Small and medium O&G enterprises do not have the appetite for long duration SAP implementations, that typically span over 12-18 months. They also do not find it prudent to make huge capital expenditures on such implementations, thereby requiring System Integrators (SIs) to offer pre-built solutions and services on cloud technology as a subscription service. This paper throws light on the challenges that small and medium O&G enterprises face in investing in best-in-class supply chain solutions using ERP systems and shows how they can opt for Rapid Deployment Solutions (RDS). The paper proposes a subscription-based service option to mitigate these challenges. It also explores various deployment options for pre-configured solutions such as Downstream Oil Supply Chain Solution-in-a-Box (DOiB).
Subscription is Name of the Game
The small and medium enterprises (SMEs) in the O&G space are largely managing their IT needs using home-grown or bespoke applications, most commonly Excel spread sheets. They are not averse to adopting best-of-breed ERP solutions if the two major challenges of time and cost are addressed.
Pre-configured, prescriptive SCM solutions offered on a subscription basis that conform to industry best practices, using ERP applications such as SAP, can help enterprises reduce implementation time and also reduce overall costs with the solution-in-a-box model. This solution suits SMEs looking for simple-to-use and lower time-to-implement options.
The concept of using the Supply Chain solution as a subscription service over cloud covers infrastructure hosting, product licenses and SI services, including Warranty, and can be deployed in less than 6 months. Packaging the entire Downstream Oil Supply Chain “Solution-in-a-box” can help the SMEs lower their TCO and minimize overheads.
CIOs of these small and medium enterprises can roll out significantly more powerful supply chain functions at an affordable operating cost, with no capital expenditure, by subscribing to the SCM-Solutions-as-a-Service (SoaaS).
Service providers or SIs, with their deep understanding of the O&G industry, build an SAP prescriptive solution for rapid deployment. Downstream Oil in a Box – DOiB – is an SAP-based Supply Chain solution pre-configured to 75%, with a prescriptive solution based on industry best practices, designed to meet a majority of the Supply Chain business processes typically applicable to refineries, terminals, depots and downstream O&G companies.
The pre-configured solution covers all key SCM processes such as Contracts Management, Inventory Management and Visualization, Primary Supply Distribution, Custody Transfer, Terminal Sales and Distribution, Invoicing and Financial Consolidation, as well as key Reporting needs.
SAP’s industry-specific solution for the Oil & Gas Industry – SAP- IS-Oil – is one of the largely used solutions for most of the Supply Chain business processes and helps in execution of all above cited Supply Chain processes (see Figure 1).