 of top 50 Energy companies run Oracle Copyright © 2009, Oracle. All rights reserved. 5
Leadership in Oil & Gas: Member of the NPC What IDC is Saying: ”Oracle continues to build their presence in the oil and gas industry. This past year, Charles Phillips, President of Oracle, was invited to join The National Petroleum Council by the secretary of Energy. It’s quite a distinction for Oracle, as they are the only enterprise software company to be a part of the council. The National Petroleum Council is an oil and gas advisory committee to the Secretary of Energy. The council serves to represent the views of the oil and natural gas industries in advising, informing, and making recommendations to the Secretary of Energy with respect to any matter relating to oil and natural gas. This membership reflects their commitment to the oil and gas industry, and strengthens their understanding of the challenges facing the industry. ” Charles Phillips President of Oracle Corporation Catherine Madden IDC, October, 2008 Copyright © 2009, Oracle. All rights reserved. 6
Leadership in Oil & Gas: Solutions Manage the Lifecycle Oracle Primavera Focus Copyright © 2009, Oracle. All rights reserved. 7
We Live in a Project-based World: What Gets Measured, Gets Managed 1 every business manages projects 2 and most have poorly defined processes. DIV 2 Plant 1 LOB 3 Planning & Execution Plant 2 LOB 2 $€ £ ¥ Div 3 Plant 3 Monitoring Performance JV 2 Programs and Projects Talent Search Risk Mitigation Strategy Financial Reporting Flawed project selection Cost overruns § Increased asset downtime § Cost Controls Div 1 § § § Strategic Goals Div 4 3 No enterprise visibility Profitability LOB 1 JV 1 The result: project failure. Distributed Information Copyright © 2009, Oracle. All rights reserved. Overallocated resources Standalone products are the problem, not the solution. 9
Insight, Transparency and Value: Aligning Strategy and Execution Drives Performance ENTERPRISE PROJECT PORTFOLIO MANAGEMENT (EPPM) Business Value PROJECT PORTFOLIO MANAGEMENT (PPM) PROJECT MANAGEMENT (PM) RESULTS Plan and Schedule Complex Projects PROJECT CONTROLS Planners Project Managers Project Controls RESULTS Programs Resource Management Risk Management Change Management Plan and Schedule Key and Complex Projects DIVISION/LOB Planners Project Managers Project Controls Resource Managers Program Managers RESULTS Strategic Alignment Talent Management Cashflow Projections Performance and Control Programs Resource Management Risk Management Change Management Plan and Schedule All Projects ENTERPRISEWIDE Planners Project Managers Project Controls Resource Managers Program Managers Team Members Executives Strategy Copyright © 2009, Oracle. All rights reserved. 10
Oracle EPPM: Providing Complete, Global Visibility and Accountability Global, Real-time Coordination Strategic Planning Enterprise Asset Management Program Mgmt Resources Scope Report Plan What-if Execute Analyze Monitor Risk Mitigation Supply Chain Profitability Forecasting PPM Human Capital Finance Time Align Resources Change Control Visibility and Accountability Deliver Projects On Time, Within Budget, As Intended Copyright © 2009, Oracle. All rights reserved. 11
A Single Source of Truth: Linking Corporate Goals with Operational Plans • Integrate business process and data with key enterprise systems • Manage the program lifecycle from idea to execution • Control project costs and Align financials • Forecast cash flow • Assess risks and develop Plan Report contingency plans Analyze Execute Monitor • Align workforce enterprise goals and supporting project initiatives • Collaborate with entire project team including back office operations, internal resources, contractors, and executive management Copyright © 2009, Oracle. All rights reserved. 12
Oracle’s Enterprise Project Portfolio Management: Because All Stakeholders Deserve a Single Version of the Truth Value Provide governance across the enterprise to deliver the right projects and programs. Visibility Advance warning and analysis to reduce risk and eliminate project failure. Velocity Accelerate projects and programs to satisfy customer and clients. Accountability Deliver on commitments: what gets measured, gets done. Copyright © 2009, Oracle. All rights reserved. 13
Enterprise & Plant Challenges: Integration to Drive the Optimization of Capital, Assets and People Capital Investment • • Strategically managing portfolios Assessing, modeling and mitigating risk Enhancing visibility of EPC partners Managing complex programs & projects Asset Efficiency • • Managing scope changes quickly Access to real-time data Collaboration throughout the company Metrics/measurement to drive KPIs Talent Shortage • Assigning the right people to the right projects • Leveling resources and resource optimization • Poor resource utilization Copyright © 2009, Oracle. All rights reserved.
Capital Investments: Lead the Way Out of the Recession with a Focus on the Right Capital Projects • The Oil & Gas Industry is the last major industry to emerge from a recession 1 • The number, size, scope, and complexity of portfolios and projects has increased – Picking the right projects is critical since rigs still “can fetch more than $600, 000 a day to rent” 2 – Project investments are huge with US$12, 000, 0003 devoted to projectbased work • Cost errors and shorter schedules have major impacts – 25% reduction in construction schedules – Mistakes generate cost overruns in the US$100 s of millions 3 • The challenge – project portfolio optimization – Ensuring Cap. Ex drives ROI and shareholder value – Forecasting funding and cash flow – Assessing risk during portfolio prioritization – Understanding the impact of contingencies on costs and timing Copyright © 2009, Oracle. All rights reserved.
Project Portfolio Optimization: Unique Challenges in a Tough Economy Plan • Is the decision in-line with strategic objectives and market dynamics? • Do we have the right – or enough – resources and capacity for success? • Can we effectively score/rank projects across the company? • Have we considered all major risk factors? • Can we measure progress globally? Execute • Can we coordinate multiple projects even among multiple partners/service providers? • Will I be able to react to changes and updates in real-time? • Can we capture expertise and standardize best practices? • Can I optimize resources to avoid over/under allocation? • How can I assess schedule & cost risk effectively? Measure • Can we easily assess project financials – forecast vs. planned? • How can executives get early warning indicators of potential project issues? • Can I deliver investments on-time? • Will I be able to measure service providers/contractors performance? • Can I measure project cashflow, ROI and payback effectively across the enterprise? Copyright © 2009, Oracle. All rights reserved.
Project Portfolio Optimization: Assessing, Prioritizing & Selecting the Right Capital Projects • Plan -- Create a long range plan and rank projects • Execute – Update, track and react to project changes & risks • Measure – Easily assess project financials and KPIs Create a competitive advantage by prioritizing enterprise investments based upon financial considerations, risk tolerance and resource constraints Copyright © 2009, Oracle. All rights reserved.
Project Portfolio Optimization: Managing Annual Capital Spend of $25 B COMPANY Our client is one of the largest energy and petrochemicals companies in the world with over 100, 000 employees in more than 100 countries. With five major business segments they are one of the top 5 IOC’s globally. BENEFITS • Total savings of $50 M/year CHALLENGES • Top-down and bottom-up portfolio planning The company needed to better manage – i. e. , develop, assess, prioritize and select – it’s portfolio of capital projects totaling $25 B annually. capabilities enabled more flexible and accurate planning SOLUTION resource over allocation and bottlenecks The client had already been successfully using Primavera in plant operations across 37 of their sites. With a focus now to improve their capital project processes, in order to drive a greater ROI, the company selected Primavera’s P 6 Enterprise Project Portfolio Management solution. • Increased visibility and management were • Forecasting resources globally prevented enabled through a true enterprise solution by providing multi-user, multi-project and multiregion capabilities . Copyright © 2009, Oracle. All rights reserved.
Asset Efficiency: “Rust” Never Sleeps, Neither Should Maintenance Programs • The deteriorating economy requires a greater focus on existing assets – Spare capacity could be tight because the new financial environment could squeeze investment 1 – Responsiveness to changing market conditions is asset driven – Preventative maintenance reduces costly reactive maintenance • Maintenance management drives return on assets (ROA) – Essential to an organization’s financial success and a key Wall Street metric 2 – Proactive maintenance organizations can dramatically increase craft productivity 3 • The challenge – optimizing existing assets – Optimizing both the routine/daily and complex maintenance process – Accessing real-time data & responding to rapid changes – Collaborating throughout the enterprise – Integration to EAM, ALM and ERP systems Copyright © 2009, Oracle. All rights reserved.
Optimizing Existing Assets: Operational Excellence Drives Success in a Down Economy Plan • Can we prioritize the maintenance backlog? • Do we have the right – or enough – resources and capacity for success? • Have we considered major risk factors including suppliers/service providers, weather, etc? • Can we leverage best practices to reduce planning time and mistakes? • Can we effectively communicate status/progress internally and externally? Execute • Can I collaborate/coordinate with service providers through the project lifecycle? • How do I balance resources across daily work, turnarounds and capital projects? • Can I level resources to avoid over-allocation? • Are we preventing scope creep? • How can I continuously assess schedule & cost risk effectively? Measure • Can I improve unplanned downtime through better resource management? • Will I minimize safety issues if I have the right people on the right projects? • Can I increase wrench time and craft productivity with a diminishing pool of resources? • Will I be able to measure service providers/contractors performance? • How can I improve ROA and asset efficiency for stakeholders? Copyright © 2009, Oracle. All rights reserved.
Optimizing Existing Assets: Completing Projects On-time and On-budget • Plan – Quickly develop & communicate projects more effectively • Execute – Manage tasks & activities • Measure – Assess costs and risks easily Reduce operating costs by managing schedules, resources, and costs across all complex – shutdowns, turnarounds – and routine/daily maintenance projects Copyright © 2009, Oracle. All rights reserved.
Optimizing Existing Assets: Execute Best-in. Class Turnarounds COMPANY Marathon Oil Corporation is an integrated international energy company engaged in exploration and production; oil sands mining; integrated gas; and refining, marketing and transportation. They’re the fourth largest United States-based integrated oil company and the nation's fifth largest refiner. “Going with one system makes our maintenance planning and operations more efficient”. “And, our unified planning process helps us to maintain the efficiency we need to stay at that [best in class] level of excellence. ” Sean Levy CHALLENGES Turnaround Specialist Marathon Petroleum Become more efficient in the maintenance and turnaround efforts for its seven refineries including the challenge of managing overlapping turnarounds BENEFITS SOLUTION quick turnarounds, depending on the nature of the facility The former Ashland refineries used Primavera for scheduling and documentation, while the original Marathon refineries were on a mainframe-based system. In order to standardize its turnaround processes the company made the decision to adopt Primavera enterprise wide for all seven refineries. • Able to schedule and carry out both lengthy and • Contractors also use Primavera to update their work • Can easily move planners from one refinery or turnaround project to another and leverage experience • Evened out demand for limited resources, such as pipefitters • Visibility into maintenance planning company-wide Copyright © 2009, Oracle. All rights reserved.
Optimizing Existing Assets: Streamline Shutdowns and Standardize Processes COMPANY The Kuwait National Petroleum Company (KNPC) was established in 1960 and now manages one of the world’s largest oil complexes, comprising three adjacent refineries that produce more than 850, 000 barrels of oil per day. “From the initial quotes to awarding of contracts and beyond, we can track all elements of purchasing and payments, as well as the progress of the work itself. ” Project Management Professional (PMP) Kuwait National Petroleum Company CHALLENGES • Prior to integration, KNPC had 31 different systems in place to manage maintenance and turnaround work and the numerous software tools and excessive system customization requests complicated IT operations • Business practices were not unified and there was limited information sharing, without a centralized information repository • Needed to manage refinery operations to prevent or limit production losses, while ensuring the safety of staff and the environment SOLUTION Standardized on Primavera for project management and scheduling and integrated with both IBM Maximo and Oracle Human Capital Management and Financials. Primavera is leveraged across the enterprise to provide a consistent and accurate planning environment. BENEFITS • 7% reduction in shutdown duration • Savings of US$21 million per year, with US$3 million from manpower reduction • Increased efficiency in procurement cycle; a reduction from 2 months to an average of 9 days • Information flow is both fluid and bi-directional, so start and finish dates can be calculated based on resource availability • Eliminated the inefficiencies of the silo approach; with single centralized database, KNPC can manage global KPIs from any site Copyright © 2009, Oracle. All rights reserved.
Talent Shortage: Enhance the Use of Limited Talent & Capture Best Practices • The largest number of retirements will occur over the next decade 1 – The average of an employee is 46 to 492 – “There has never been a time when our industry so needs outstanding talent. ” 2 -- Rex Tillerson, CEO, Exxon. Mobil • Limited talent is a risk to portfolios & projects – Lack of skilled talent is increasing project costs and complete dates – Mistakes due to poor/deteriorating project management skills are driving up costs • The challenge – doing more with less – Investing in the right projects to maximize resource optimization – Assigning the right staff to the right project – Capturing best practices/methodologies for the future workforce Copyright © 2009, Oracle. All rights reserved.
Doing More with Less: Get the Right People On the Right Projects at the Right Time Plan • How do I forecast my resource requirements 5, 10, 15 years into the future? • How do I ensure I have the right resources for the project? • Are we over/under allocating resources? • Do our partners or service providers have the necessary skill sets? Execute • How can I quickly adjust for illness and other risk factors? • If my other projects are delayed how does this affect my resource plan? • Can I continuously monitor projects for issues and resource bottlenecks? • How do we ensure adequate communication between the resources and project controls? Measure • Has craft productivity increased? • Are we capturing best practices for the next generation? • Did we reduce errors by assigning the right skill to the right task? • Are resource constraints delaying the delivery of the project? Copyright © 2009, Oracle. All rights reserved.
Doing More with Less: Manage Resources and Capture Knowledge • Plan – Get the right resources for the job • Execute – Manage resource bottlenecks and over allocation • Measure – Capture best practices Level resources across all projects – capital, shutdown, routine, etc. – and proactively track resource demand so workforce is not over allocated Copyright © 2009, Oracle. All rights reserved.
Doing More with Less: Managing Limited Resources Effectively COMPANY The company is a world-leading contractor for the oil and gas industry. With headquarters in northern Europe and offices worldwide, the company transports, installs and removes oil and natural gas platforms and subsea pipelines in locations that span North and South America, West Africa and Europe. “We must have the ability to see where resources might be shared during any particular phase of a project, particularly during tight economic times. ” Planning Manager BENEFITS CHALLENGES • Engineering resource managers can look into the The company contracted with an IOC to manage a complete platform project. These comprehensive projects, however, come with much greater risk. They require a more complex planning and delivery schedule, including challenging resource considerations. • Provides insight into both resource requirements and resource pool of colleagues and see where they may be able to pull people from one particular project in order to expedite another capacity at every stage of the project • 10 project managers can coordinate over 2, 000 activities – including people and material SOLUTION The client decided to standardize on Primavera P 6 for its web-based view of the enterprise and ability to handle major resource challenges. Furthermore, Primavera was running on a centralized Oracle database. • Integration with sub-contractor’s plans – and resources – helps streamline the project’s delivery • Standardization is helping to enable a more collaborative environment across the enterprise Copyright © 2009, Oracle. All rights reserved.
Committed to Asset Intensive Industries: Enabling Optimization Through EPPM Build Maintain Proven capital project planning, control and execution within a rigorous risk framework to optimize Cap. Ex spend, mitigate risk and reduce costs Successful planning and management of complex global projects – plant shutdowns and turnarounds – as well as routine maintenance to reduce Op. Ex, enhance craft productivity and increase asset efficiency We are the de facto standard for the global Oil & Gas Industry Copyright © 2009, Oracle. All rights reserved.
Solutions for Oil and Gas: Focused Offerings for Capital Projects & Maintenance Primavera P 6 Enterprise Project Portfolio Management: • • Oracle | Primavera PPM Ø Ø Ø Primavera Risk Analysis: Effectively maintain and increase the efficiency of existing assets Monitor budget allocations against key performance indicators Identify and select the best exploration and production opportunities Invest in and deliver projects with superior returns Coordinate existing resources and quickly train new talent Maximize labor pools globally through an integrated approach • • • Client Logo Here Determination of cost and schedule risk exposure Predictive forecasting Contingency and mitigation modeling and assessment Manage risks to maximize return and minimize uncertainty Set realistic expectations of project cost and schedule Primavera Inspire for SAP: • • • Prepared For: Prioritize project portfolios Balance resource capacity Plan, schedule, and control Allocate best resources and track progress Monitor and visualize project performance vs. plan Foster team collaborative management Integrates with ERP & EAM systems Copyright © 2009, Oracle. All rights reserved. Create master schedules from related work Increase visibility of all work types, ensure efficient resource utilization Reduce system administration requirements and IT/maintenance
Solutions for Oil & Gas: Leading Technology to Meet Challenges of Executives and Project Teams • Interoperability – no more siloed/fragmented data • Leverage a single version of the truth – one source of integrated information • Manage Cap. Ex more effectively – successfully choose, plan and execute projects • Drive down Op. Ex – increase craft productivity through better planning, allocation of resources, and cross-training • Deliver on time and on budget – effectively coordinate & collaborate on multiple projects and programs • Do more with less – maximize productivity of limited resources Prepared For: Client Logo Here Copyright © 2009, Oracle. All rights reserved.
Next Steps Copyright © 2009, Oracle. All rights reserved.
Contacts Copyright © 2009, Oracle. All rights reserved.