Unlock the Value of Accounting Data with Oil & Gas Business Intelligence11/13/2018
Are you working in an upstream oil and gas accounting department that relies heavily on spreadsheets for your reporting needs? Do you find the manual processes that bring together data from different sources time consuming and error prone?
Maybe you’re relying on other people to build reports which means more time going back and forth to ensure the correct data is included in each report. Or, maybe you’re using a generic business intelligence (BI) tool with loads of features, but not the content or context you need.
In this article we go over a few of the common data challenges accounting departments face with spreadsheets or non-oil and gas reporting tools, and the benefits that come from utilizing a specialized reporting tool.
Your Checklist: What to Look for in a Reporting Solution
✓ Automatically collects and aggregates transaction data for faster reporting
✓ A connection to the source database so you know data is always up to date
✓ Easy to administer user-level permission to secure data
✓ Flexible reporting library with ad hoc exploration
✓ Well-designed reports with powerful visualizations
✓ Ability to combine data from multiple systems
✓ Reporting library specific to upstream oil and gas accounting
✓ Easy-to-use, pre-built content to help get from data to insight as fast as possible
Volume of Data
Think about the amount of transactional data that goes through an upstream oil and gas accounting department each month. It doesn’t matter the size of the company, most wells generate hundreds of transactions each month, which add up to a lot of data to manage from a spreadsheet.
One process many accounting departments use is dropping transactional data into a spreadsheet, with or without a template, and using lookup and indexing formulas to categorize transactions and eventually producing a summary report. The maintenance of this process requires an exorbitant amount of time and often becomes more difficult with each month.
Managing data can be much more efficient using a reporting tool that allows you to collect, automatically aggregate, and analyze transaction data without the use of disconnected spreadsheets. Most of the data manipulation performed in spreadsheets is preparing the data for analysis, not the actual analysis itself. A reporting tool with embedded data extraction and aggregation, a consistently defined data model, and relevant, available content cuts out most of the manual steps used in spreadsheet management – freeing up time for you to focus on the real work, analyzing the results.
Using spreadsheets to create month-end or on-the-fly analysis locks you into a checklist of steps and counterpart validations or challenges that must be overcome before you can begin the real work of data analysis.
The first step is the inevitable import of the needed data, often from various sources. Did all the data come into the spreadsheet in a usable format, unit of measure and representing the same duration? What cleanup is required to get it to a usable state? Has somebody built a template to ensure the data is properly reflected in the spreadsheet? Has anything changed in the source systems that could cause the template to misbehave? Did someone change a link or modify a calculation? Is something mislabeled or referencing archived, temporary, or otherwise inaccurate data? This is especially true when data across systems must be joined, as is often the case when we need to include production data into monthly analysis. This inevitably means that you need even more data, and the spreadsheet grows even larger and more unwieldy. As the spreadsheet grows, it becomes harder to share, as you often can’t email it to one-another for quick review and discussion. You’ll often need to resort to a file-sharing system to allow others to access it, but it also means that you must make sure that unexpected changes aren’t made to the shared copy.
With the right BI tool, report library, and associated features, users can log in at their workstation or via a mobile app to connect to the most up-to-date set of data. There’s no need to ‘ship the data’ to each person by sharing a link or run the risk of people working on different versions of the data.
Rather than using spreadsheets to control who has access to what data, an effective BI tool will provide the necessary user-level permission setting and controls without creating a burden on administrative teams or requiring broad access to the applications where the data is created and controlled.
Making Data Meaningful & Actionable
Think of a single data point as a single piece of a puzzle. By itself, it’s almost impossible to figure out where it fits and what it means. Joined together with other pieces in context, the whole picture comes into view. Capturing the necessary context of the subject matter experts in each domain of data becomes increasingly difficult as data travels further from its source. However, well designed reports and visualizations can ensure that users can understand its meaning without having to go back to the original source. The power of visualizations should not be overlooked – strong visualizations allow users to notice trends or anomalies visually, allowing them to spend less time scrutinizing line items and more time acting on the issues that have been uncovered.
Forecasting cash flow is important for any company. It can be a challenge to predict how much money your organization will make from production prior to marketing and sales. You can try to use prior months’ revenue, but the volatility of the market makes this risky.
A better measure would be tying together planned production with available pricing information. However, accountants often only have access to historical production data or static, printed reports with limited data. An effective BI tool enables the combination of data from multiple systems to understand where the organization as a whole stands.
There’s an argument that one can do independent analysis in spreadsheets, but the data is only as up to date as the last download. Data can be changed, and errors will propagate to other users. The right reporting tool uses secured data to ensure its accurate and up to date, while providing users the ability to explore the data however they prefer. People are not limited by the view established in a canned report.
A big challenge comes from understanding what data to work with – again, establishing and maintaining context. Trying to use an out of the box product that isn’t specific to oil and gas usually ends up sending data analysis into the hands of the tool experts, rather than the business experts. Instead of having access to the data to get the best insights, you’re buffered by the team that downloads and manipulates the data behind the scenes. That leaves you at a point hardly better than where you started.
Many reporting products have a steep learning curve. We’ve heard from accountants that some of the well-known BI tools are overwhelming because there’s too much one can do with it. This technical barrier to entry must be overcome for a company to begin to move up the analytic value chain.
Therefore, we’ve packaged a highly functional, easy to use reporting tool with pre-built content to help customers get from data to insight as fast as possible. We designed it to be easy for the oil and gas production, accounting, and land community to start up and understand.
You cannot maintain a successful business, both today and into the future, without the insights necessary to continually improve your operations. If you have a business intelligence tool that extracts, aggregates, summarizes, and visualizes your data for you, then you can drive your business farther, faster.
About The Author
Ben Pauls is Product Development Manager and Product Manager of P2 Reporting and has been with P2 Energy Solutions for five years.