by Alan Joch
Even veterans of the oil and gas industry acknowledge they’re experiencing a particularly wild ride today. Widespread retrenching has come in the wake of a supply glut and volatile prices. One measure of today’s volatility: rig counts in North America have fallen approximately 53 percent in the last year, according to industry research. At the same time, Bloomberg Business reported recently that worldwide oil supplies have exceeded demand globally for the past five quarters, creating the most enduring glut since 1997.
Headquarters: Houston, Texas
Industry: Oil and gas
Employees: More than 2,000 worldwide
Oracle solutions: JD Edwards EnterpriseOne solutions, Oracle Hyperion solutions, Oracle Business Intelligence
Length of tenure: Two years
Education: BA in business administration, University of Iowa; MS in information systems, DePaul University
Personal quote/mantra: “Business strategist and Harvard Professor Michael Porter once said—and I am paraphrasing here—‘If a company had unlimited funds and resources, there would be no need for a strategy.’ Leading the development of a realistic roadmap for IT that is flexible and supports the business is the value of a CIO. Properly prioritizing funding while leading and enabling the right resources to deliver the roadmap is how the CIO succeeds.”
But leaders at industry stalwart Stewart & Stevenson (S&S) know that boom and bust cycles aren’t all gloom and doom. With the right resources in place, quick-thinking companies can seize new opportunities for improving profit margins, increasing productivity, and enhancing customer service. For S&S, that will mean increasing its reliance on innovative mobile apps and hardware to help field service teams and business managers up their game.
More than a century old, the Houston, Texas–based company has operated as a manufacturer and distributor of products and services for the oil and gas industry, as well as the marine, construction, power generation, transportation, material handling, mining, and agricultural sectors. It also fields teams of technicians to maintain and repair rig systems and related equipment throughout North America and around the globe. To manage these multifaceted operations, S&S relies on Oracle’s JD Edwards EnterpriseOne enterprise resource planning (ERP) solutions, using nearly two dozen modules spanning sales, supply chain, service, and credit functions, says S&S CIO Paul Krueger. “It is our core business system, and it is tightly integrated with all of our business processes,” Krueger adds.
Eyeing ways to take even greater advantage of the ERP platform and strengthen the company’s overall business, Krueger and a cross section of S&S business leaders are committed to giving key employees mobile access to these core JD Edwards EnterpriseOne solutions.
“We rank all of our enterprise applications and platforms into three categories: strategic, commodity, and legacy,” Krueger says. “As we continue to grow as a company, we’ll invest in the strategic platforms, and it’s in those areas where we’ll focus our mobile efforts. JD Edwards definitely falls in that category.”
Customers will see benefits as our technicians complete and finalize each job quicker, and customers receive invoices on a timely basis. Everybody will be working faster and more efficiently.”–Larry Clements, Director of Business Systems, Stewart & Stevenson
He adds that moving to mobile apps is easier for companies such as S&S: as long as the core JD Edwards platform is running the latest updates, end users can download authorized JD Edwards mobile apps from the Apple App Store and Google Play. But simplicity is far from the only driving force here. In-depth analysis by line-of-business, finance, and IT leaders points to clear bottom-line payoffs for the company.An Industry Transformed
S&S isn’t alone in investigating how mobility can benefit the oil and gas industry. Long-time observers say the sector is undergoing a historic transformation, where new drilling technologies are opening up more business opportunities than ever before. “Industry suppliers such as Stewart & Stevenson need to look at innovations such as mobile platforms to take advantage of these opportunities,” says Charles Karren, senior director and oil and gas industry strategist at Oracle. “The right mobility platform will help them be more responsive to the large service companies that are their customers. These companies are demanding that suppliers provide their services flawlessly and on a cost-competitive basis. And if they don’t, the service companies will go to the next supplier in their Rolodex.”
The ability to adapt to evolving business requirements is another important consideration. “Suppliers don’t know what’s around the corner in terms of their business needs or those of their customers. This puts a premium on innovative technologies, such as a mobile platform that’s continually being expanded with new apps for improving customer service and making business operations more efficient.”
Against this backdrop, S&S’s leaders have chosen to focus on a handful of key business areas as they scrutinize the benefits of mobility. First, the S&S staff wants to reduce days to close, their measurement of how long it takes to invoice a customer after work is completed by a service representative. Fast responses by these technicians are essential for customers who must minimize downtime to stay profitable in today’s competitive market. Timely invoicing also helps S&S maintain cash flow, so executives hope mobile-equipped field technicians can submit invoicing data while still at job sites to jump-start the receivables process.
A test bed for mobile’s impact on days to close is S&S’s Houston branch, where more than 135 people are devoted to sales, manufacturing, service, parts, and warehousing operations. Field representatives from the Houston branch record relevant information, including labor hours and repair parts used, on paper forms that they hold until they return to the office and hand them off to an agent, who logs everything in to the JD Edwards applications.
“These guys travel from job to job, so we may not see them for two, three, or four days,” says Ken Raycroft, the branch’s general manager. “So if a guy does a job on Monday, doesn’t come back to the office until Friday, and the invoice coordinator needs to wait until Monday before they can input everything, so we’re at seven days to close. Mobility would allow that technician to have his hours and parts charged to that job while he is still in the field.”
A committee representing a cross section of departments began meeting two years ago to find ways of speeding the invoicing process. “We immediately made a big impact picking off some low-hanging fruit in our procedures,” says Joe Cooney, general service manager at S&S’s Houston branch. “But then we recognized that if we really wanted to shorten our days to close we’d have to implement some new technology.”
This spawned a plan for tablet-toting service representatives to bypass paper, enter data into a mobile app, and upload the data from the worksites. That in turn led the team to investigate various mobile platforms on the market, and they quickly realized that the existing JD Edwards system and the breadth of available mobile apps was the best option.
“Having the data entered directly into the business system is the only way that we as a management team saw to make significant improvement in that days-to-close measurement,” Raycroft explains.
Such efficiencies can have a positive effect on customer service. “Customers will see benefits as our technicians complete and finalize each job quicker, and customers receive invoices on a timely basis,” says Larry Clements, S&S’s director of business systems. “Everybody will be working faster and more efficiently.”Inventory Insights
“There are other direct benefits to customer service, Krueger says.” For example, the mobile apps give representatives direct access to the core JD Edwards system to view current inventory levels of repair parts and speed orders for needed components. “Today, checking on parts availability requires a call to the warehouse, which triggers somebody to check the inventory,” says Cooney. “That can lead to lost time.”
Suppliers don’t know what’s around the corner in terms of their business needs or those of their customers.This puts a premium on innovative technologies, such as a mobile platform.”–Charles Karren, Senior Director and Oil and Gas Industry Strategist, Oracle
Reliable access to inventory information could also enhance the role of S&S’s roving parts trucks. “We’d like our technicians to accurately see what’s available in a truck that may be 10 miles away from the worksite versus back in the main warehouse 40 miles away,” Cooney says.
Anytime, anywhere access to information could also benefit senior executives. “They want to be able to look up the activities of a branch they’re about to visit to get the latest details about bookings and who the top customers are,” Krueger explains. “If executives are about to visit a customer, they want to see the sales history and what contracts are being quoted now.”
The S&S business and IT staff will use mobile apps to give traveling workers access to technical information, such as videos that show how to repair complex oil-country equipment in the field. Service representatives can also use tablets to send pictures of machinery during chat consultations with peers back at the branch.
S&S executives are also anticipating speedier approvals of purchase orders and other spending requests thanks to mobile apps. “Some of the engines we work on cost hundreds of thousands of dollars, so an individual part may be US$30,000,” Cooney says. “Ordering a replacement may require executive-level approval of the purchase order. If the approver doesn’t have mobile capabilities, that can hold us up in the field.”
As a manager who approves materials purchases and other requisitions within the core JD Edwards system, Raycroft has experienced the wheel-greasing advantages of mobility. He now routinely carries a tablet, and he’s one of a handful of S&S executives doing initial tests of JD Edwards mobile apps. He says JD Edwards mobile apps present a user interface that looks just like the interface of the main system. “I carry the tablet with me wherever I go, so at this point I’m using it as an extension of my desktop,” he says. “I was on vacation last week in Florida, and I approved requisitions the whole time I was away.”
Extending JD Edwards solutions beyond stationary desktops may ultimately make for happier employees, Krueger says. “When someone is at the ball game with their kids and they need to sign off on something, they don’t want to run home, flip on their laptop, and connect via a VPN [virtual private network] to do it,” he says. “If we give them the ability to securely connect with enterprise applications from anywhere, they’ll see a better work/life balance.”Confronting Risks
As S&S executives quantify each of these potential benefits during the current evaluation phase, which will last through the end of 2015, they’re also looking out for potential stumbling blocks. They understand that training in the use of mobile hardware and inputting service data into electronic forms will be crucial for service representatives, particularly for those not well-versed in using tablets and smartphones. “Technicians are focused on getting a customer’s equipment back in service as quickly as possible, and techs may hesitate in spending time entering information rather than turning wrenches,” Clements concedes. “But I think once they see how mobile capabilities will really streamline the overall time they spend on jobs, they will embrace the technology.”
Another challenge will be maintaining reliable data transfers between worksites and company resources such as JD Edwards solutions. “Network connectivity in oil fields can be very limited,” Krueger acknowledges. Store and forward capabilities will be one way to overcome communications gaps. If they can’t connect to a network, field representatives will likely update information to a small database on their mobile devices, knowing that the mobile app will automatically load the new information into the central JD Edwards system of record when communications are re-established.
The IT staff is also focusing on security with VPNs and other controls that give remote workers a secure tunnel through the corporate firewall. “Security was a prerequisite for us before we started evaluating mobile apps,” Krueger says. “We feel comfortable with the new security measures we’ve put in place.”
Krueger also knows that today’s preparations for mobility are part of a process that is more about ongoing innovations than reaching a specific destination. “Over time, we see opportunities for bringing our business intelligence capabilities and the Internet of Things to our mobility infrastructure,” Krueger says. “So when it comes to extending our corporate resources beyond desktops, we feel like we’re only at the beginning of reaping what’s possible.”
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